Question 1

The advantage of crowdfunding to a small entrepreneur is

Accepted Answer

A) selling shares online directly to investors. 
B) fundraising without providing financial statements to potential investors. 
C) simply creating a video asking people to send money via the Internet. 
D) gaining access to public funds without filing a registration statement. 
A) selling shares online directly to investors. 
B) fundraising without providing financial statements to potential investors. 
C) simply creating a video asking people to send money via the Internet. 
D) gaining access to public funds without filing a registration statement. D

Question 2

To raise equity capital by crowdfunding, Data Analytica Inc.

Accepted Answer

A) must sell shares only online and directly to investors. 
B) must go through an online fundraising platform registered with the SEC. 
C) can simply create a video asking people to send money via the Internet. 
D) can gain access to public funds only after filing a registration statement. 
A) must sell shares only online and directly to investors. 
B) must go through an online fundraising platform registered with the SEC. 
C) can simply create a video asking people to send money via the Internet. 
D) can gain access to public funds only after filing a registration statement. B

Question 3

Bill starts Castaway to market a new line of uniquely designed fishing gear. Delta Finance Company loans $50,000 to Bill for the project. Delta is most likely to recover the amount of the loan from Bill's personal assets

Accepted Answer

A) if Bill provides a complete, accurate record of business transactions. 
B) if the loan is not subject to an agreement that imposes personal liability. 
C) if Bill's business is a sole proprietorship. 
D) under no circumstances. 
A) if Bill provides a complete, accurate record of business transactions. 
B) if the loan is not subject to an agreement that imposes personal liability. 
C) if Bill's business is a sole proprietorship. 
D) under no circumstances. C

Question 4

Beth starts Checklist to market a new app. Debit Bank loans $30,000 to Beth for the project. Later, the debt is most likely to be discharged in bankruptcy

Accepted Answer

A) if Beth provides a complete, accurate record of business transactions. 
B) if the loan is not subject to an agreement that imposes personal liability. 
C) if Beth's business is a sole proprietorship. 
D) under no circumstances. 
A) if Beth provides a complete, accurate record of business transactions. 
B) if the loan is not subject to an agreement that imposes personal liability. 
C) if Beth's business is a sole proprietorship. 
D) under no circumstances.

Question 5

Pi and Quia are general partners in Risqué Investissements, a limited partnership. Without Pi's knowledge or consent, Quia defrauds potential investors into buying limited partnerships in the firm and steals the amounts of their investments. In a suit by those partners against Pi to recover for their losses, Pi is most likely liable

Accepted Answer

A) if the investors are viewed as innocent third parties. 
B) if the investors are construed as limited partners. 
C) under any circumstances. 
D) under no circumstances. 
A) if the investors are viewed as innocent third parties. 
B) if the investors are construed as limited partners. 
C) under any circumstances. 
D) under no circumstances.

Question 6

Vera starts World Markets Inc., an online business to advertise and sell goods handcrafted in a variety of countries. The purpose of advertising law generally is to create marketplaces in which businesses can operate free of

Accepted Answer

A) deceptive and unfair practices. 
B) international restrictions on speech. 
C) the rules of private websites (such as Facebook). 
D) competition. 
A) deceptive and unfair practices. 
B) international restrictions on speech. 
C) the rules of private websites (such as Facebook). 
D) competition.

Question 7

Nina and Owen are general partners in Property Management L.P., a limited partnership. Without Nina's knowledge or consent, Owen defrauds the firm's clients, resulting in the firm's liability for the losses. The limited partners file a suit against Nina to recover their investments. She is most likely liable

Accepted Answer

A) if the clients are viewed as innocent third parties. 
B) in a state that does not protect innocent partners from fraud suits. 
C) under any circumstances. 
D) under no circumstances. 
A) if the clients are viewed as innocent third parties. 
B) in a state that does not protect innocent partners from fraud suits. 
C) under any circumstances. 
D) under no circumstances.

Question 8

Predictive analytics in the digital realm focuses on

Accepted Answer

A) predicting certain behavior based on certain data. 
B) analyzing certain data to predict digital developments. 
C) analyzing certain predictions to monitor certain results. 
D) predicting certain digital data based on reasoned analysis. 
A) predicting certain behavior based on certain data. 
B) analyzing certain data to predict digital developments. 
C) analyzing certain predictions to monitor certain results. 
D) predicting certain digital data based on reasoned analysis.

Question 9

Personnel Resources Company considers using software to analyze employee behavior with the goal of predicting wrongdoing. In this situation, the ethical focus is on

Accepted Answer

A) the success of the software. 
B) sanctions for something yet to be done. 
C) questions of privacy. 
D) whether data mining should occur only online. 
A) the success of the software. 
B) sanctions for something yet to be done. 
C) questions of privacy. 
D) whether data mining should occur only online.

Question 10

Rick forms Study Groups Inc. to start a social media site online. He selects Takeaway as the domain name. Responsible for coordinating databases related to namespaces online

Accepted Answer

A) are the website hosts of online businesses. 
B) is the U.S. Copyright Office. 
C) is the U.S. Patent and Trademark Office. 
D) is the Internet Corporation for Assigned Names and Numbers. 
A) are the website hosts of online businesses. 
B) is the U.S. Copyright Office. 
C) is the U.S. Patent and Trademark Office. 
D) is the Internet Corporation for Assigned Names and Numbers.

