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WGU D216 Business Law for Accountants OA EXAM
QUESTIONS AND CORRECT VERIFIED SOLUTIONS LATEST
UPDATE THIS YEAR – JUST RELEASED
WGU D216 Business Law for Accountants OA
Course Overview
D216 focuses on legal concepts impacting accounting and business transaction decisions. The
exam covers four competencies: Government Regulations, Agency, Contracts, and Debtor-
Creditor Relationships . The OA is application-based, testing your ability to evaluate business
transactions and contracts, apply federal regulations, and understand agency/principal
authority .
Exam Coverage Areas (10 Key Domains)
1. The Legal System & Sources of Law
Constitutional Law: U.S. Constitution (supreme law), state constitutions
Statutory Law: federal statutes, state statutes, local ordinances, uniform laws (UCC)
Case Law & Common Law Doctrines: judge-made law, legal precedents, stare decisis
Administrative Law: regulations created by agencies (FTC, SEC, EPA)
Equity vs. Law: remedies include specific performance, injunction, rescission,
reformation
2. Ethics & Professional Responsibility
Outcome-based ethics: focuses on consequences of an action; maximizes benefits,
minimizes harm
Duty-based ethics: focuses on obligations, rights, religious-derived standards
Sarbanes-Oxley Act (SOX): requires CEO and CFO to certify 10-K and 10-Q filings
PCAOB: created by SOX to oversee audits of public companies
Audit committee: comprised of outside (independent) directors
Corporate executive stock transactions must be reported to SEC to discourage insider
trading
3. Agency Law
Agent authority types:
o Express authority: specifically stated in agency agreement (written or oral)
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o Implied authority: necessary to carry out express authority (e.g., agent driving
car has implied authority to buy gas)
o Apparent authority: principal's conduct leads third parties to believe agent has
authority
o Agency by operation of law: created by law (spouse's authority to charge
necessities)
Fiduciary duties: agent owes principal duties of loyalty, care, obedience, accounting
Principal's duties: reimburse, indemnify, compensate agent
Termination: by act of parties; by operation of law (death, insanity, bankruptcy)
Principal's liability: liable for agent's contracts and torts committed within scope of
agency
Liability for agent's torts: principal may be vicariously liable
4. Contracts
Elements: Agreement (offer + acceptance), Consideration, Capacity, Legality
Offer: must be definite; terminates by revocation, rejection, lapse, death
Acceptance: must be unequivocal; mirror image rule
Consideration: bargained-for exchange; something of legal value
Capacity: minors (voidable), mentally incompetent, intoxicated
Legality: contracts for illegal purposes are void
Contracts within Statute of Frauds: must be in writing (real estate, surety, marriage, >1
year, goods over $500 under UCC)
Remedies: damages (compensatory, consequential, punitive), equitable remedies
(specific performance, injunction, rescission)
Parol evidence rule: written contract's final terms cannot be contradicted by prior oral
agreements
200 Multiple Choice Questions with Rationales
SECTION 1: THE LEGAL SYSTEM & SOURCES OF LAW (Questions 1-20)
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Question 1
What is the supreme law of the land in the United States?
A) The Declaration of Independence
B) The U.S. Constitution
C) Federal statutes
D) Common law
Correct Answer: B
Rationale: The U.S. Constitution is the supreme law of the land. State constitutions are supreme
within state borders to the extent they do not conflict with the U.S. Constitution. Federal
statutes may not violate the Constitution, and state statutes may not violate either the U.S.
Constitution or the relevant state constitution .
Question 2
Which of the following is a primary source of law?
A) A legal encyclopedia
B) A law review article
C) A state statute
D) A Restatement of Law
Correct Answer: C
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Rationale: Primary sources of law include constitutional law, statutory law (statutes passed by
Congress, state legislatures, or local governing bodies), regulations created by administrative
agencies, and case law/common law doctrines. Secondary sources are books and articles that
summarize and clarify primary sources .
Question 3
What is the purpose of the National Conference of Commissioners on Uniform State Laws
(NCCUSL)?
A) To enforce federal laws across all states
B) To draft uniform laws for states to consider adopting
C) To interpret the U.S. Constitution
D) To regulate interstate commerce
Correct Answer: B
Rationale: The NCCUSL's object is to draft uniform laws (model statutes) for the states to
consider adopting. It was created to ease the difficulties of conducting trade and commerce
among and across states .
Question 4
What is administrative law?
A) Laws passed by Congress
WGU D216 Business Law for Accountants OA EXAM
QUESTIONS AND CORRECT VERIFIED SOLUTIONS LATEST
UPDATE THIS YEAR – JUST RELEASED
WGU D216 Business Law for Accountants OA
Course Overview
D216 focuses on legal concepts impacting accounting and business transaction decisions. The
exam covers four competencies: Government Regulations, Agency, Contracts, and Debtor-
Creditor Relationships . The OA is application-based, testing your ability to evaluate business
transactions and contracts, apply federal regulations, and understand agency/principal
authority .
Exam Coverage Areas (10 Key Domains)
1. The Legal System & Sources of Law
Constitutional Law: U.S. Constitution (supreme law), state constitutions
Statutory Law: federal statutes, state statutes, local ordinances, uniform laws (UCC)
Case Law & Common Law Doctrines: judge-made law, legal precedents, stare decisis
Administrative Law: regulations created by agencies (FTC, SEC, EPA)
Equity vs. Law: remedies include specific performance, injunction, rescission,
reformation
2. Ethics & Professional Responsibility
Outcome-based ethics: focuses on consequences of an action; maximizes benefits,
minimizes harm
Duty-based ethics: focuses on obligations, rights, religious-derived standards
Sarbanes-Oxley Act (SOX): requires CEO and CFO to certify 10-K and 10-Q filings
PCAOB: created by SOX to oversee audits of public companies
Audit committee: comprised of outside (independent) directors
Corporate executive stock transactions must be reported to SEC to discourage insider
trading
3. Agency Law
Agent authority types:
o Express authority: specifically stated in agency agreement (written or oral)
, Page 2 of 114
o Implied authority: necessary to carry out express authority (e.g., agent driving
car has implied authority to buy gas)
o Apparent authority: principal's conduct leads third parties to believe agent has
authority
o Agency by operation of law: created by law (spouse's authority to charge
necessities)
Fiduciary duties: agent owes principal duties of loyalty, care, obedience, accounting
Principal's duties: reimburse, indemnify, compensate agent
Termination: by act of parties; by operation of law (death, insanity, bankruptcy)
Principal's liability: liable for agent's contracts and torts committed within scope of
agency
Liability for agent's torts: principal may be vicariously liable
4. Contracts
Elements: Agreement (offer + acceptance), Consideration, Capacity, Legality
Offer: must be definite; terminates by revocation, rejection, lapse, death
Acceptance: must be unequivocal; mirror image rule
Consideration: bargained-for exchange; something of legal value
Capacity: minors (voidable), mentally incompetent, intoxicated
Legality: contracts for illegal purposes are void
Contracts within Statute of Frauds: must be in writing (real estate, surety, marriage, >1
year, goods over $500 under UCC)
Remedies: damages (compensatory, consequential, punitive), equitable remedies
(specific performance, injunction, rescission)
Parol evidence rule: written contract's final terms cannot be contradicted by prior oral
agreements
200 Multiple Choice Questions with Rationales
SECTION 1: THE LEGAL SYSTEM & SOURCES OF LAW (Questions 1-20)
, Page 3 of 114
Question 1
What is the supreme law of the land in the United States?
A) The Declaration of Independence
B) The U.S. Constitution
C) Federal statutes
D) Common law
Correct Answer: B
Rationale: The U.S. Constitution is the supreme law of the land. State constitutions are supreme
within state borders to the extent they do not conflict with the U.S. Constitution. Federal
statutes may not violate the Constitution, and state statutes may not violate either the U.S.
Constitution or the relevant state constitution .
Question 2
Which of the following is a primary source of law?
A) A legal encyclopedia
B) A law review article
C) A state statute
D) A Restatement of Law
Correct Answer: C
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Rationale: Primary sources of law include constitutional law, statutory law (statutes passed by
Congress, state legislatures, or local governing bodies), regulations created by administrative
agencies, and case law/common law doctrines. Secondary sources are books and articles that
summarize and clarify primary sources .
Question 3
What is the purpose of the National Conference of Commissioners on Uniform State Laws
(NCCUSL)?
A) To enforce federal laws across all states
B) To draft uniform laws for states to consider adopting
C) To interpret the U.S. Constitution
D) To regulate interstate commerce
Correct Answer: B
Rationale: The NCCUSL's object is to draft uniform laws (model statutes) for the states to
consider adopting. It was created to ease the difficulties of conducting trade and commerce
among and across states .
Question 4
What is administrative law?
A) Laws passed by Congress
