Question 1

It is not necessary to have an attorney look at a contract prior to signing it.

Accepted Answer

A) True 
 B)False

Question 2

________ insurance compensates employees for loss of income and for medical expenses due to job-related injuries.

Accepted Answer

A)  Worker's compensation 
B)  Injury 
C)  Disability 
D)  Liability 
E)  Life 
A)  Worker's compensation 
B)  Injury 
C)  Disability 
D)  Liability 
E)  Life

Question 3

Obtain a trademark in order to ________.

Accepted Answer

A)  Protect your logo 
B)  Protect all your intellectual property 
C)  Register your business name 
D)  Pay your taxes 
E)  Get new customers 
A)  Protect your logo 
B)  Protect all your intellectual property 
C)  Register your business name 
D)  Pay your taxes 
E)  Get new customers

Question 4

A ________ is an official document that gives you the right to carry out a specific activity, such as an outdoor Festival.

Accepted Answer

A)  Permit 
B)  Certificate 
C)  Warrant 
D)  License 
E)  Pass 
A)  Permit 
B)  Certificate 
C)  Warrant 
D)  License 
E)  Pass

Question 5

Product liability insurance covers the risks in case your product harms someone.

Accepted Answer

A) True 
 B)False

Question 6

The form of protection offered under U.S. law to the authors of "original works of authorship" is a(n) ________.

Accepted Answer

A)  Copyright 
B)  Electronic right 
C)  Patent 
D)  Right 
E)  Charter 
A)  Copyright 
B)  Electronic right 
C)  Patent 
D)  Right 
E)  Charter

Question 7

A low deductible will yield a ________.

Accepted Answer

A)  Higher premium 
B)  Lower premium 
C)  The deductible has no impact on the premium. 
D)  Disaster 
E)  Savings in all cases 
A)  Higher premium 
B)  Lower premium 
C)  The deductible has no impact on the premium. 
D)  Disaster 
E)  Savings in all cases

Question 8

A service mark is inferior to a trademark.

Accepted Answer

A) True 
 B)False

Question 9

In a corporation, all profits go to ________.

Accepted Answer

A)  The owners and the shareholders 
B)  Reduce the surplus 
C)  The stockholders as salaries 
D)  The partners according to the terms of the agreement 
E)  Friends and family 
A)  The owners and the shareholders 
B)  Reduce the surplus 
C)  The stockholders as salaries 
D)  The partners according to the terms of the agreement 
E)  Friends and family

Question 10

Which is not a potential penalty for breaking a contract?

Accepted Answer

A)  You may lose a share of the ownership of your business to the other party who signed the contract. 
B)  You may be sued in a court of law by the other party who signed the contract. 
C)  A court may order you to pay damages to the other party who signed the contract. 
D)  All of the above. 
E)  None of the above. 
A)  You may lose a share of the ownership of your business to the other party who signed the contract. 
B)  You may be sued in a court of law by the other party who signed the contract. 
C)  A court may order you to pay damages to the other party who signed the contract. 
D)  All of the above. 
E)  None of the above.

Question 11

A good contract will spell out ________, or unforeseeable "acts of God" beyond anyone's control, for which neither party is responsible.

Accepted Answer

A)  Contingencies 
B)  Liabilities 
C)  Amendments 
D)  Alterations 
E)  Modifications 
A)  Contingencies 
B)  Liabilities 
C)  Amendments 
D)  Alterations 
E)  Modifications

Question 12

What is used to identify and distinguish the source of a service rather than a product?

Accepted Answer

A)  Service mark 
B)  Trademark 
C)  Sales mark 
D)  All of the above 
E)  None of the above 
A)  Service mark 
B)  Trademark 
C)  Sales mark 
D)  All of the above 
E)  None of the above

Question 13

Some contracts specify that conflicts may be settled through ________ instead of court.

Accepted Answer

A)  Arbitration 
B)  Negotiation 
C)  Coercion 
D)  Litigation 
E)  None of the above 
A)  Arbitration 
B)  Negotiation 
C)  Coercion 
D)  Litigation 
E)  None of the above

Question 14

You do not need a patent unless you ________.

