IAB Business Law & Ethics 5 — Questions and Answers
Question 1: The Americans with Disabilities Act (ADA) requires employers with 15 or more employees to:
- Hire a minimum percentage of disabled workers
- Provide reasonable accommodations to qualified individuals with disabilities (Correct answer)
- Reserve specific job categories exclusively for disabled employees
- Conduct annual disability assessments of all staff
Correct answer: Provide reasonable accommodations to qualified individuals with disabilities
The ADA requires covered employers to provide reasonable accommodations to qualified individuals with disabilities unless doing so would cause undue hardship.
Question 2: In a Chapter 7 bankruptcy, which type of debt is generally NOT dischargeable?
- Credit card debt
- Medical bills
- Student loans (in most cases) (Correct answer)
- Personal loans from a bank
Correct answer: Student loans (in most cases)
Student loans are generally non-dischargeable in bankruptcy unless the debtor can prove undue hardship, which courts apply very strictly.
Question 3: The ethical principle of 'confidentiality' for a bookkeeper means:
- Never sharing any information with government agencies
- Protecting client financial information from unauthorized disclosure (Correct answer)
- Refusing to testify in any legal proceedings
- Keeping all business dealings off the record
Correct answer: Protecting client financial information from unauthorized disclosure
Confidentiality requires bookkeepers to safeguard sensitive client and employer financial information and not disclose it without proper authorization or legal obligation.
Question 4: A 'non-compete agreement' is a contract in which an employee agrees to:
- Not compete with coworkers for internal promotions
- Refrain from working for competitors or starting a competing business for a defined period after employment ends (Correct answer)
- Share competitive intelligence with their employer
- Accept a lower wage in exchange for job security
Correct answer: Refrain from working for competitors or starting a competing business for a defined period after employment ends
Non-compete agreements restrict former employees from working in competing roles or starting competing businesses within a specific geographic area and time frame.
Question 5: Under the principle of 'respondeat superior,' an employer can be held liable for an employee's wrongful act if:
- The employee was acting within the scope of their employment (Correct answer)
- The employee was acting for purely personal reasons
- The employer had prior knowledge of the wrongful act
- The employee signed an indemnification agreement
Correct answer: The employee was acting within the scope of their employment
Respondeat superior ('let the master answer') holds employers vicariously liable for torts committed by employees while acting within the scope of their employment.
Question 6: A 'material breach' of contract differs from a 'minor breach' because a material breach:
- Involves a breach of a verbal agreement only
- Allows the non-breaching party to treat the contract as terminated and sue for damages (Correct answer)
- Results only in a warning and an opportunity to cure
- Only applies to contracts over a specific dollar amount
Correct answer: Allows the non-breaching party to treat the contract as terminated and sue for damages
A material breach goes to the heart of the contract and allows the innocent party to consider the contract discharged and pursue full damages.
Question 7: Which federal agency is primarily responsible for enforcing US securities laws and protecting investors?
- Federal Trade Commission (FTC)
- Securities and Exchange Commission (SEC) (Correct answer)
- Financial Industry Regulatory Authority (FINRA)
- Consumer Financial Protection Bureau (CFPB)
Correct answer: Securities and Exchange Commission (SEC)
The SEC is the primary federal regulator that enforces securities laws, oversees securities markets, and protects investors from fraud and manipulation.
IAB Business Law & Ethics 5
The Americans with Disabilities Act (ADA) requires employers with 15 or more employees to: