Business Law for Accountants - D216 Western Governors
University WGU Questins With Correct Answers
1. Scienter: A person has knowledge of wrongdoing and intent of wrongdoing
2. Sox act of 2002: created the public company accounting oversight board, It states high
level managers (CFO, CEO, Senior roles) must maintain an ettective system of internal controls. Internal
controls get checked by senior management annually
3. Outside Directors: oversee the accounting process and financial reports of a public company
and review it with the audit committee
4. Common law: a body of law established by court decisions
5. Federal Trade commission (FTC): goal is to prevent unfair trade practices ex. bait and
switch, puttery, half truths
6. Lanham Act: protects trademarks, and false advertising claims. one must show injury to
reputation, direct causation by false advertising, loss of business by those deceived
7. Telemarketing and consuming fraud and abuse prevention act:
telemarketer must identify the sellers name, describe the product, disclose all material facts
including total cost, must remove customers name from list if requested. (a salesmans name is not the
seller, must be a brand or business or true seller)
8. Fair and accurate credit transaction act: One free credit report per year
9. Securities exchange act of 1933: companies must register with SEC if they are public,
must complete prospectus
10. Securities exchange act of 1934: public companies must give continuous
disclosure (form-10Q, form-10k) to prevent fraud and insider trading (10-b)
11. Employer / (principal): This person gives the employee / (agent) the right to handle
working with 3rd parties (is a agency relationship)
12. Employer / independent contractor relationship: relationship where
principal cant control the actions of the agent (not an agency relationship because of lack of
principal control)
13. Doctrine of responeat superior: agent liable for own negligence, principal liable
for agent if harm to third party happened while agent was working on principals behalf
14. Compensate: (principal duties to agent set) duty of paying agent for services
15. Reimbursement: (principal duties to agent set) paying agent back for expenses
16. Indemnification: (principal duties to agent set) principal pays agent back if agent
gets sued while in principals service
, Business Law for Accountants - D216 Western Governors
University WGU Questins With Correct Answers
17. Cooperation: (principal duties to agent set) do nothing to prevent agent performance
, Business Law for Accountants - D216 Western Governors
University WGU Questins With Correct Answers
18. Sole Proprietorship: (business forms and member duties set) business form
where the owner is the business, Taxes are on personal income tax, Owner has unlimited personal
liability for all obligations of the business with no asset protection
19. Safe working conditions: (principal duties to agent set) a worthy environment for
agents put in place by principal
20. General partnership: (Business forms and member duties set) Business form where
two or more people carry on a business for profit, Joint liability is in place which means personal
liability is in place and split among partners, In certain situations one partner can be fully liable for
everything (several liability)
21. C Corporation: (Business forms and member duties set) Business form where its
registered and reconized with state and stater law, recognized as its own "person" meaning it has
freedoms and takes on liability which protects members, It gets double taxed, members all get one
equal vote
22. Fiduciary duty: (business forms and member duties set) partners and owners owe
this responsibility to other members and owners
23. Duty of care: (business forms and member duties set) This fiduciary duty covers that
members must refrain from grossly negligent or reckless conduct, intentional misconduct, or violations
of the law (simple or unintentional negligence does not apply)
24. Duty of loyalty: (business forms and member duties set) This fiduciary duty covers
that members must not commit to self dealing, and must work for the benefit partners and not
