D216 Business Law for Accountants - Set 3 - Part 1

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 1: What is the term used to describe a mistake made by both parties in a contract about the same material fact?

Unilateral mistake

Bilateral mistake

Mutual rescission

Novation

Question 2: Which of the following acts as a suspension of most litigation and actions by creditors against the debtor in bankruptcy?

Automatic stay

Bankruptcy trustee

Discharge in bankruptcy

Reaffirmation agreement

Question 3: What type of corporation is organized under the laws of a foreign country but conducts business in the United States?

Domestic corporation

Foreign corporation

Alien corporation

Public corporation

Question 4: What is the primary function of the "commerce clause" in the U.S. Constitution?

Regulates contracts between private parties

Prevents unreasonable searches and seizures

Gives Congress the power to regulate interstate commerce

Allows states to impose taxes on imported goods

Question 5: What is the legal term for the act of transferring the right to possession of goods, such as through a warehouse receipt?

Bailment

Tender of delivery

Shipment contract

Document of title

Question 6: What does the term "IRAC" stand for in legal reasoning?

Issue, Reason, Application, Conclusion

Issue, Rule, Application, Conclusion

Identify, Reason, Apply, Conclusion

Identify, Rule, Argument, Conclusion

Question 7: In partnership law, what term is used to describe a joint surety who shares liability with another surety?

Guarantor

Co-sureties

Limited partner

General partner

Question 8: Which document is filed with a state official to form a limited partnership?

Articles of incorporation

Certificate of limited partnership

Articles of partnership

Operating agreement

Question 9: What doctrine relieves a party from contract performance when it becomes impossible due to unforeseen events?

Impossibility of performance

Force majeure

Commercial impracticability

Mutual rescission

Question 10: In bankruptcy, what is the release of a debtor from all dischargeable debts called?

Discharge in bankruptcy

Reaffirmation

Automatic stay

Bankruptcy discharge agreement

Question 11: Which of the following describes an agreement formed between a debtor and creditors to accept a lesser sum than owed?

Accord and satisfaction

Discharge agreement

Creditors' composition agreement

Settlement agreement

Question 12: What is the legal term for the act of seizing property to satisfy a debt prior to securing a judgment?

Foreclosure

Garnishment

Attachment

Replevin

Question 13: A trustee in bankruptcy proceedings is responsible for:

Filing bankruptcy petitions

Managing the debtor’s funds

Writing bankruptcy laws

Discharging debts

Question 14: What is the term used when one party unlawfully pressures another to perform an act they otherwise wouldn’t?

Fraudulent misrepresentation

Duress

Undue influence

Breach of contract

Question 15: What happens when a partnership undergoes dissociation?

The partnership is automatically dissolved

The partner continues with reduced liability

The partner is bought out, and the partnership may continue

The partnership must immediately file for bankruptcy

Question 16: What term refers to the act of mixing funds or goods so they no longer have separate identities?

Commingling

Consolidation

Aggregation

Merging

Question 17: Which type of business entity offers the limited liability of a corporation and the tax advantages of a partnership?

S corporation

Sole proprietorship

General partnership

Limited liability company (LLC)

Question 18: In the context of bankruptcy, which document initiates bankruptcy proceedings?

Bankruptcy petition

Order for relief

Reaffirmation agreement

Discharge in bankruptcy

Question 19: What is the term for the process by which a partnership’s assets are collected, liquidated, and distributed?

Liquidation

Dissolution

Winding up

Reorganization

Question 20: Which of the following terms describes the ability to protect goods or property through insurance against damage or loss?

Insurable interest

Bailment

Attachment

Lien

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