WGU D216 BUSINESS LAW FOR ACCOUNTANTS EXAM–
QUESTIONS AND ANSWERS | VERIFIED AND WELL DETAILED
ANSWERS PLUS RATIONALES | GUARANTEED PASS | LATEST
EXAM UPDATE | EXAM PREP | STUDY GUIDE | PRACTICE TEST
| DOWNLOAD INSTANT PDF
1. Which of the following sources of law is created by administrative agencies through
rulemaking and adjudication?
A. Statutory law
B. Administrative law
C. Common law
D. Constitutional law
Administrative law consists of rules, orders, and decisions established by administrative
agencies to carry out their regulatory duties, whereas statutory law is enacted by legislative
bodies.
2. A state legislature passes a law lowering the legal blood alcohol concentration limit for
driving. This new enactment is an example of what type of law?
A. Case law
B. Administrative law
C. Statutory law
D. Regulatory law
Statutes are laws enacted by legislative bodies, such as state legislatures or the federal
Congress, which then become part of the body of statutory law.
3. When a state court adopts the reasoning of a prior court decision regarding a contract
dispute because the facts are nearly identical, the court is relying on the doctrine of:
A. Stare decisis
B. Certiorari
C. Res ipsa loquitur
,D. Jurisdiction
Stare decisis is the legal doctrine by which judges are obligated to follow precedents
established by prior court decisions within their jurisdiction.
4. An accountant providing tax services in Texas is sued for malpractice. Which court
system generally has primary jurisdiction over professional negligence claims involving
local service providers unless federal diversity requirements are met?
A. Federal district court
B. State trial court
C. United States Supreme Court
D. Federal bankruptcy court
State trial courts possess general jurisdiction to hear common law tort and professional
malpractice claims arising within their geographic boundaries unless a specific federal
question or diversity of citizenship exists.
5. In a civil lawsuit brought by a corporate client against its former auditor, the party
bearing the burden of proof by a preponderance of the evidence is the:
A. Defendant
B. Prosecutor
C. Plaintiff
D. Judge
In civil litigation, the plaintiff initiates the lawsuit and bears the burden of proving the
allegations by a preponderance of the evidence.
6. A CPA firm wishes to resolve a fee dispute with a client privately, maintaining
confidentiality and utilizing a neutral third party who will render a binding decision.
Which method should they choose?
A. Mediation
B. Negotiation
C. Arbitration
, D. Litigation
Arbitration involves a neutral third party who hears arguments and evidence and renders a
binding decision, unlike mediation where the mediator only assists parties in reaching a
voluntary agreement.
7. Which element is essential to form a valid, enforceable contract under common law?
A. Notarized signatures
B. Mutual assent
C. Formal written document
D. Government approval
Mutual assent, typically manifested through offer and acceptance, is a foundational
requirement for the formation of a binding contract, regardless of whether it is written or oral.
8. An accountant offers via email to perform an annual audit for a corporate client for a
flat fee of ten thousand dollars, stating the offer remains open for ten days. Two days later,
the accountant sends another email revoking the offer before the client accepts. Is this
revocation effective?
A. No, because the accountant promised to keep it open for ten days without consideration.
B. Yes, because an offeror can generally revoke an offer at any time prior to acceptance if
no consideration was given to keep it open.
C. No, because offers made in writing are irrevocable under all circumstances.
D. Yes, but only if the client acknowledges receipt of the revocation.
Under common law, an offeror can revoke an option-free offer at any time before the offeree
accepts, provided the revocation is communicated to the offeree prior to acceptance.
9. A client promises to pay an accountant a five thousand dollar bonus if the accountant
successfully reduces the client's tax liability by a certain date. The accountant performs the
work and achieves the goal. This contract is classified as:
A. Bilateral and executory
B. Unilateral and executed
C. Implied-in-fact
QUESTIONS AND ANSWERS | VERIFIED AND WELL DETAILED
ANSWERS PLUS RATIONALES | GUARANTEED PASS | LATEST
EXAM UPDATE | EXAM PREP | STUDY GUIDE | PRACTICE TEST
| DOWNLOAD INSTANT PDF
1. Which of the following sources of law is created by administrative agencies through
rulemaking and adjudication?
A. Statutory law
B. Administrative law
C. Common law
D. Constitutional law
Administrative law consists of rules, orders, and decisions established by administrative
agencies to carry out their regulatory duties, whereas statutory law is enacted by legislative
bodies.
2. A state legislature passes a law lowering the legal blood alcohol concentration limit for
driving. This new enactment is an example of what type of law?
A. Case law
B. Administrative law
C. Statutory law
D. Regulatory law
Statutes are laws enacted by legislative bodies, such as state legislatures or the federal
Congress, which then become part of the body of statutory law.
3. When a state court adopts the reasoning of a prior court decision regarding a contract
dispute because the facts are nearly identical, the court is relying on the doctrine of:
A. Stare decisis
B. Certiorari
C. Res ipsa loquitur
,D. Jurisdiction
Stare decisis is the legal doctrine by which judges are obligated to follow precedents
established by prior court decisions within their jurisdiction.
4. An accountant providing tax services in Texas is sued for malpractice. Which court
system generally has primary jurisdiction over professional negligence claims involving
local service providers unless federal diversity requirements are met?
A. Federal district court
B. State trial court
C. United States Supreme Court
D. Federal bankruptcy court
State trial courts possess general jurisdiction to hear common law tort and professional
malpractice claims arising within their geographic boundaries unless a specific federal
question or diversity of citizenship exists.
5. In a civil lawsuit brought by a corporate client against its former auditor, the party
bearing the burden of proof by a preponderance of the evidence is the:
A. Defendant
B. Prosecutor
C. Plaintiff
D. Judge
In civil litigation, the plaintiff initiates the lawsuit and bears the burden of proving the
allegations by a preponderance of the evidence.
6. A CPA firm wishes to resolve a fee dispute with a client privately, maintaining
confidentiality and utilizing a neutral third party who will render a binding decision.
Which method should they choose?
A. Mediation
B. Negotiation
C. Arbitration
, D. Litigation
Arbitration involves a neutral third party who hears arguments and evidence and renders a
binding decision, unlike mediation where the mediator only assists parties in reaching a
voluntary agreement.
7. Which element is essential to form a valid, enforceable contract under common law?
A. Notarized signatures
B. Mutual assent
C. Formal written document
D. Government approval
Mutual assent, typically manifested through offer and acceptance, is a foundational
requirement for the formation of a binding contract, regardless of whether it is written or oral.
8. An accountant offers via email to perform an annual audit for a corporate client for a
flat fee of ten thousand dollars, stating the offer remains open for ten days. Two days later,
the accountant sends another email revoking the offer before the client accepts. Is this
revocation effective?
A. No, because the accountant promised to keep it open for ten days without consideration.
B. Yes, because an offeror can generally revoke an offer at any time prior to acceptance if
no consideration was given to keep it open.
C. No, because offers made in writing are irrevocable under all circumstances.
D. Yes, but only if the client acknowledges receipt of the revocation.
Under common law, an offeror can revoke an option-free offer at any time before the offeree
accepts, provided the revocation is communicated to the offeree prior to acceptance.
9. A client promises to pay an accountant a five thousand dollar bonus if the accountant
successfully reduces the client's tax liability by a certain date. The accountant performs the
work and achieves the goal. This contract is classified as:
A. Bilateral and executory
B. Unilateral and executed
C. Implied-in-fact