themselves or other 3rd parties
25. Dissociation: To leave a partnership or LLC ultimately relieving yourself from fiduciary dut
26. Invested capital: What is voting power based on in a LLC?
27. LLC / limited liability company: (Business forms and member duties set) This
business form can choose to be taxed as a C Corporation or like a S corporation (a pass through
tax structure), Members can only be liable and lose up to the amount that they invest and contribute
to the company
28. Piercing the veil: Term for being held responsible for fraud or other crimes regardless if
a business structure is meant to protect you or your liability
29. Chapter 11 bankruptcy: (bankruptcy set) type of bankruptcy that is a business
reorganizing plan to pay back creditors, this type keeps business operations going, Debtor works with
University WGU Questins With Correct Answers
1. Scienter: A person has knowledge of wrongdoing and intent of wrongdoing
2. Sox act of 2002: created the public company accounting oversight board, It states high
level managers (CFO, CEO, Senior roles) must maintain an ettective system of internal controls. Internal
controls get checked by senior management annually
3. Outside Directors: oversee the accounting process and financial reports of a public company
and review it with the audit committee
4. Common law: a body of law established by court decisions
5. Federal Trade commission (FTC): goal is to prevent unfair trade practices ex. bait and
switch, puttery, half truths
6. Lanham Act: protects trademarks, and false advertising claims. one must show injury to
reputation, direct causation by false advertising, loss of business by those deceived
7. Telemarketing and consuming fraud and abuse prevention act:
telemarketer must identify the sellers name, describe the product, disclose all material facts
including total cost, must remove customers name from list if requested. (a salesmans name is not the
seller, must be a brand or business or true seller)
8. Fair and accurate credit transaction act: One free credit report per year
9. Securities exchange act of 1933: companies must register with SEC if they are public,
must complete prospectus
10. Securities exchange act of 1934: public companies must give continuous
disclosure (form-10Q, form-10k) to prevent fraud and insider trading (10-b)
11. Employer / (principal): This person gives the employee / (agent) the right to handle
working with 3rd parties (is a agency relationship)
12. Employer / independent contractor relationship: relationship where
principal cant control the actions of the agent (not an agency relationship because of lack of
principal control)
13. Doctrine of responeat superior: agent liable for own negligence, principal liable
for agent if harm to third party happened while agent was working on principals behalf
14. Compensate: (principal duties to agent set) duty of paying agent for services
15. Reimbursement: (principal duties to agent set) paying agent back for expenses
16. Indemnification: (principal duties to agent set) principal pays agent back if agent
gets sued while in principals service
, Business Law for Accountants - D216 Western Governors
University WGU Questins With Correct Answers
17. Cooperation: (principal duties to agent set) do nothing to prevent agent performance
, Business Law for Accountants - D216 Western Governors
University WGU Questins With Correct Answers
18. Sole Proprietorship: (business forms and member duties set) business form
where the owner is the business, Taxes are on personal income tax, Owner has unlimited personal
liability for all obligations of the business with no asset protection
19. Safe working conditions: (principal duties to agent set) a worthy environment for
agents put in place by principal
20. General partnership: (Business forms and member duties set) Business form where
two or more people carry on a business for profit, Joint liability is in place which means personal
liability is in place and split among partners, In certain situations one partner can be fully liable for
everything (several liability)
21. C Corporation: (Business forms and member duties set) Business form where its
registered and reconized with state and stater law, recognized as its own "person" meaning it has
freedoms and takes on liability which protects members, It gets double taxed, members all get one
equal vote
22. Fiduciary duty: (business forms and member duties set) partners and owners owe
this responsibility to other members and owners
23. Duty of care: (business forms and member duties set) This fiduciary duty covers that
members must refrain from grossly negligent or reckless conduct, intentional misconduct, or violations
of the law (simple or unintentional negligence does not apply)
24. Duty of loyalty: (business forms and member duties set) This fiduciary duty covers
that members must not commit to self dealing, and must work for the benefit partners and not
themselves or other 3rd parties
25. Dissociation: To leave a partnership or LLC ultimately relieving yourself from fiduciary dut
26. Invested capital: What is voting power based on in a LLC?
27. LLC / limited liability company: (Business forms and member duties set) This
business form can choose to be taxed as a C Corporation or like a S corporation (a pass through
tax structure), Members can only be liable and lose up to the amount that they invest and contribute
to the company
28. Piercing the veil: Term for being held responsible for fraud or other crimes regardless if
a business structure is meant to protect you or your liability
29. Chapter 11 bankruptcy: (bankruptcy set) type of bankruptcy that is a business
reorganizing plan to pay back creditors, this type keeps business operations going, Debtor works with
