Becker CPA – REG Review Comprehensive Regulation Summary and Exam Prep
B
This |answer |is |correct |because |under |the |common |law, |an |acceptance |must |be |unequivocal |and |
unqualified, |in |the |precise |terms |in |which |the |offer |specified. |The |Uniform |Commercial |Code |alters |
this |general |rule |as |far |as |the |sale |of |goods |is |concerned. |An |offer |to |buy |goods |for |prompt |shipment
|is |construed |to |invite |acceptance, |either |by |a |prompt |promise |to |ship |or |prompt |shipment |unless |the
|language |of |the |offer |specifically |stipulates |otherwise. |Peel |may |accept |Taylor's |offer |by |promptly |
promising |to |ship |the |goods |or |by |prompt |shipment. |- |answersTaylor |signed |and |mailed |a |letter |to |
Peel |which |stated: |"Ship |promptly |600 |dozen |grade |A |eggs." |Taylor's |offer
A. |May |be |accepted |by |Peel |only |by |a |prompt |shipment.
B. |May |be |accepted |by |Peel |either |by |a |prompt |promise |to |ship |or |prompt |shipment |with |notice.
C. |Is |invalid |since |the |price |terms |were |omitted.
D. |Is |invalid |since |the |shipping |terms |were |omitted.
D
This |answer |is |correct |because |the |leasing |arrangement, |to |which |Allen |is |a |surety, |remained |intact |
with |no |modifications. |The |lease, |itself, |expressed |a |holdover |clause |which |went |into |existence |when |
Lear |remained |in |possession |after |the |original |leasing |period. |The |essence |of |a |surety |arrangement |is |
that |the |surety |promises |to |perform |upon |default |of |the |principal |debtor. |Therefore, |Allen |becomes |
liable |when |Lear |defaults |during |the |extended |term |of |the |lease. |- |answersAllen |was |the |surety |for |
the |payment |of |rent |by |Lear |under |a |lease |from |Rosenthal |Rentals. |The |lease |was |for |2 |years. |A |
clause |in |the |lease |stated |that |at |the |expiration |of |the |lease, |the |lessee |had |the |privilege |to |renew |
upon |30 |days' |prior |written |notice |or, |if |the |lessee |remained |in |possession |after |its |expiration, |it |was |
agreed |that |the |lease |was |to |continue |for |2 |years |more. |There |was |a |default |in |the |payment |of |rent |
during |the |extended |term |of |the |lease |and |Rosenthal |is |suing |Allen |for |the |rent |due |based |upon |the |
guarantee. |Allen |contends |that |he |is |liable |only |for |the |initial |term |of |the |lease |and |not |for |the |
extended |term. |Allen |is
A. |Not |liable |since |it |does |not |appear |that |a |judgment |against |Lear |has |been |returned |unsatisfied.
B. |Not |liable |because |there |has |been |a |material |alteration |of |the |surety |undertaking.
C. |Not |liable |because |there |was |a |binding |extension |of |time.
D. |Liable |on |the |surety |undertaking |which |would |include |the |additional |2 |years.
,A
If |you |answered |C, |it |is |wrong. |After-acquired |commercial |tort |claims |are |not |covered |under |the |
Revised |UCC |Secured |Transactions |Article. |- |answersArticle |9 |of |the |UCC |which |governs |security |
interests |has |added |some |items |that |now |are |covered |by |security |interests |law. |Which |of |the |
following |is |true?
A. |Security |interests |in |tort |claims |already |assessed |by |a |court |of |law |are |covered.
B. |After-acquired |commercial |tort |claims |are |covered.
C. |Both |the |mentioned |security |interests |and |after-acquired |commercial |tort |claims |are |covered.
D. |Neither |the |mentioned |security |interests |and |after-acquired |commercial |tort |claims |are |covered.
C
This |answer |is |correct. |As |sureties, |the |owners |are |immediately |liable |on |the |debts |if |the |corporation |
defaults. |No |notice |need |be |given |them. |- |answersThe |Martin |Corporation |was |a |small |family-owned |
corporation |whose |owners |were |also |the |directors |and |officers. |The |corporation's |bankers |insisted |
that |if |any |further |credit |were |to |be |extended |to |the |corporation |the |owners |must |guaranty |payment
|by |the |corporation. |This |guaranty |was |agreed |to |by |the |owners |in |writing, |and |an |additional |$50,000 |
loan |was |granted |to |Martin |Corporation. |Which |of |the |following |best |describes |the |legal |significance |
of |these |events?
