Multiple Choice Answers

Question 1
A cost that is incurred because of a long-range policy decision is known as a:
Answer
discretionary cost.
committed cost.
continuous cost.
standard cost.
Question 2
Which of the following is a plan for acquiring the resources needed to complete the manufacturing activities that will satisfy the organization’s sales forecast?
Answer
Sales budget
Raw materials budget
Production budget
Direct labor budget
Question 3
Standard costs are comprised of two elements:
Answer
the quantity of input and the cost per unit of input.
the quality of input and the cost per unit of input.
the quantity of input and the cost per unit of output.
the quality of input and the cost per unit of output.

Question 4
The production budget uses all of the following except:
Answer
the sales forecast.
the inventory policy.
the cash receipts budget.
the beginning inventory quantity.
Question 5
Which of the following lists the components of the master budget in correct chronological order?
Answer
Cash budget, budgeted income statement, budgeted balance sheet.
Budgeted balance sheet, cash budget, budgeted income statement.
Budgeted income statement, cash budget, budgeted balance sheet.
It doesn’t matter in which order they are prepared.
Question 6
Operating expenses are best budgeted on the basis of knowledge about:
Answer
cost behavior patterns.
relevant range.
prior period actual expenses.
current period budget amounts.

Question 7
The kind of standard that is most useful for planning and control is:
Answer
an attainable standard.
an ideal, or engineered, standard.
a negotiated standard.
a past experience standard.
Question 8
Which of the following items would be included in the operating expense budget?
Answer
Sales commissions.
Raw material purchases.
Cash receipts.
Cost of goods sold.
Question 9
A key to estimating an accurate amount of cash to be collected from sales is:
Answer
the accuracy of the sales forecast.
the accuracy of the estimated collection patterns for sales.
both A and B are keys.
neither A nor B are keys.

Question 10
Developing a standard cost for a product or service will usually involve:
Answer
efforts of cost accounting personnel only.
focusing only on variable costs.
the same kind of communication involved in the overall budgeting process.
concentrating on historical costs and performance levels.
Question 11
A materials purchases budget must be completed immediately after the preparation of the:
Answer
direct labor budget.
operating expense budget.
cash budget.
production budget.
Question 12
A standard cost or production standard that is achievable under actual operating conditions is called a(n):
Answer
attainable standard.
ideal standard.
past experience standard.
average standard.

Question 13
The budgeting process that most likely creates an attitude supportive of achieving organization goals is:
Answer
top-down approach.
zero based approach.
proportionate increase approach.
participative approach.
Question 14
______________ standards allow inefficiencies from prior years to be incorporated into the budget, thus providing little incentive for improvement.
Answer
Ideal
Engineered
Attainable
Past experience
Question 15
The operating expense budget is based on the:
Answer
sales budget.
production budget.
manufacturing overhead budget.
cash budget.

Question 16
An important reason for imposing a minimum cash balance in the cash budget is:
Answer
it provides a cushion that can absorb forecast errors.
it provides extra funds for managers to spend.
it makes the balance sheet look better.
all of the above.
Question 17
Standards are likely to be most useful when expressed in:
Answer
dollars per unit of input to the manufacturing process.
quantities per unit of output from the process being evaluated.
total costs for the accounting period for the department being evaluated.
terms easily related to by the individual whose performance is being evaluated.
Question 18
A budgeting process that involves justifying resource requirements based on an analysis and prioritization of organizational objectives is called:
Answer
continuous budgeting.
zero-based budgeting.
discretionary budgeting.
single-period budgeting.

Question 19
A budget that is prepared for several periods in the future, then revised several times prior to the budget period is called a:
Answer
rolling budget.
zero-based budget.
discretionary budget.
single-period budget.
Question 20
The raw materials budgeted to be purchased for the period is equal to:
Answer
ending inventory + raw material used – beginning inventory.
ending inventory + ending inventory – raw material used.
beginning inventory – ending inventory + raw material used.
beginning inventory + raw material used – ending inventory.

