ABA Business Law & Ethics 2

Question 1

Under the Uniform Commercial Code (UCC), a merchant's firm offer to buy or sell goods is irrevocable for up to how long without consideration?

Accepted Answer

3 months

Answer

Under UCC Article 2, a merchant's written firm offer is irrevocable for the stated period or, if no period is stated, for a reasonable time not to exceed 3 months.

Question 2

Which ethical theory holds that the morality of an action is determined solely by its consequences or outcomes?

Accepted Answer

Consequentialism

Answer

Consequentialism judges actions as right or wrong based on their results, with utilitarianism (maximizing overall good) being its most common form.

Question 3

A principal who ratifies an unauthorized act by an agent assumes liability as if the act had been authorized from the beginning under which doctrine?

Accepted Answer

Ratification

Answer

Under the doctrine of ratification, a principal who approves an agent's previously unauthorized act is bound to the same extent as if the act had been originally authorized.

Question 4

Which type of business organization provides limited liability to all owners and is NOT required to hold annual meetings or maintain minutes?

Accepted Answer

Limited Liability Company (LLC)

Answer

LLCs provide limited liability to all members and generally do not require the same formalities as corporations, such as annual meetings and minutes.

Question 5

In contract law, 'promissory estoppel' allows enforcement of a promise that lacks consideration when which condition is met?

Accepted Answer

The promisee reasonably relied on the promise to their detriment

Answer

Promissory estoppel enforces a promise without consideration when the promisee reasonably relied on it, suffered a detriment, and injustice can only be avoided by enforcement.

(ABA) Accredited Business Accountant Practice Test

(ABA) Accredited Business Accountant Practice Test

ABA Business Law & Ethics 2