A. |The |guaranty |by |the |owners |need |not |have |been |in |writing |since |it |was |primarily |for |their |own |
benefit.
B. |Once |the |owners |agreed |to |the |undertaking |they |automatically |assumed |responsibility |for |all |of |
the |corporation's |prior |debts.
C. |In |the |absence |of |specific |provisions |to |the |contrary, |the |owners |are |immediately |liable |on |the |
debt |in |the |event |of |the |corporation's |default.
D. |Since |the |owners |each |participated |equally |in |the |guaranty, |each |can |be |held |liable |by |the |bank, |
but |only |to |the |extent |of |his |proportionate |share |in |relation |to |the |others.
A
If |you |answered |D, |it |is |incorrect |because |the |offer |is |not |a |firm |offer |since |the |sale |of |land, |not |the |
sale |of |goods, |is |involved. |- |answersMontrose |sent |Bilbo |a |written |offer |to |sell |his |tract |of |land |
located |in |Majorsville |for |$50,000. |The |parties |were |engaged |in |a |separate |dispute. |The |offer |stated |
,that |it |would |be |irrevocable |for |30 |days |if |Bilbo |would |promise |to |refrain |from |suing |Montrose |during
|this |time. |Bilbo |promptly |delivered |a |promise |not |to |sue |during |the |term |of |the |offer |and |to |forego |
suit |if |she |accepted |the |offer. |Montrose |subsequently |decided |that |the |possible |suit |by |Bilbo |was |
groundless |and |therefore |phoned |Bilbo |and |revoked |the |offer |10 |days |after |making |it. |Bilbo |mailed |
an |acceptance |on |the |30th |day. |Montrose |did |not |reply. |Under |the |circumstances
A. |Montrose's |offer |was |supported |by |consideration, |and |was |irrevocable |for |the |30 |day |period.
B. |Bilbo's |promise |was |accepted |by |Montrose |by |his |silence.
C. |Montrose's |revocation, |not |being |in |writing, |was |invalid.
D. |Montrose's |written |offer |would |be |irrevocable |even |without |consideration.
C
If |you |answered |D, |it |is |incorrect |because |the |issue |of |which |party |transcribed |the |contract |is |not |
relevant |when |deciding |whether |a |mistake |is |present |that |will |create |a |voidable |agreement. |- |
answersSilvers |entered |into |a |contract |which |contains |a |substantial |arithmetical |error. |Silvers |asserts |
mistake |as |a |defense |to |his |performance. |Silvers |will |prevail
A. |Only |if |the |mistake |was |a |mutual |mistake.
B. |Only |if |the |error |was |not |due |to |his |negligence.
C. |If |the |error |was |unilateral |and |the |other |party |knew |of |it.
D. |If |the |contract |was |written |by |the |other |party.
D
If |you |answered |B, |it |is |incorrect. |An |irrevocable |agency |need |not |be |contained |in |a |signed |writing. |- |
answersWok |Corp. |has |decided |to |expand |the |scope |of |its |business. |In |this |connection, |it |
contemplates |engaging |several |agents. |Which |of |the |following |agency |relationships |is |within |the |
Statute |of |Frauds |and |thus |should |be |contained |in |a |signed |writing?
A. |A |sales |agency |where |the |agent |normally |will |sell |goods |which |have |a |value |in |excess |of |$500.
B. |An |irrevocable |agency.
C. |An |agency |which |is |of |indefinite |duration |but |which |is |terminable |upon |1 |months' |notice.
D. |An |agency |for |the |forthcoming |calendar |year |which |is |entered |into |in |mid-December |of |the |prior |
year.
, B
This |answer |is |correct |because |Jardine |does |have |the |right |to |proceed |immediately |against |the |surety
|for |the |full |amount |of |the |loan |without |needing |to |first |seek |remedies |against |the |principal |debtor, |
Dent, |or |the |collateral. |- |answersDent |Corporation |received |a |loan |from |Jardine |Finance |Company. |As
|part |of |the |signed |written |agreement, |Jardine |required |that |one |of |the |members |of |the |board |of |
directors |of |Dent |Corporation |act |as |a |surety |for |the |entire |loan. |The |loan |agreement |also |called |for |
some |of |Dent's |real |estate |to |be |used |as |collateral |for |50% |of |the |loan. |Which |of |the |following |is |
correct?