Multiple Choice Answers

In preparing the statement of cash flows, determining the net increase or decrease in cash requires the use of
Answer
the adjusted trial balance.
the current period’s retained earnings statement.
a comparative balance sheet.
a comparative income statement.
Question 2
A company had net income of $242,000. Depreciation expense is $26,000. During the year, accounts receivable and inventory increased $15,000 and $40,000, respectively. Prepaid expenses and accounts payable decreased $2,000 and $4,000, respectively. There was also a loss on the sale of equipment of $3,000. How much cash was provided by operating activities?
Answer
$214,000.
$207,000.
$274,000.
$295,000.
Question 3
The net income reported on the income statement for the current year was $220,000. Depreciation was $50,000. Accounts receivable and inventories decreased by $10,000 and $30,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $1,000 and $8,000. How much cash was provided by operating activities?
Answer $281,000
$317,000
$301,000
$239,000
Question 4
All of the following adjustments would be deducted in determining net cash provided by operating activities except a(n)
Answer
increase in inventories.
depreciation expense.
gain on sale of plant assets.
decrease in accrued expenses payable.

Question 5
In developing the cash flows from operating activities, most companies in the United States
Answer
use the direct method.
use the indirect method.
present both the indirect and direct methods in their financial reports.
prepare the operating activities section on the accrual basis.
Question 6
Cash flows from operating activities, as reported on the statement of cash flows under the indirect method, would include
Answer
receipts from the sale of investments.
net income.
payments for dividends.
receipts from the issuance of capital stock.

Question 7
Joy Elle’s Vegetable Market had the following transactions during 2007:
1. Issued $25,000 of par value common stock for cash.
2. Recorded and paid wages expense of $10,000.
3. Acquired land by issuing common stock of par value $50,000.
4. Declared and paid a cash dividend of $1,000.
5. Sold a long-term investment (cost $3,000) for cash of $3,000.
6. Recorded cash sales of $20,000.
7. Bought inventory for cash of $2,000.
8. Acquired an investment in IBM stock for cash of $6,000.
9. Converted bonds payable to common stock in the amount of $10,000.
10. Repaid a 6 year note payable in the amount of $11,000.
Reference: Ref 12-2
What is the net cash provided by financing activities?
Answer
$13,000.
$25,000.
$14,000.
$9,000.
Question 8
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used.
Reference: Ref 12-1
Purchased inventory with cash.
Answer
Operating activities section
Investing activities section
Financing activities section
Does not represent a cash flow

Question 9
If a loss of $12,500 is incurred in selling (for cash) office equipment having a book value of $50,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is
Answer
$37,500.
$50,000.
$62,500.
$12,500.

Question 10
Land costing $125,000 was sold for $155,000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?
Answer
$125,000
$155,000
$185,000
$30,000
Question 11
A transaction involving a gain on the sale of equipment affects cash provided (used) by
Answer
financing and investing activities.
operating and financing activities.
operating and investing activities.
operating, financing, and investing activities.

Question 12
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used.
Reference: Ref 12-1
Paid income taxes.
Answer
Operating activities section
Investing activities section
Financing activities section
Does not represent a cash flow

Question 13
Financing activities involve
Answer
lending money.
acquiring investments.
issuing debt.
acquiring long-lived assets.
Question 14
The statement of cash flows will not provide insight into
Answer
why dividends were not increased.
whether cash flow is greater than net income.
the exact proceeds of a future bond issue.
how the retirement of debt was accomplished.

Question 15
Preferred stock issued in exchange for land would be reported in the statement of cash flows in
Answer
the cash flows from financing activities section.
the cash flows from investing activities section.
a separate schedule or note to the financial statements.
the cash flows from operating section.

Question 16
To determine the net cash provided (used) by operating activities, it is necessary to analyze
Answer
the current year’s income statement.
a comparative balance sheet.
additional information.
all of the above.

Question 17
In calculating net cash provided by operating activities using the indirect method, an increase in prepaid expenses during a period is
Answer
deducted from net income.
added to net income.
ignored because it does not affect income.
ignored because it does not affect expenses.

Question 18
The category that is generally considered to be the best measure of a company’s ability to continue as a going concern is
Answer
cash flows from operating activities.
cash flows from investing activities.
cash flows from financing activities.
usually different from year to year.

Question 19
All of the following adjustments are added to net income in computing net cash provided by operating activities except
Answer
amortization expense.
a decrease in accounts receivable.
an increase in accounts payable.
an increase in prepaid expenses.

