MGMT 246 EXAM #3 UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
1. 1.) Which of the following is not common ground for general and limited partnerships?
A.) Separate legal entity.
B.) Pass-through entity.
C.) Concerns about alter ego liability.
D.) Association of two or more persons.
Answer:
C
Question:
2. 2.) Which of the following best describes the role of the board of directors for a corporation?
A.) The board sets policy and business direction for the corporation.
B.) The board hires the officers for the corporation.
C.) Both A and B.
D.) Neither A nor B.
Answer:
C
Question:
3. 3.) Who is an owner of a sole proprietorship?
A.) Shareholder.
B.) Partner.
C.) Member.
D.) None of the above.
Answer:
D
Question:
4. Nigel was an employee of Bernardo Corporation. His employment contract stated that he could be fired
"only upon proof of good cause." His employment contract also stated that he could not be fired until after
an opportunity to present his side of the story. At the corporation's Halloween party held after work on
October 31, 2018, Nigel got drunk and told several of his co-workers that he "would like to have sex right
now!" All of the co-workers were offended and told Nigel's supervisor who immediately fired Nigel. The
next day, Nigel called the supervisor and promised that "this will never happen again and I am so sorry."
However, the supervisor told Nigel that he was still fired. Nigel sued the corporation for wrongful
employment termination.
4.) Which of the following is Nigel's best argument in support of his lawsuit?
A.) He was not given an opportunity to present his side of the story before he was fired.
B.) He could be fired "only upon proof of good cause."
C.) He was drunk when he told several of his co-workers that he "would like to have sex right now!"
D.) The next day, Nigel called the supervisor and promised that "this will never happen again and I am so
sorry."
,Answer:
A
Question:
5. Nigel was an employee of Bernardo Corporation. His employment contract stated that he could be fired
"only upon proof of good cause." His employment contract also stated that he could not be fired until after
an opportunity to present his side of the story. At the corporation's Halloween party held after work on
October 31, 2018, Nigel got drunk and told several of his co-workers that he "would like to have sex right
now!" All of the co-workers were offended and told Nigel's supervisor who immediately fired Nigel. The
next day, Nigel called the supervisor and promised that "this will never happen again and I am so sorry."
However, the supervisor told Nigel that he was still fired. Nigel sued the corporation for wrongful
employment termination.
5.) Which of the following is the corporation's best argument against Nigel's lawsuit?
A.) He was not given an opportunity to present his side of the story before he was fired.
B.) He could be fired "only upon proof of good cause."
C.) He was drunk when he told several of his co-workers that he "would like to have sex right now!"
D.) The next day, Nigel called the supervisor and promised that "this will never happen again and I am so
sorry."
Answer:
B
Question:
6. Pollo and Gordo were 50/50 shareholders in a corporation called Sanchez Homes, Inc. The corporation
was in the business of "flipping" homes; in other words, buying homes and then fixing them up to sell at a
profit. The corporation had been in business for about three years and had done very well due to the good
economy established by President Obama. Pollo and Gordo both did substantial work on the corporation's
behalf. The corporation had held all required annual meetings and complied with all of the filing
requirements. The corporation did not have separate bank accounts. All income generated by the
corporation was deposited half in Pollo's personal bank account and half in Gordo's personal bank account.
Likewise, half of the corporation's bills were paid by Pollo and half by Gordo. However, the corporation
had always filed its own income tax returns which accurately showed corporate income and expenses. A
consultant who had done some work for the corporation sued the corporation, Pollo and Gordo for breach
of contract. The consultant had been paid only $8,000.00 for his work even though his employment
contract stated he was to be paid $10,000.00.
6.) Which of the following is the best argument in favor of the consultant against Pollo and Gordo?
A.) The consultant had not been paid the full amount of money stated in his employment contract.
B.) All income generated by the corporation was deposited half in Pollo's personal bank account and half
in Gordo's personal bank account.
C.) The consultant's lawsuit was for breach of contract and not fraud.
D.) The corporation had always filed its own income tax returns which accurately showed corporate
income and expenses.
Answer:
B
, Question:
7. Pollo and Gordo were 50/50 shareholders in a corporation called Sanchez Homes, Inc. The corporation
was in the business of "flipping" homes; in other words, buying homes and then fixing them up to sell at a
profit. The corporation had been in business for about three years and had done very well due to the good
economy established by President Obama. Pollo and Gordo both did substantial work on the corporation's
behalf. The corporation had held all required annual meetings and complied with all of the filing
requirements. The corporation did not have separate bank accounts. All income generated by the
corporation was deposited half in Pollo's personal bank account and half in Gordo's personal bank account.
Likewise, half of the corporation's bills were paid by Pollo and half by Gordo. However, the corporation
had always filed its own income tax returns which accurately showed corporate income and expenses. A
consultant who had done some work for the corporation sued the corporation, Pollo and Gordo for breach
of contract. The consultant had been paid only $8,000.00 for his work even though his employment
contract stated he was to be paid $10,000.00.
7.) Which of the following is the best argument in favor of Pollo and Gordo against the consultant?
A.) The consultant had not been paid the full amount of money stated in his employment contract.
B.) All income generated by the corporation was deposited half in Pollo's personal bank account and half
in Gordo's personal bank account.
C.) The consultant's lawsuit was for breach of contract and not fraud.
D.) The corporation had always filed its own income tax returns which accurately showed corporate
income and expenses.