A. |When |the |loan |is |due, |Jardine |must |first |seek |collection |of |the |loan |from |Dent |before |resorting |to |
the |surety |or |the |collateral.
B. |Jardine |may |choose |to |proceed |against |the |surety |for |the |entire |loan |when |the |loan |is |due.
C. |When |the |loan |is |due, |Jardine |needs |to |exhaust |the |collateral |before |resorting |to |the |surety |or |the
|debtor.
D. |Jardine |may |only |resort |to |the |collateral |if |neither |the |surety |nor |the |debtor |can |repay |the |loan |in |
full.
C
This |answer |is |correct. |Under |the |Revised |Uniform |Partnership |Act, |the |partners |have |joint |and |
several |liability |for |all |of |the |partnership |debts. |This |is |true |whether |the |debts |are |based |on |contract |
or |tort |law. |- |answersKinder, |Lau, |and |Sanders |form |a |partnership |under |the |Revised |Uniform |
Partnership |Act |(RUPA). |Which |of |the |following |is |not |true |concerning |the |partnership |itself?
A. |The |partnership |is |a |separate |legal |entity.
B. |The |partnership |may |own |property |in |the |partnership |name.
C. |The |partners |have |joint |but |not |several |liability |for |business |debts.
D. |The |partnership |may |sue |another |business |in |the |partnership |name.
B
This |answer |is |correct |because |even |perfection |will |not |protect |a |secured |party |when |a |purchaser |
buys |goods |in |the |ordinary |course |of |business |from |a |seller |who |deals |in |goods |of |that |kind. |The |
purchaser |will |take |free |of |any |existing |security |interest |(perfected |or |unperfected) |even |if |the |buyer |
knows |of |the |secured |party's |security |interest |at |the |time |of |the |sale. |Therefore, |a |buyer |in |the |
B
This |answer |is |correct |because |under |the |common |law, |an |acceptance |must |be |unequivocal |and |
unqualified, |in |the |precise |terms |in |which |the |offer |specified. |The |Uniform |Commercial |Code |alters |
this |general |rule |as |far |as |the |sale |of |goods |is |concerned. |An |offer |to |buy |goods |for |prompt |shipment
|is |construed |to |invite |acceptance, |either |by |a |prompt |promise |to |ship |or |prompt |shipment |unless |the
|language |of |the |offer |specifically |stipulates |otherwise. |Peel |may |accept |Taylor's |offer |by |promptly |
promising |to |ship |the |goods |or |by |prompt |shipment. |- |answersTaylor |signed |and |mailed |a |letter |to |
Peel |which |stated: |"Ship |promptly |600 |dozen |grade |A |eggs." |Taylor's |offer
A. |May |be |accepted |by |Peel |only |by |a |prompt |shipment.
B. |May |be |accepted |by |Peel |either |by |a |prompt |promise |to |ship |or |prompt |shipment |with |notice.
C. |Is |invalid |since |the |price |terms |were |omitted.
D. |Is |invalid |since |the |shipping |terms |were |omitted.
D
This |answer |is |correct |because |the |leasing |arrangement, |to |which |Allen |is |a |surety, |remained |intact |
with |no |modifications. |The |lease, |itself, |expressed |a |holdover |clause |which |went |into |existence |when |
Lear |remained |in |possession |after |the |original |leasing |period. |The |essence |of |a |surety |arrangement |is |
that |the |surety |promises |to |perform |upon |default |of |the |principal |debtor. |Therefore, |Allen |becomes |
liable |when |Lear |defaults |during |the |extended |term |of |the |lease. |- |answersAllen |was |the |surety |for |
the |payment |of |rent |by |Lear |under |a |lease |from |Rosenthal |Rentals. |The |lease |was |for |2 |years. |A |
clause |in |the |lease |stated |that |at |the |expiration |of |the |lease, |the |lessee |had |the |privilege |to |renew |
upon |30 |days' |prior |written |notice |or, |if |the |lessee |remained |in |possession |after |its |expiration, |it |was |
agreed |that |the |lease |was |to |continue |for |2 |years |more. |There |was |a |default |in |the |payment |of |rent |
during |the |extended |term |of |the |lease |and |Rosenthal |is |suing |Allen |for |the |rent |due |based |upon |the |
guarantee. |Allen |contends |that |he |is |liable |only |for |the |initial |term |of |the |lease |and |not |for |the |