Question 20
Which of the following items does not appear in the statement of cash flows under the direct method?
Answer
Cash payments to suppliers
Cash collections from customers
Depreciation Expense
Cash from the sale of equipment

Multiple Choice Answers

A(n) ________ is a possible product the company might offer to the market.
A. test brand
B. beta version product
C. product concept
D. product idea
E. alpha product
Which of the following is true about direct investment as a mode of international expansion?
A. It allows a firm to retain full control over its investment.
B. It does not allow the firm to diversify.
C. It involves the least amount of risk.
D. It involves the least cost.
E. It yields the lower returns than joint ventures.
The problem with setting a uniform global price for a product is that ________.
A. it allows intermediaries in low-price countries to reship their products to high-price countries
B. it is ineffective for products that are homogeneous
C. this strategy makes the price too high in poor countries and not high enough in rich countries
D. the company would earn the same profits everywhere, regardless of the cost structure
E. this strategy can price the product out of the market in countries where costs are high
In an adapted marketing mix, the company ________.
A. focuses more on brand image than consumer preferences
B. ensures the lowest cost marketing program is adopted
C. ignores differences in the legal environment
D. ensures that uniform practices are adopted across countries
E. tailors the marketing programs to each target market
A2Z Inc. is a producer of a wide variety of consumer goods in Brazil. It has successfully captured a huge share of the domestic market and has been able to create a very strong brand. It is now considering a foray into foreign markets. Its board of directors decide to first try out some of its products in the neighboring country of Argentina. A2Z plans to eventually expand its presence in other countries, after they analyze the impact of their entry into the Argentine market. A2Z Inc. is following a ________.
A. shotgun approach
B. waterfall approach
C. born global approach
D. franchisee approach
E. sprinkler approach
Forces promoting national responsiveness include ________.
A. homogeneous demand
B. strong consumer liking towards foreign goods
C. strong global preferences
D. capital-intensive production
E. strong local preferences
Straight extension of the product means ________.
A. introducing the product to the foreign market without any changes to the product
B. introducing the product to the foreign market with major changes to the product
C. introducing a customized product to the foreign market with existing marketing strategy
D. introducing the product to the foreign market with minor changes to the product
E. introducing a customized product to the foreign market with a new marketing strategy
What is a global firm?
A. A firm that sells its products and services across the world but restricts manufacturing to the home country.
B. A firm that operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages not available to purely domestic competitors.
C. A firm that operates in one country and exports its goods and services to foreign countries.
D. A firm that operates in more than one country and has a sales and marketing staff in those countries.
E. A firm that operates in more than one country but restricts the sale of its products to the home country.
In a sprinkler approach to international expansion, ________.
A. countries are gradually entered sequentially
B. many countries are entered simultaneously
C. countries are entered when competition is limited
D. countries in which the supply of raw material is greatest are entered first
E. you get wet
Product adaptation involves ________.
A. developing a new product and adapting the communication strategy to enter a new market
B. altering the product to meet minimum acceptable standards
C. altering the product to meet local preferences with no change in communication strategy
D. altering both the product and the communication strategy to meet local preferences
E. altering neither the product nor the communication strategy while entering a new market
Hotel chains such as Hyatt sell a variation of the licensing agreement called ________ to the owners of foreign hotels to manage these businesses for a fee.
A. highway robbery
B. indirect exporting
C. management contracts
D. strategic alliance
E. direct exporting
Regional economic integration is defined as the creation of trading agreements between ________.
A. a firm and its suppliers and distributors
B. firms targeting the same market
C. individual firms in an industry
D. blocs of countries
E. related industries
A risk averse attitude is associated with ________.
A. high femininity
B. high individualism
C. high power distance
D. high uncertainty avoidance
E. high collectivism
Which of the following can cause a firm to choose joint ventures as a mode of expansion into foreign markets?
A. lack of sufficient finances
B. preferences of target consumers in the host country
C. lack of redtape-ism in the host country
D. excellent managerial resources
E. psychic proximity of the host country
Which of the following is a risk that firms must consider prior to expanding abroad?
A. The domestic consumers prefer low-priced products.
B. The market in the foreign country may be too similar to the domestic market.
C. The foreign country has very low pollution control standards.
D. The foreign country’s business culture may be too different from the domestic country.
E. Consumers in the foreign country are very particular about the quality of the goods they consume.
Once a firm decides to enter the international market, what is the next step in the decision-making process?
A. deciding on the marketing program
B. deciding how to enter the market
C. deciding how to adapt the product to the new market
D. deciding on the marketing organization
E. deciding which markets to enter
The value proposition is also known as the core positioning of the offering.
A. true
B. false
C. I don’t know.
Which of the following is the best method of recovering customer goodwill?
A. defining and measuring the customer retention rate
B. contacting the complaining customer as quickly as possible
C. free cookies
D. sending service people to conduct door-to-door surveys
E. identifying prospective customers from the customer database
A customer ________ is any occasion on which a customer encounters the brand and product – from actual experience to personal or mass communications to casual observation.
A. point of difference
B. point of parity
C. point of order
D. touch point
E. pivot point
When a manager is trying to identify how the company can efficiently create promising new offerings, he/she is addressing the question of value delivery.
A. true
B. false
C. The manager’s name is George.
The selling concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies.
A. true
B. false
C. that’s a lot of words for one sentence
Competitive intelligence gathering is inherently illegal and unethical.
A. true
B. false
C. I don’t know. A family of wrens built a nest in my computer.
A strategy is a game plan for achieving what the business unit wants to achieve.
A. true
B. false
C. Did you know you can learn strategy from playing Risk?
Marketing plans are becoming more production oriented because of the high costs of doing business in today’s economy.
A. true
B. false
C. boy everything’s more expensive these days
Marketers have little information about how consumption patterns vary across and within countries.
A. true
B. false
C. I don’t know. My penguin ate my book.