Accepted Answer

A)  Believe that someone else could successfully sell the product by copying your invention 
B)  Have invented a product that you intend to market yourself or sell to a manufacturer 
C)  Both A and B 
D)  Want to get sued 
E)  None of the above 
A)  Believe that someone else could successfully sell the product by copying your invention 
B)  Have invented a product that you intend to market yourself or sell to a manufacturer 
C)  Both A and B 
D)  Want to get sued 
E)  None of the above

Question 15

The main disadvantage of corporations is that corporate income is ________.

Accepted Answer

A)  Taxed twice 
B)  Always high 
C)  Taxed only once 
D)  All of the above 
E)  None of the above 
A)  Taxed twice 
B)  Always high 
C)  Taxed only once 
D)  All of the above 
E)  None of the above

Question 16

Work-made-for-hire means you are giving up the rights to your work.

Accepted Answer

A) True 
 B)False

Question 17

Federal, state and local ________ may apply to a business and may affect what it can do, how it can do it, and when and where it can operate.

Accepted Answer

A)  Regulations 
B)  Grants 
C)  Taxes 
D)  All of the above 
E)  None of the above 
A)  Regulations 
B)  Grants 
C)  Taxes 
D)  All of the above 
E)  None of the above

Question 18

The time period in which legal action may be taken is the ________.

Accepted Answer

A)  Statute of limitations 
B)  Statute of legal obligations 
C)  Limit of liability 
D)  Limit of collection 
E)  None of the above 
A)  Statute of limitations 
B)  Statute of legal obligations 
C)  Limit of liability 
D)  Limit of collection 
E)  None of the above

Question 19

Tax-exempt, nonprofit corporations ________.

Accepted Answer

A)  Are set up with a specific mission to improve society 
B)  Do not have legal liability 
C)  Pay dividends more often than do for-profit corporations 
D)  Do not have boards of directors 
E)  Pay more taxes than do other entities 
A)  Are set up with a specific mission to improve society 
B)  Do not have legal liability 
C)  Pay dividends more often than do for-profit corporations 
D)  Do not have boards of directors 
E)  Pay more taxes than do other entities

Question 20

In limited liability companies ________.

Accepted Answer

A)  Income is taxed only once, as the personal earnings of members 
B)  Income is taxed twice, corporately and personally 
C)  Personal assets of the owners are left legally unprotected 
D)  Income is never taxed 
E)  Income is overtaxed 
A)  Income is taxed only once, as the personal earnings of members 
B)  Income is taxed twice, corporately and personally 
C)  Personal assets of the owners are left legally unprotected 
D)  Income is never taxed 
E)  Income is overtaxed

Exam 16: Addressing Legal Issues and Managing Risk

It is not necessary to have an attorney look at a contract prior to signing it.

________ insurance compensates employees for loss of income and for medical expenses due to job-related injuries.

Obtain a trademark in order to ________.

A ________ is an official document that gives you the right to carry out a specific activity, such as an outdoor Festival.

Product liability insurance covers the risks in case your product harms someone.

The form of protection offered under U.S. law to the authors of "original works of authorship" is a(n) ________.

A low deductible will yield a ________.

A service mark is inferior to a trademark.

In a corporation, all profits go to ________.

Which is not a potential penalty for breaking a contract?

A good contract will spell out ________, or unforeseeable "acts of God" beyond anyone's control, for which neither party is responsible.

What is used to identify and distinguish the source of a service rather than a product?

Some contracts specify that conflicts may be settled through ________ instead of court.

You do not need a patent unless you ________.

The main disadvantage of corporations is that corporate income is ________.

Work-made-for-hire means you are giving up the rights to your work.

Federal, state and local ________ may apply to a business and may affect what it can do, how it can do it, and when and where it can operate.

The time period in which legal action may be taken is the ________.

Tax-exempt, nonprofit corporations ________.

In limited liability companies ________.

Entrepreneurs Recognize Opportunities

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The Business Plan: Road Map to Success

Creating Business From Opportunity

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Marketing Globally

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Understanding and Managing Start-Up, Fixed, and Variable Costs

Using Financial Statements to Guide a Business

Cash Flow and Taxes

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Location, Facilities, and Layout

Human Resources and Management

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Franchising, Licensing, and Harvesting: Cashing in Your Brand

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