extended |term. |Allen |is
A. |Not |liable |since |it |does |not |appear |that |a |judgment |against |Lear |has |been |returned |unsatisfied.
B. |Not |liable |because |there |has |been |a |material |alteration |of |the |surety |undertaking.
C. |Not |liable |because |there |was |a |binding |extension |of |time.
D. |Liable |on |the |surety |undertaking |which |would |include |the |additional |2 |years.
,A
If |you |answered |C, |it |is |wrong. |After-acquired |commercial |tort |claims |are |not |covered |under |the |
Revised |UCC |Secured |Transactions |Article. |- |answersArticle |9 |of |the |UCC |which |governs |security |
interests |has |added |some |items |that |now |are |covered |by |security |interests |law. |Which |of |the |
following |is |true?
A. |Security |interests |in |tort |claims |already |assessed |by |a |court |of |law |are |covered.
B. |After-acquired |commercial |tort |claims |are |covered.
C. |Both |the |mentioned |security |interests |and |after-acquired |commercial |tort |claims |are |covered.
D. |Neither |the |mentioned |security |interests |and |after-acquired |commercial |tort |claims |are |covered.
C
This |answer |is |correct. |As |sureties, |the |owners |are |immediately |liable |on |the |debts |if |the |corporation |
defaults. |No |notice |need |be |given |them. |- |answersThe |Martin |Corporation |was |a |small |family-owned |
corporation |whose |owners |were |also |the |directors |and |officers. |The |corporation's |bankers |insisted |
that |if |any |further |credit |were |to |be |extended |to |the |corporation |the |owners |must |guaranty |payment
|by |the |corporation. |This |guaranty |was |agreed |to |by |the |owners |in |writing, |and |an |additional |$50,000 |
loan |was |granted |to |Martin |Corporation. |Which |of |the |following |best |describes |the |legal |significance |
of |these |events?
A. |The |guaranty |by |the |owners |need |not |have |been |in |writing |since |it |was |primarily |for |their |own |
benefit.
B. |Once |the |owners |agreed |to |the |undertaking |they |automatically |assumed |responsibility |for |all |of |
the |corporation's |prior |debts.
C. |In |the |absence |of |specific |provisions |to |the |contrary, |the |owners |are |immediately |liable |on |the |
debt |in |the |event |of |the |corporation's |default.
D. |Since |the |owners |each |participated |equally |in |the |guaranty, |each |can |be |held |liable |by |the |bank, |
but |only |to |the |extent |of |his |proportionate |share |in |relation |to |the |others.
A
If |you |answered |D, |it |is |incorrect |because |the |offer |is |not |a |firm |offer |since |the |sale |of |land, |not |the |
sale |of |goods, |is |involved. |- |answersMontrose |sent |Bilbo |a |written |offer |to |sell |his |tract |of |land |
located |in |Majorsville |for |$50,000. |The |parties |were |engaged |in |a |separate |dispute. |The |offer |stated |
,that |it |would |be |irrevocable |for |30 |days |if |Bilbo |would |promise |to |refrain |from |suing |Montrose |during
|this |time. |Bilbo |promptly |delivered |a |promise |not |to |sue |during |the |term |of |the |offer |and |to |forego |
suit |if |she |accepted |the |offer. |Montrose |subsequently |decided |that |the |possible |suit |by |Bilbo |was |
groundless |and |therefore |phoned |Bilbo |and |revoked |the |offer |10 |days |after |making |it. |Bilbo |mailed |
an |acceptance |on |the |30th |day. |Montrose |did |not |reply. |Under |the |circumstances