Multiple Choice Answers

1. Which of the following is a condition subsequent?
“I promise to a Right elbow either that there is do buy the home for the agreed price if I succeed in getting a loan.”
“I promise to do buy the home for the agreed price on the condition that the Lakers win the NBA Championship.”
“I agree to the terms and conditions of the proposed employment contract and agree to begin work now, but will be released from this contract if the stock market sinks below 10,500.00 in 2012.”
“I promise to begin work in 2011 assuming that inflation stays below 3% in 2010.”
None of the above

2. If a construction contract expressly states that the property owner’s duty to pay the contractor is conditioned on the satisfaction of an architect then the builder cannot recover payments due under the contract if the architect honestly has a good faith reason for withholding a certificate indicating his or her satisfaction.
True
False

3. In a contract for X to sell Y a steam boiler, Y’s obligation to pay is conditioned upon Y’s ‘personal satisfaction’ with the boiler. Even though the boiler meets every mechanical test imaginable, Y refuses to pay because he just doesn’t like the boiler for some reason. Y is not obligated to pay, because the contract said that he must be personally satisfied, and a contract is a contract.
True
False

4. If a party (who made a conditional promise) excuses the occurrence of a contractual condition then that party is bound contractually even if the condition did not occur.  This is called a waiver of the condition.
True
False

5. Y has committed a minor breach of his contract with X. This means that X can:
Sue only for compensatory damages caused by the breach.
Avoid all responsibility under the contract
Cancel the contract.
Limit Y to quasi contract recovery
None of the above

6. Which of the following qualifies as a minor breach a contract?
A failure to substantially perform.
An Anticipatory breach.
A failure to perform on time where time was expressly stated to be of the essence.
None of the above

7. Which of the following is likely to excuse performance of a contract?
An employee who is contractually obligated to a five-year employment contract becomes involved in an auto accident during the third year of the contract.  The accident makes it literally impossible to ever again perform her duties under the contract
The death of a party who was contractually obligated to a lifetime employment contract
A contract to find and procure a rare species of plant that suddenly becomes extinct.
All of the above

8. Someone who recovers for breach of a contract for the sale of wheat generally:
Can recover only for those losses that he can prove with reasonable certainty.
Can recover for all consequences of the breach, whether foreseeable or not.
Has no duty to mitigate (or minimize) damages.
Can obtain specific performance as an alternative to damages at his option.

9. X contracts to build a building for Y, thinking that he will make a profit on the deal. Later, X discovers that he has miscalculated and that the job will not be profitable. In this situation, X is excused from performing to Y.
True
False

10. Winston contracts to sell a plot of land called Blackacre to Buyer for $500,000. Winston breaches the contract and Buyer sues. Blackacre’s reasonable market value at the time of the breach was $525,000.
Buyer can sue for specific performance because real estate is considered unique
Buyer is limited to suing for damages and the recovery cannot exceed $25,000.00

Buyer is limited to suing for damages but there is no limit on the amount that Buyer can recover

None of the above

11. Lili owns a jewelry store on Melrose Avenue. In order to display her jewelry appropriately, she hires Eric the electrician to install new lighting in her store. While the work is being done, the store will be closed. Lili explains to Eric that she needs the work to be done before the weekend, when she makes the most sales. Lili and Eric agree to include in the contract a liquidated damages provision, which states that, if Eric does not complete the work before the weekend, Lili will be able to recover a specified sum for the loss of sales over the weekend. In order for the liquidated damages provision to be enforceable, it must be proven:
That the stated amount must be exactly equal to the actual damages suffered.
That the stated amount must be reasonable in relation to the probable loss or injury.
That actual damages would be difficult to determine.
That Eric is not a licensed electrician.
b and c.