Question 11

Like other online businesses, Amazing.com collects and retains its customers' account numbers and other personal information. Keeping this data private will most likely

Accepted Answer

A) protect against liability for wrongful disclosure or misuse. 
B) comply with federal and state laws that also cover offline businesses. 
C) meet the standards of foreign countries' privacy laws. 
D) all of the choices. 
A) protect against liability for wrongful disclosure or misuse. 
B) comply with federal and state laws that also cover offline businesses. 
C) meet the standards of foreign countries' privacy laws. 
D) all of the choices.

Question 12

Trade Secrets Inc. hosts client accounts in servers located in foreign countries. The U.S. government issues a warrant to obtain e-mails related to a possible criminal case from one of those accounts. Before a court, as part of a refusal to comply with the order, Trade Secrets' best arguments include that the warrant

Accepted Answer

A) threatens the privacy of U.S. citizens. 
B) all of the choices. 
C) exceeds the power of the government to conduct a reasonable search. 
D) will cause the firm to lose business because its clients will no longer trust it to keep their data secret. 
A) threatens the privacy of U.S. citizens. 
B) all of the choices. 
C) exceeds the power of the government to conduct a reasonable search. 
D) will cause the firm to lose business because its clients will no longer trust it to keep their data secret.

Question 13

As with other online businesses, the customers of Biz.com are heavily reliant on the firm's reputation. For an online business, dealing in good faith

Accepted Answer

A) can be more important than in a brick-and-mortar location. 
B) is irrelevant. 
C) involves minimal compliance with the laws of a targeted market. 
D) is not a significant part of an effective customer service program. 
A) can be more important than in a brick-and-mortar location. 
B) is irrelevant. 
C) involves minimal compliance with the laws of a targeted market. 
D) is not a significant part of an effective customer service program.

Question 14

Outlier Inc. hosts client accounts in servers located in foreign countries. The U.S. government issues a warrant to obtain e-mails related to a drug case from one of those accounts. Outlier refuses to comply. On the government's appeal, it is most likely that a court will order

Accepted Answer

A) the owner of the account to "stand and deliver." 
B) Outlier to comply with the warrant. 
C) the government to abide by Outlier's refusal. 
D) the foreign countries to seize Outlier's servers. 
A) the owner of the account to "stand and deliver." 
B) Outlier to comply with the warrant. 
C) the government to abide by Outlier's refusal. 
D) the foreign countries to seize Outlier's servers.

Exam 56: Business Organizations

The advantage of crowdfunding to a small entrepreneur is

To raise equity capital by crowdfunding, Data Analytica Inc.

Bill starts Castaway to market a new line of uniquely designed fishing gear. Delta Finance Company loans $50,000 to Bill for the project. Delta is most likely to recover the amount of the loan from Bill's personal assets

Beth starts Checklist to market a new app. Debit Bank loans $30,000 to Beth for the project. Later, the debt is most likely to be discharged in bankruptcy

Vera starts World Markets Inc., an online business to advertise and sell goods handcrafted in a variety of countries. The purpose of advertising law generally is to create marketplaces in which businesses can operate free of

Predictive analytics in the digital realm focuses on

Personnel Resources Company considers using software to analyze employee behavior with the goal of predicting wrongdoing. In this situation, the ethical focus is on

Rick forms Study Groups Inc. to start a social media site online. He selects Takeaway as the domain name. Responsible for coordinating databases related to namespaces online

Like other online businesses, Amazing.com collects and retains its customers' account numbers and other personal information. Keeping this data private will most likely

As with other online businesses, the customers of Biz.com are heavily reliant on the firm's reputation. For an online business, dealing in good faith

Outlier Inc. hosts client accounts in servers located in foreign countries. The U.S. government issues a warrant to obtain e-mails related to a drug case from one of those accounts. Outlier refuses to comply. On the government's appeal, it is most likely that a court will order

Law and Legal Reasoning

Business and the Constitution

Ethics in Business

Courts and Alternative Dispute Resolution

Court Procedures

Tort Law

Strict Liability and Product Liability

Intellectual Property Rights

Internet Law Social Media and Privacy

Criminal Law and Cyber Crime

Nature and Terminology

Agreement

Consideration

Capacity and Legality

Mistakes Fraud and Voluntary Consent

The Writing Requirement

Third Party Rights

Performance and Dischapterarge

Breachapter of Contract and Remedies

Sales and Lease Contracts

Title Risk and Insurable Interest

Performance and Breachapter of Sales and Lease Contracts

Warranties

International and Space Law

Negotiable Instruments

Transferability and Holder in Due Course

Liability Defenses and Dischapterarge

Banking

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Agency Formation and Duties

Employment Immigration and Labor Law

Small Businesses and Franchapterises

All Forms of Partnerships

Limited Liability Companies and Special Business Forms

Corporate Formation and Financing

Mergers and Takeovers

Investor Protection Insider Trading and Corporate Governance

Administrative Agencies

Consumer Law

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Antitrust Law

Professional Liability and Accountability

Personal Property and Bailments

Real Property and Landlord Tenant Law

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The Legal Environment of Business

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Domestic and International Sales and Lease Contracts

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Creditors Rights and Bankruptcy

Agency and Employment

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