BUSINESS LAW FINAL IVY TECH QUESTIONS AND
ANSWERS A+ GRADED
On behalf of Bubbly Drinks Company, Calvin signs an instrument in which he
promises to deliver 100 cases of soda as payment to Dispatch & Delivery, Inc., on
April 1. This instrument is
nonnegotiable, because soda is not a medium of exchange authorized or adopted by a
government as currency.
Vera gives Will a $500 check as payment for a debt. Will crudely increases the
amount of the check to $5,000 and deposits the check in his First Bank account.
Vera is liable for the payment of $5,000 to
no one.
A trade acceptance is created when, as part of a deal to buy wheat from Moyo,
Naruta signs a draft ordering the buyer to pay for the wheat within ninety days.
True
To most securely minimize the risk of loss on a loan evidenced by a note, a
creditor needs only the debtor's promise that the note will be paid.
False
Home Products, Inc., warrants its goods to be free of defects. Ian issues an
instrument to Home Products for the purchase of a thermos that leaks. With
respect to payment on the instrument, Ian
has a personal defense against it.
A holder will be deemed to have notice of a defect in an instrument if he or she
has reason to know that it exists, given all the facts and circumstances known at
the time.
True
The holder of a note who needs the funds owed on it can transfer it for cash to a
third party, whom the maker must pay when the note comes due.
True
Both stored-value cards and smart cards contain microchips with security
programming that can authenticate the validity of a financial transaction.
False
When a bank draws a check on itself, the check is a negotiable instrument at the
moment it is issued.
True
A check may fall under Uniform Commercial Code Article 3 as a negotiable
instrument and be subject to UCC Article 4 in the course of collection.
True
A customer's negligence cannot shift the loss when payment is made on a check
with an altered amount.
False
, If any financial institution, such as a brokerage house, handles a check for
payment or collection, the check is covered by UCC Article 4.
False
Teri writes a check for $1,000 drawn on United Bank payable to Vida. Vida
presents the check for payment to United Bank, which dishonors it. The party
most likely liable to Vida is
Teri in a civil suit.
Ridge Bank creates a paper reproduction of customer Sophie's check with the
statement "This is a legal copy of your check. You can use it in the same way you
would use the original check." This is
a substitute check.
Under Chapter 13, a repayment plan must provide for
the same treatment of each claim within a particular class of claim.
If a voluntary petition in bankruptcy is found to be proper, the court's entry of an
order for relief
puts into place an automatic stay.
Under Chapter 7, once the proceeds have been distributed, the obligations of the
debtor most likely to be discharged are
none of the choices.
The last security interest to be perfected is the first in priority over any other
perfected security interests.
False
Any person—including individuals, but not partnerships or corporations—may be
a debtor under Chapter 7.
False
To qualify for a Chapter 7 bankruptcy, a debtor must complete a means test to
determine whether the debtor has been living within his or her means.
False
Under Chapter 7, creditors are paid in a certain order of priority. The highest-
priority class comprises claims for
domestic support.
eGames Inc. employs four hundred workers at three locations in three states.
Workers who lose their jobs with eGames have a right to continued health-care
coverage under the company's group plan unless they
are fired for gross misconduct.
A whistleblower is an employee who publicly reveals a co-worker's unsafe or
illegal activity.
False
Constructive discharge occurs when an employer, to avoid conflict among
workers, discharges an employee engaging in an unconventional act, such as
wearing a hijab.
False
Title VII of the Civil Rights Act applies to employers and labor unions with at least
fifteen employees or members.
ANSWERS A+ GRADED
On behalf of Bubbly Drinks Company, Calvin signs an instrument in which he
promises to deliver 100 cases of soda as payment to Dispatch & Delivery, Inc., on
April 1. This instrument is
nonnegotiable, because soda is not a medium of exchange authorized or adopted by a
government as currency.
Vera gives Will a $500 check as payment for a debt. Will crudely increases the
amount of the check to $5,000 and deposits the check in his First Bank account.
Vera is liable for the payment of $5,000 to
no one.
A trade acceptance is created when, as part of a deal to buy wheat from Moyo,
Naruta signs a draft ordering the buyer to pay for the wheat within ninety days.
True
To most securely minimize the risk of loss on a loan evidenced by a note, a
creditor needs only the debtor's promise that the note will be paid.
False
Home Products, Inc., warrants its goods to be free of defects. Ian issues an
instrument to Home Products for the purchase of a thermos that leaks. With
respect to payment on the instrument, Ian
has a personal defense against it.
A holder will be deemed to have notice of a defect in an instrument if he or she
has reason to know that it exists, given all the facts and circumstances known at
the time.
True
The holder of a note who needs the funds owed on it can transfer it for cash to a
third party, whom the maker must pay when the note comes due.
True
Both stored-value cards and smart cards contain microchips with security
programming that can authenticate the validity of a financial transaction.
False
When a bank draws a check on itself, the check is a negotiable instrument at the
moment it is issued.
True
A check may fall under Uniform Commercial Code Article 3 as a negotiable
instrument and be subject to UCC Article 4 in the course of collection.
True
A customer's negligence cannot shift the loss when payment is made on a check
with an altered amount.
False
, If any financial institution, such as a brokerage house, handles a check for
payment or collection, the check is covered by UCC Article 4.
False
Teri writes a check for $1,000 drawn on United Bank payable to Vida. Vida
presents the check for payment to United Bank, which dishonors it. The party
most likely liable to Vida is
Teri in a civil suit.
Ridge Bank creates a paper reproduction of customer Sophie's check with the
statement "This is a legal copy of your check. You can use it in the same way you
would use the original check." This is
a substitute check.
Under Chapter 13, a repayment plan must provide for
the same treatment of each claim within a particular class of claim.
If a voluntary petition in bankruptcy is found to be proper, the court's entry of an
order for relief
puts into place an automatic stay.
Under Chapter 7, once the proceeds have been distributed, the obligations of the
debtor most likely to be discharged are
none of the choices.
The last security interest to be perfected is the first in priority over any other
perfected security interests.
False
Any person—including individuals, but not partnerships or corporations—may be
a debtor under Chapter 7.
False
To qualify for a Chapter 7 bankruptcy, a debtor must complete a means test to
determine whether the debtor has been living within his or her means.
False
Under Chapter 7, creditors are paid in a certain order of priority. The highest-
priority class comprises claims for
domestic support.
eGames Inc. employs four hundred workers at three locations in three states.
Workers who lose their jobs with eGames have a right to continued health-care
coverage under the company's group plan unless they
are fired for gross misconduct.
A whistleblower is an employee who publicly reveals a co-worker's unsafe or
illegal activity.
False
Constructive discharge occurs when an employer, to avoid conflict among
workers, discharges an employee engaging in an unconventional act, such as
wearing a hijab.
False
Title VII of the Civil Rights Act applies to employers and labor unions with at least
fifteen employees or members.