Answer:
D
CORRECT ANSWERS
Question:
1. 1.) Which of the following is not common ground for general and limited partnerships?
A.) Separate legal entity.
B.) Pass-through entity.
C.) Concerns about alter ego liability.
D.) Association of two or more persons.
Answer:
C
Question:
2. 2.) Which of the following best describes the role of the board of directors for a corporation?
A.) The board sets policy and business direction for the corporation.
B.) The board hires the officers for the corporation.
C.) Both A and B.
D.) Neither A nor B.
Answer:
C
Question:
3. 3.) Who is an owner of a sole proprietorship?
A.) Shareholder.
B.) Partner.
C.) Member.
D.) None of the above.
Answer:
D
Question:
4. Nigel was an employee of Bernardo Corporation. His employment contract stated that he could be fired
"only upon proof of good cause." His employment contract also stated that he could not be fired until after
an opportunity to present his side of the story. At the corporation's Halloween party held after work on
October 31, 2018, Nigel got drunk and told several of his co-workers that he "would like to have sex right
now!" All of the co-workers were offended and told Nigel's supervisor who immediately fired Nigel. The
next day, Nigel called the supervisor and promised that "this will never happen again and I am so sorry."
However, the supervisor told Nigel that he was still fired. Nigel sued the corporation for wrongful
employment termination.
4.) Which of the following is Nigel's best argument in support of his lawsuit?
A.) He was not given an opportunity to present his side of the story before he was fired.
B.) He could be fired "only upon proof of good cause."
C.) He was drunk when he told several of his co-workers that he "would like to have sex right now!"
D.) The next day, Nigel called the supervisor and promised that "this will never happen again and I am so
sorry."
,Answer:
A
Question:
5. Nigel was an employee of Bernardo Corporation. His employment contract stated that he could be fired
"only upon proof of good cause." His employment contract also stated that he could not be fired until after
an opportunity to present his side of the story. At the corporation's Halloween party held after work on
October 31, 2018, Nigel got drunk and told several of his co-workers that he "would like to have sex right
now!" All of the co-workers were offended and told Nigel's supervisor who immediately fired Nigel. The
next day, Nigel called the supervisor and promised that "this will never happen again and I am so sorry."
However, the supervisor told Nigel that he was still fired. Nigel sued the corporation for wrongful
employment termination.
5.) Which of the following is the corporation's best argument against Nigel's lawsuit?
A.) He was not given an opportunity to present his side of the story before he was fired.
B.) He could be fired "only upon proof of good cause."
C.) He was drunk when he told several of his co-workers that he "would like to have sex right now!"
D.) The next day, Nigel called the supervisor and promised that "this will never happen again and I am so
sorry."
Answer:
B
Question:
6. Pollo and Gordo were 50/50 shareholders in a corporation called Sanchez Homes, Inc. The corporation
was in the business of "flipping" homes; in other words, buying homes and then fixing them up to sell at a
profit. The corporation had been in business for about three years and had done very well due to the good
economy established by President Obama. Pollo and Gordo both did substantial work on the corporation's
behalf. The corporation had held all required annual meetings and complied with all of the filing
requirements. The corporation did not have separate bank accounts. All income generated by the
corporation was deposited half in Pollo's personal bank account and half in Gordo's personal bank account.
Likewise, half of the corporation's bills were paid by Pollo and half by Gordo. However, the corporation
had always filed its own income tax returns which accurately showed corporate income and expenses. A
consultant who had done some work for the corporation sued the corporation, Pollo and Gordo for breach
of contract. The consultant had been paid only $8,000.00 for his work even though his employment
contract stated he was to be paid $10,000.00.
6.) Which of the following is the best argument in favor of the consultant against Pollo and Gordo?
A.) The consultant had not been paid the full amount of money stated in his employment contract.
B.) All income generated by the corporation was deposited half in Pollo's personal bank account and half
in Gordo's personal bank account.
C.) The consultant's lawsuit was for breach of contract and not fraud.
D.) The corporation had always filed its own income tax returns which accurately showed corporate
income and expenses.
Answer:
B
, Question:
7. Pollo and Gordo were 50/50 shareholders in a corporation called Sanchez Homes, Inc. The corporation
was in the business of "flipping" homes; in other words, buying homes and then fixing them up to sell at a
profit. The corporation had been in business for about three years and had done very well due to the good
economy established by President Obama. Pollo and Gordo both did substantial work on the corporation's
behalf. The corporation had held all required annual meetings and complied with all of the filing
requirements. The corporation did not have separate bank accounts. All income generated by the
corporation was deposited half in Pollo's personal bank account and half in Gordo's personal bank account.
Likewise, half of the corporation's bills were paid by Pollo and half by Gordo. However, the corporation
had always filed its own income tax returns which accurately showed corporate income and expenses. A
consultant who had done some work for the corporation sued the corporation, Pollo and Gordo for breach
of contract. The consultant had been paid only $8,000.00 for his work even though his employment
contract stated he was to be paid $10,000.00.
7.) Which of the following is the best argument in favor of Pollo and Gordo against the consultant?
A.) The consultant had not been paid the full amount of money stated in his employment contract.
B.) All income generated by the corporation was deposited half in Pollo's personal bank account and half
in Gordo's personal bank account.
C.) The consultant's lawsuit was for breach of contract and not fraud.
D.) The corporation had always filed its own income tax returns which accurately showed corporate
income and expenses.
Answer:
D
