N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
chapter 9—insight into ethics:
Can a company that sponsors a contest change the prize from what it originally offered?
1. Arnold enters a Bunco tournament hosted by Bunco Players Association (BPA). During the event, Arnold signs an agreement that stipulates BPA will pay all of the winner’s fees and expenses to attend the Bunco World Games, but if the winner does not attend, he or she agrees to repay the funds. Arnold wins and BPA pays his expenses, but he does not go to the World Games. In BPA’s suit to recover the expended funds, a court is most likely to rule that the agreement is
a. an invalid modification of the tournament contract between Arnold and BPA.
b. binding to the extent that the parties “split the difference.”
c. not binding because it was signed “during the event.”
d. binding and Arnold must repay the funds.
ANSWER: D PAGES: Section 2 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
chapter 10—insight into social media:
“catfishing”: Is that online “Friend” who you think it is?
2. Evita pretends to be “Faith” online, fooling Garth into believing that Faith is his friend. When Garth learns the truth, he is embarrassed and feels humiliated. But he cannot recover damages because he cannot prove an actual injury, which is a requirement for recovery in these circumstances on the ground of
a. mistake.
b. fraudulent misrepresentation.
c. undue influence
d. unconscionability.
ANSWER: B PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
chapter 11—insight into e-commerce: taxing web purchases
3. Fleet Feet, an online travel company, buys blocks of rooms from Grande Hotel, a hotel in Harbor City, at a wholesale rate. Fleet Feet resells the rooms to consumers at a retail rate. One recent effort by cities to collect taxes from e-commerce has focused on
a. hotels that sell blocks of rooms at wholesale rates.
b. non-resident consumers who reserve rooms in in-state hotels.
c. online travel companies.
d. the dire financial straits of the cities during the latest recession.
ANSWER: C PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal
chapter 13—Insight into ethics:
Warning labels for video games
4. North Carolina enacts a statute that requires a label on a video game to warn parents when “the range of options available to a player include dismembering or sexually assaulting the image of a human being.” In a challenge to the statute by game makers, the state asks a federal court to enforce the statute. The state fails to show that the statute is justified by a compelling government interest or that it is narrowly tailored to serve that interest. The court is most likely to
a. hold that the statute is unconstitutional and refuse to enforce it.
b. expand the label’s warning to include other forms of violence.
c. impose market-share liability on makers of violent video games.
d. replace the voluntary rating system currently in use.
chapter 14—insight into the global environment: is it legal to resell textbooks purchased abroad?
5. Nguyen has her family buy and ship textbooks legally produced in Vietnam to her for resale in the United States. The U.S. owners of the copyrights on the items file a suit against Nguyen, alleging infringement. Applying a decision of the United State Supreme Court in a similar case,
