WGU D118 - BUSINESS LAW FOR
ACCOUNTANTS COMPREHENSIVE
EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS
1. Under the Statute of Frauds, which of the following contracts must be in writing to be
enforceable?
A. A contract for the sale of goods valued at $400.
B. A contract for the sale of an interest in land.
C. A contract that can be performed within six months of its formation.
D. A mutual promise to marry.
Answer: B
Conceptual Explanation: The Statute of Frauds requires certain contracts, including those
involving interests in land, to be in writing to be enforceable. Agreements for goods under
$500 (UCC) or those performable within a year generally do not require a writing.
2. Which legal doctrine protects corporate directors from liability for decisions made in good
faith, with the care an ordinarily prudent person would exercise, and in the best interests of
the corporation?
A. The Doctrine of Respondeat Superior
,B. The Business Judgment Rule
C. The Ultra Vires Doctrine
D. The Piercing the Corporate Veil Doctrine
Answer: B
Conceptual Explanation: The Business Judgment Rule protects directors and officers from
liability for honest mistakes of judgment if they acted in good faith and with due care.
3. In a general partnership, what is the extent of the partners’ liability for the firm’s debts and
obligations?
A. Limited to the amount of their capital contribution.
B. Only liable for debts they personally signed for.
C. Limited to the partnership’s assets only.
D. Joint and several liability.
Answer: D
Conceptual Explanation: In a general partnership, partners share joint and several
liability for all partnership obligations, meaning a creditor can sue all partners together or
any one partner for the full amount.
4. Under the Securities Act of 1933, which of the following must be proven by a purchaser of
a security to prevail in a Section 11 claim against an accountant?
A. The accountant acted with scienter (intent to deceive).
, B. The registration statement contained a material misstatement or omission.
C. The purchaser relied on the registration statement.
D. The purchaser was in privity of contract with the accountant.
Answer: B
Conceptual Explanation: Section 11 of the 1933 Act is a strict liability provision; the
plaintiff only needs to prove a material misstatement or omission and damages. Reliance
and scienter are not required.
5. Which of the following is an essential element of a valid offer in contract law?
A. The offer must be made in writing.
B. The offer must be communicated to the public via advertisement.
C. The offeror must have serious objective intent to be bound.
D. The offer must be irrevocable for at least 30 days.
Answer: C
Conceptual Explanation: A valid offer requires serious intent, reasonably certain terms,
and communication to the offeree. Advertisements are generally invitations to negotiate,
not offers.
6. Under UCC Article 2, if a contract for the sale of goods does not specify the place of
delivery, what is the default location?
A. The buyer’s place of business.
ACCOUNTANTS COMPREHENSIVE
EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS
1. Under the Statute of Frauds, which of the following contracts must be in writing to be
enforceable?
A. A contract for the sale of goods valued at $400.
B. A contract for the sale of an interest in land.
C. A contract that can be performed within six months of its formation.
D. A mutual promise to marry.
Answer: B
Conceptual Explanation: The Statute of Frauds requires certain contracts, including those
involving interests in land, to be in writing to be enforceable. Agreements for goods under
$500 (UCC) or those performable within a year generally do not require a writing.
2. Which legal doctrine protects corporate directors from liability for decisions made in good
faith, with the care an ordinarily prudent person would exercise, and in the best interests of
the corporation?
A. The Doctrine of Respondeat Superior
,B. The Business Judgment Rule
C. The Ultra Vires Doctrine
D. The Piercing the Corporate Veil Doctrine
Answer: B
Conceptual Explanation: The Business Judgment Rule protects directors and officers from
liability for honest mistakes of judgment if they acted in good faith and with due care.
3. In a general partnership, what is the extent of the partners’ liability for the firm’s debts and
obligations?
A. Limited to the amount of their capital contribution.
B. Only liable for debts they personally signed for.
C. Limited to the partnership’s assets only.
D. Joint and several liability.
Answer: D
Conceptual Explanation: In a general partnership, partners share joint and several
liability for all partnership obligations, meaning a creditor can sue all partners together or
any one partner for the full amount.
4. Under the Securities Act of 1933, which of the following must be proven by a purchaser of
a security to prevail in a Section 11 claim against an accountant?
A. The accountant acted with scienter (intent to deceive).
, B. The registration statement contained a material misstatement or omission.
C. The purchaser relied on the registration statement.
D. The purchaser was in privity of contract with the accountant.
Answer: B
Conceptual Explanation: Section 11 of the 1933 Act is a strict liability provision; the
plaintiff only needs to prove a material misstatement or omission and damages. Reliance
and scienter are not required.
5. Which of the following is an essential element of a valid offer in contract law?
A. The offer must be made in writing.
B. The offer must be communicated to the public via advertisement.
C. The offeror must have serious objective intent to be bound.
D. The offer must be irrevocable for at least 30 days.
Answer: C
Conceptual Explanation: A valid offer requires serious intent, reasonably certain terms,
and communication to the offeree. Advertisements are generally invitations to negotiate,
not offers.
6. Under UCC Article 2, if a contract for the sale of goods does not specify the place of
delivery, what is the default location?
A. The buyer’s place of business.
