Question 1: A conditional promise to pay is not a negotiable instrument.

True

False

Question 2: An instrument payable "with interest" must specify a particular rate to be negotiable.

True

False

Question 3: On May 1, Dooley signs a check that is payable to the order of Extra Credit Corporation and that is dated July 1. This check is

negotiable.

nonnegotiable, because it is payable to Extra Credit Corporation.

nonnegotiable, because it is postdated.

nonnegotiable, because it is signed by Dooley.

Question 4: Financial institutions that exchange digital images of checks do not have to exchange the original paper checks.

True

False

Question 5: The Federal Reserve System acts as a clearinghouse where banks exchange checks.

True

False

Question 6: Each bank in a collection chain must pass a check on before midnight of the day of its receipt.

True

False

Question 7: Filing a financing statement with the appropriate public office is the only way to perfect a purchase-money security interest in consumer goods.

True

False

Question 8: A security agreement must be filed in person to be valid and enforceable.

True

False

Question 9: The first security interest to be perfected is the last in priority over any other perfected security interests.

True

False

Question 10: Mike owes $12,000 to Nora, $6,000 to Owen, and $6,000 to Pat. The three creditors enter into an agreement with Mike to discharge the debts on payment of a sum of $12,000 to them, to be divided proportionately. This is

a. a composition agreement.

b. a guaranty agreement.

c. a judicial lien.

d. a suretyship agreement.

Question 11: Ronaldo agrees to pay Simplex Cash Store a debt that is otherwise dischargeable in bankruptcy. This is

a reaffirmation.

a liquidation.

a reorganization.

a petition

Question 13: A power of attorney is a written document.

True

False

Question 14: Before a principal can ratify a contract, the agent must withdraw from the deal.

True

False

Question 15: Sonia manages a Tasty Pastry store for United Food Company. To manage the business, Sonia's authority can be implied by

an inference from the position Sonia occupies.

any inference a reasonable customer or supplier would make.

any inference Sonia chooses to make.

no inference

Question 16: All employees are entitled to overtime pay.

True

False

Question 17: Lew, a member of a protected class, applies for a job with Mit-E Construction Company, but fails Mit-E's employment test and is not hired. Lew believes that the test has an unintentionally discriminatory effect. If so, this is

desperate-measure discrimination.

disparate-impact discrimination.

disparate-treatment discrimination.

not discrimination

Question 18: Under the Equal Pay Act of 1963, all of the women on an employer's staff must be paid the same as all of the men.

True

False

Question 19: Coco is considering forms of business organization for her confections business Coco's Cupcakes. Most states require that a limited liability company have

no minimum number of members.

at least one member.

at least two members.

at least three members, including at least one general partner

Question 20: Jim organized, and owns and operates, Jim's Landscaping Service in the simplest form of business organization. This is

a corporation.

a limited liability company

a partnership

a sole proprietorship

Question 21: Greta is a member of Hovercraft LLC. As a member, Greta is

a manager or officer, but not an owner

an investor, but not a manager, officer, or owner

an owner

a participant, but not an investor, manager, officer, or owner

Question 22: Stocks represent the borrowing of funds by firms.

True

False

Question 23: Caffeine Café, Inc., files its articles of incorporation with the appropriate government agency. Least likely to appear in the articles is the name of

each of the corporation's incorporators

each of the corporation's shareholders

the corporation

the corporation's initial registered agent

Question 24: The possession of land without right is a tenancy at will.

True

False

Question 25: Mineral Products Corporation, which owns no land, has a right to mine the copper from Natural Resource Company's land. Mineral's right is

a leasehold estate

a license

an easement

a profit