Question 1A partner is jointly, but not severally, liable for all partnership obligations.

• True
• False

Question 2A partner may pursue his or her own interest without automatically violating the fiduciary duties that he or she owes to the firm.

• True
• False

Question 3Ace Accountants, LLP, is a limited liability partnership. The law governing Ace includes

a.limited liability company law.

b.partnership law.

c.sole proprietorship law.

d.none of the above.

Question 4A close corporation may restrict the right of a shareholder to transfer stock.

• True
• False

Question 5A public corporation is the same as a private corporation.

• True
• False

Question 6A board of directors generally makes major corporate policy decisions.

• True
• False

Question 7A director is a fiduciary of a corporation.

• True
• False

Question 8A perfected security interest will always have priority over an unperfected security interest.

• True
• False

Question 9Ace Credit Corporation and Best Loans, Inc., lend money to City Tire Company (CTC), and simultaneously perfect their security interests in City's tires. Dina buys a set of the tires from CTC. On CTC's default, the party with priority to the tires that Dina bought is:

a.Ace.

b.Best.

c.CTC.

d.Dina.

Question 10

American Investments, Inc., and First State Bank are secured parties with security interests in property owned by U.S. Manufacturing Corporation. Priority between these security interests is determined by

a.the amount of the claim.

b.the custom in the trade.

c.the time of perfection.

d.the time the security agreement was signed.

Question 11Ann owes Ben $500 on their contract, but refuses to pay. To collect, Ben files a mechanic's lien, under which security for the debt is represented by:

a.Ann's personal property.

b.Ann's real estate.

c.the $500 owed under the contract.

d.the contract.

Question 12A writ of attachment is a court order to seize a debtor's property after the entry of a final judgment in a creditor's lawsuit against the debtor.

• True
• False

Question 13A contract of suretyship must be in writing to be enforceable

• True
• False

Question 14An order for relief in a bankruptcy proceeding amounts to a discharge of the debts of the party petitioning for bankruptcy protection.

• True
• False

Question 15Any debtor who is liable on a claim held by a creditor may file for bankruptcy.

• True
• False

Question 16Attachment ensures that the security interest between a debtor and secured party is effective.

• True
• False

Question 17A security agreement creates or provides for the priority of a security interest between a creditor and a third party.

• True
• False

Question 18A person must be a shareholder of a corporation to serve as a director.

• True
• False

Question 19Ben, who runs a livestock breeding business, owes the Circle C Ranch $40,000. Ben agrees to pay the Cirlce C a percentage of his profits each month until the debt is paid off. Because of this agreement, the Circle C is:

a.Ben's creditor and partner.

b.Ben's creditor only.

c.Ben's partner only

d.neither Ben's creditor nor his partner.

Question 20Cody and Diana form Eagle Corporation. Eagle has a board of directors, a chief executive officer, a chief operating officer, and fifty-two shareholders. Eagle is governed by its

a.board of directors.

b.incorporators.

c.officers.

d.shareholders.