12. The assignee’s notification to the obligor that an assignment has occurred is important because:
This is a common courtesy and the right thing to do
Otherwise the obligor might perform to the assignor rather than the assignee, in which case the obligor is relieved of all liability to the assignee.
Otherwise the obligor’s duty to perform to either the assignor or assignee is completely discharged.
Even if the obligor neither knew nor had reason to know about the assignment, the obligor remains liable to the assignee if it performs to the assignor.

13. Which of the following is not one of the implied warranties that the assignor gives to the assignee?
That the obligor has capacity to contract.
That the contract is not voidable for any reason known to the assignor.
That the assignor has good title to the rights assigned.
That the obligor is solvent.

14. The effect of a valid delegation of duties is that it:
Discharges the delegator from any further liability.
Is an automatic novation.
Discharges the obligee from any further liability.
Appoints the delegatee to perform the delegator’s duty to the obligee.
None of the above

15. Which of the following kinds of third-party beneficiaries normally can enforce a contract?
A creditor beneficiary.
A donee beneficiary.
An incidental beneficiary.
Intended beneficiary
All but C

16. A valid novation discharges the original obligor and substitutes a new obligor in his place.
True
False

17. Ace Construction Co. (Ace) contracts to build a retirement community on land owned by Smith. Jones, an adjoining landowner, expects the value of his land to increase greatly once the retirement community is built. Ace then breaches the contract to build the retirement community. In this case:
Jones can recover against the Ace as an intended beneficiary of its contract with Smith.
Jones can recover against Smith because a benefit accrued to him as a result of the the Smith-Ace contract
a and b are both true.
Jones is in privity of contract with Smith but not Ace
None of the above is true

18. Wanda buys a car on credit from Friendly Motors. Wanda assigns the car and her contract with Friendly Motors to Betty who agrees to make the balance of payments to Friendly Motors. In this case:
Wanda remains liable to Friendly Motors
Betty is also liable to Friendly Motors.
Wanda will be discharged of her contractual obligation to Friendly Motors once Betty makes the final payment to Friendly Motors.
The above facts do not suggest that a novation occurred
All of the above

19. Debbie contracts with Long Life Insurance Co., agreeing to pay premiums in return for which Long Life Co. agrees to pay $500,000 to Debbie’s husband Barry when Debbie dies. Barry is a:
Creditor beneficiary.
Donee beneficiary.
Incidental beneficiary.
Delegatee.
None of the above

20. A valid assignment always requires:
Consideration.
A writing.
A filing with a local court.
None of the above.

21. Davis forces Martin to contract with him by putting a gun to Martin’s head and threatening to pull the trigger if Martin does not sign. Davis then assigns the contract to Taylor. Taylor takes free of the duress claim Martin would have against Davis because of the importance our society attaches to the free transferability of contract rights.
True
False

22. The statute of frauds applies to all contracts of $500 or more.
True
False

23. The statute of frauds is a law that says contracts induced by fraud are voidable at the option of the defrauded party.
True
False

24. A wholly executory oral contract covered by the statute of frauds is unenforceable.  Assume that no facts exist that would allow a party to circumvent the statute of frauds.
True
False

25. A and B entered into a completely integrated written contract. Before the written contract was signed, A made an oral statement to B regarding the terms of the contract. This statement was not contained in the written contract. Under the parol evidence rule, evidence of A’s oral statement would be admissible if it were used to:
Contradict a term of the written contract.
Clarify an ambiguous term in the written contract.
Prove an additional term that is not in the written contract.
Change the terms of the written contract.

26. In order to satisfy the Statute of Frauds, the parties’ writing must:
Be signed by both parties.
Be notarized.
Be signed by the party to be charged or his agent.
Contain all the necessary contract terms in one document.
All of the above

27. Smith and Benson make an oral contract for the sale of some land at a price of $500,000. After paying Smith $400,000 of the purchase price, Benson takes possession of the land. One month later, Smith wants to boot Benson off the land. His argument is that the parties’ oral agreement is unenforceable under the Statute of Frauds. Which of the following is true?
Smith is correct, because the contract is for an amount greater than $500.
Smith is correct, because it is less than one year from the making of the contract.
Smith is correct, because this is an oral contract for the sale of real estate.
Smith is incorrect, because Benson paid part of the purchase price and took possession.