A. |Montrose's |offer |was |supported |by |consideration, |and |was |irrevocable |for |the |30 |day |period.
B. |Bilbo's |promise |was |accepted |by |Montrose |by |his |silence.
C. |Montrose's |revocation, |not |being |in |writing, |was |invalid.
D. |Montrose's |written |offer |would |be |irrevocable |even |without |consideration.
C
If |you |answered |D, |it |is |incorrect |because |the |issue |of |which |party |transcribed |the |contract |is |not |
relevant |when |deciding |whether |a |mistake |is |present |that |will |create |a |voidable |agreement. |- |
answersSilvers |entered |into |a |contract |which |contains |a |substantial |arithmetical |error. |Silvers |asserts |
mistake |as |a |defense |to |his |performance. |Silvers |will |prevail
A. |Only |if |the |mistake |was |a |mutual |mistake.
B. |Only |if |the |error |was |not |due |to |his |negligence.
C. |If |the |error |was |unilateral |and |the |other |party |knew |of |it.
D. |If |the |contract |was |written |by |the |other |party.
D
If |you |answered |B, |it |is |incorrect. |An |irrevocable |agency |need |not |be |contained |in |a |signed |writing. |- |
answersWok |Corp. |has |decided |to |expand |the |scope |of |its |business. |In |this |connection, |it |
contemplates |engaging |several |agents. |Which |of |the |following |agency |relationships |is |within |the |
Statute |of |Frauds |and |thus |should |be |contained |in |a |signed |writing?
A. |A |sales |agency |where |the |agent |normally |will |sell |goods |which |have |a |value |in |excess |of |$500.
B. |An |irrevocable |agency.
C. |An |agency |which |is |of |indefinite |duration |but |which |is |terminable |upon |1 |months' |notice.
D. |An |agency |for |the |forthcoming |calendar |year |which |is |entered |into |in |mid-December |of |the |prior |
year.
, B
This |answer |is |correct |because |Jardine |does |have |the |right |to |proceed |immediately |against |the |surety
|for |the |full |amount |of |the |loan |without |needing |to |first |seek |remedies |against |the |principal |debtor, |
Dent, |or |the |collateral. |- |answersDent |Corporation |received |a |loan |from |Jardine |Finance |Company. |As
|part |of |the |signed |written |agreement, |Jardine |required |that |one |of |the |members |of |the |board |of |
directors |of |Dent |Corporation |act |as |a |surety |for |the |entire |loan. |The |loan |agreement |also |called |for |
some |of |Dent's |real |estate |to |be |used |as |collateral |for |50% |of |the |loan. |Which |of |the |following |is |
correct?
A. |When |the |loan |is |due, |Jardine |must |first |seek |collection |of |the |loan |from |Dent |before |resorting |to |
the |surety |or |the |collateral.
B. |Jardine |may |choose |to |proceed |against |the |surety |for |the |entire |loan |when |the |loan |is |due.
C. |When |the |loan |is |due, |Jardine |needs |to |exhaust |the |collateral |before |resorting |to |the |surety |or |the
|debtor.
D. |Jardine |may |only |resort |to |the |collateral |if |neither |the |surety |nor |the |debtor |can |repay |the |loan |in |
full.
C
This |answer |is |correct. |Under |the |Revised |Uniform |Partnership |Act, |the |partners |have |joint |and |
several |liability |for |all |of |the |partnership |debts. |This |is |true |whether |the |debts |are |based |on |contract |
or |tort |law. |- |answersKinder, |Lau, |and |Sanders |form |a |partnership |under |the |Revised |Uniform |
Partnership |Act |(RUPA). |Which |of |the |following |is |not |true |concerning |the |partnership |itself?
A. |The |partnership |is |a |separate |legal |entity.
B. |The |partnership |may |own |property |in |the |partnership |name.
C. |The |partners |have |joint |but |not |several |liability |for |business |debts.
D. |The |partnership |may |sue |another |business |in |the |partnership |name.
B
This |answer |is |correct |because |even |perfection |will |not |protect |a |secured |party |when |a |purchaser |
buys |goods |in |the |ordinary |course |of |business |from |a |seller |who |deals |in |goods |of |that |kind. |The |
purchaser |will |take |free |of |any |existing |security |interest |(perfected |or |unperfected) |even |if |the |buyer |
knows |of |the |secured |party's |security |interest |at |the |time |of |the |sale. |Therefore, |a |buyer |in |the |
