WGU D216 BUSINESS LAW FOR ACCOUNTANTS COMPLETE COLLECTION
OF EXAM QUESTIONS WITH ACCURATE ANSWERS
What does "scienter" mean in legal terms? ANSWER A person possesses
both awareness of wrongdoing and the intention to commit that
wrongdoing</span>
What did the Sarbanes-Oxley Act of 2002 establish? ANSWER It
established the Public Company Accounting Oversight Board and mandates that
senior executives (CEO, CFO, and other high-level managers) must maintain
effective internal control systems, which undergo annual review by senior
management</span>
What is the role of outside directors? ANSWER They supervise the
accounting processes and financial reporting of publicly-traded companies and
examine these with the audit committee</span>
How is common law defined? ANSWER A legal system built upon judicial
decisions and court rulings</span>
What is the purpose of the Federal Trade Commission (FTC)? ANSWER
To prohibit unfair business practices such as bait-and-switch tactics, puffery,
and half-truths</span>
What does the Lanham Act protect? ANSWER It safeguards trademarks and
addresses false advertising claims. Plaintiffs must demonstrate harm to
reputation, direct causation from false advertising, and business losses from
those who were deceived</span>
What are telemarketers required to do under the Telemarketing and
Consumer Fraud and Abuse Prevention Act? ANSWER They must identify
the seller's name, describe the product, disclose all material facts including total
cost, and remove customers from calling lists upon request (note: the
salesperson's name doesn't count as the seller - it must be the brand, business, or
actual seller)</span>
, What does the Fair and Accurate Credit Transactions Act provide?
ANSWER Consumers are entitled to one free credit report annually</span>
What does the Securities Exchange Act of 1933 require? ANSWER Public
companies must register with the SEC and complete a prospectus</span>
What does the Securities Exchange Act of 1934 mandate? ANSWER Public
companies must provide ongoing disclosure (Form 10-Q, Form 10-K) to
prevent fraud and insider trading (Rule 10-b)</span>
What defines an employer/principal relationship? ANSWER The employer
grants the employee/agent authority to interact with third parties (this creates an
agency relationship)</span>
How does an employer/independent contractor relationship differ?
ANSWER The principal cannot control the agent's actions (this is NOT an
agency relationship due to lack of control)</span>
What is the doctrine of respondeat superior? ANSWER The agent is liable
for their own negligence; the principal is liable for the agent's actions if harm to
a third party occurred while the agent was acting on the principal's
behalf</span>
What does "compensate" mean in principal-agent duties? ANSWER The
principal's obligation to pay the agent for services rendered</span>
What is reimbursement in agency law? ANSWER The principal's duty to
pay the agent back for expenses incurred</span>
What does indemnification mean? ANSWER The principal's responsibility to
compensate the agent if the agent faces a lawsuit while working in the
principal's service</span>
What is the cooperation duty? ANSWER The principal must not interfere
with or prevent the agent's performance</span>
What characterizes a sole proprietorship? ANSWER A business structure
where the owner IS the business. Income is taxed on personal returns, and the
owner has unlimited personal liability for all business obligations with no asset
protection</span>
What is the safe working conditions duty? ANSWER The principal must
provide a suitable work environment for agents</span>
What defines a general partnership? ANSWER A business form where two
or more individuals operate a business for profit. Joint liability exists, meaning
OF EXAM QUESTIONS WITH ACCURATE ANSWERS
What does "scienter" mean in legal terms? ANSWER A person possesses
both awareness of wrongdoing and the intention to commit that
wrongdoing</span>
What did the Sarbanes-Oxley Act of 2002 establish? ANSWER It
established the Public Company Accounting Oversight Board and mandates that
senior executives (CEO, CFO, and other high-level managers) must maintain
effective internal control systems, which undergo annual review by senior
management</span>
What is the role of outside directors? ANSWER They supervise the
accounting processes and financial reporting of publicly-traded companies and
examine these with the audit committee</span>
How is common law defined? ANSWER A legal system built upon judicial
decisions and court rulings</span>
What is the purpose of the Federal Trade Commission (FTC)? ANSWER
To prohibit unfair business practices such as bait-and-switch tactics, puffery,
and half-truths</span>
What does the Lanham Act protect? ANSWER It safeguards trademarks and
addresses false advertising claims. Plaintiffs must demonstrate harm to
reputation, direct causation from false advertising, and business losses from
those who were deceived</span>
What are telemarketers required to do under the Telemarketing and
Consumer Fraud and Abuse Prevention Act? ANSWER They must identify
the seller's name, describe the product, disclose all material facts including total
cost, and remove customers from calling lists upon request (note: the
salesperson's name doesn't count as the seller - it must be the brand, business, or
actual seller)</span>
, What does the Fair and Accurate Credit Transactions Act provide?
ANSWER Consumers are entitled to one free credit report annually</span>
What does the Securities Exchange Act of 1933 require? ANSWER Public
companies must register with the SEC and complete a prospectus</span>
What does the Securities Exchange Act of 1934 mandate? ANSWER Public
companies must provide ongoing disclosure (Form 10-Q, Form 10-K) to
prevent fraud and insider trading (Rule 10-b)</span>
What defines an employer/principal relationship? ANSWER The employer
grants the employee/agent authority to interact with third parties (this creates an
agency relationship)</span>
How does an employer/independent contractor relationship differ?
ANSWER The principal cannot control the agent's actions (this is NOT an
agency relationship due to lack of control)</span>
What is the doctrine of respondeat superior? ANSWER The agent is liable
for their own negligence; the principal is liable for the agent's actions if harm to
a third party occurred while the agent was acting on the principal's
behalf</span>
What does "compensate" mean in principal-agent duties? ANSWER The
principal's obligation to pay the agent for services rendered</span>
What is reimbursement in agency law? ANSWER The principal's duty to
pay the agent back for expenses incurred</span>
What does indemnification mean? ANSWER The principal's responsibility to
compensate the agent if the agent faces a lawsuit while working in the
principal's service</span>
What is the cooperation duty? ANSWER The principal must not interfere
with or prevent the agent's performance</span>
What characterizes a sole proprietorship? ANSWER A business structure
where the owner IS the business. Income is taxed on personal returns, and the
owner has unlimited personal liability for all business obligations with no asset
protection</span>
What is the safe working conditions duty? ANSWER The principal must
provide a suitable work environment for agents</span>
What defines a general partnership? ANSWER A business form where two
or more individuals operate a business for profit. Joint liability exists, meaning