28. Bob and Alice make a contract that is covered by the Statute of Frauds. Now, Bob wants to get out of the contract on the basis that it is unenforceable under the Statute of Frauds. In response, Alice produces a writing that she says evidences the contract. In order for this writing to bind Bob, it must have been signed by:
Alice.
Bob.
Both Bob and Alice.
No writing is required.
None of the above

29. The Benson Ball Bearing Company orally agrees to sell 10,000 boxes of ball bearings to the Smith Motor Company at a rate of $1,000 per box, for a total of $100,000, and Smith orally agrees to pay that amount. Benson specially manufactures and delivers 5,000 boxes, but Smith refuses to pay, citing the Statute of Frauds. Here, Smith is obligated to pay:
Nothing because the contract violates the statute of frauds. – ? not certain may be exception under ucc
For the specially manufactured goods that were delivered but not for the ball bearings that were yet to be made.
The entire contract price regardless of the issue concerning the statute of frauds
None of the above.

30. The parol evidence rule does not block evidence of subsequent agreements that modify a completely integrated written contract.
True
False

31. Which of the following is true regarding the Statute of Frauds’ writing requirement?
The writing must be one document.
The writing must be signed by both parties.
The writing must be the contract itself.
The writing must indicate the parties’ identities.

32. With regard to a completely integrated contract, parol evidence can be used to:
Contradict the terms of the contract.
Explain ambiguities in the contract.
Supplement the terms of the contract.
Modify the terms of the contract.

33. The assignor impliedly warrants to the assignee that the obligor has capacity to contract.
True
False

34. Which of the following rights is least likely to be assignable?
A right to receive land.
A right to receive $10,000.
A right to have reconstructive facial surgery.
A right to receive 10,000 boxes of ball bearings.

35. A donee beneficiary of a contract can recover under that contract.
True
False

36. Performance under a contract must be within a reasonable time when:
Time is of the essence.
A specific time is stated in the contract.
A specific time is implied in the contract.
No time for performance is stated in the contract.

37. For which of the following contracts is a party’s subjective dissatisfaction sufficient to excuse his performance under a “personal satisfaction” clause in a contract?
A contract to construct an intercontinental ballistic missile.
A contract to paint someone’s portrait.
A contract to build a steam boiler.
A contract to rebuild an automobile engine.

38. Construction contracts typically are subject to a substantial performance standard.
True
False

39. Article 2 of the UCC has no parol evidence rule.
True
False

40. Joe promises to buy Jill’s house “provided that my horse wins the Kentucky Derby.” The horse winning the Derby is a condition precedent to Joe’s promise to buy the house.
True
False

41. Some courts allow promissory estoppel to bind parties to oral contracts that otherwise would be unenforceable under the statute of frauds.
True
False

42. This question concerns the statute of frauds provision for contracts that are impossible to perform within one year. In most states, which of the following is covered by this provision of the statute of frauds?
A unilateral contract.
A contract for an indefinite time period.
A contract to do something for the life of the promisee.
None of the above are covered by this provision of the statute of frauds.

43. In general, ambiguities in a written agreement are resolved against the party who drafted the agreement.
True
False

44. The Uniform Electronic Transactions Act (UETA), which has been adopted in several states,
Clarifies that a contract may not be denied legal effect or enforceability solely because an electronic transaction was used in its formation.
States that electronic transactions on subjects covered by the Statute of Frauds require an additional writing.
Invalidates agreements between parties to conduct transactions by electronic means.
None of the above.

45. In general, parties who sue for breach of contract cannot recover damages for purely speculative damages.
True
False

46. It is easier to satisfy the writing requirement imposed by the UCC’s statute of frauds provision than it is to satisfy the writing requirements most states impose on other contracts covered by the statute of frauds.
True
False

47. Which of the following duties is most likely to be delegable?
A duty to design a computer program for a business.
A duty to deliver goods to a manufacturer.
A duty to sell one’s entire output of a product.
A duty to play professional basketball in the National Basketball Assoc. (NBA).

48. Which of the following is covered by the Statute of Frauds?
A real estate mortgage.
A $300 contract for the sale of pencils.
A contract that can be performed within a week.
A $100 VCR repair.

49. A and B have made a contract with an enforceable liquidated damages provision that states that B’s recovery will be $10,000 in the event of A’s breach. A breaches the contract, and B loses $50,000 in consequential damages as a result. B’s recovery is limited to $10,000.
True
False

50. Specific performance is most likely to be awarded after breach of a contract:
For the sale of a computer.
To paint someone’s portrait.
To buy an antique chair.
For the sale of wheat.