[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[MommyBear]

Good idea Zubair. If my time zone calculations are correct you should be able to get 6.5 hours of sleep if you go to bed right now. Do it!!!

[Anonymous]

@Mommy – I missed that one on my practice test because I read it wrong as well.

[Anonymous]

@zubairs – Sleep is so critical for this exam (at least, it helps me)!

[MommyBear]

5-A

[Anonymous]

4 – D Neither

[MommyBear]

4 is B

This question requires a careful reading of the possible answers. At first glance, item I appears reasonable, except for the answer's “requirement” of the instrument being signed by both the drawer and the drawee. Because only the drawer must sign the instrument, item I drops from possible consideration. Notice, however, that the remainder of the conditions in item I are correct in the definition of a negotiable instrument.

In item II, the remaining definitional elements of negotiability are met, and since this answer has no conflicting elements, it is the preferred answer.

In general, a negotiable instrument requires the instrument or document to be signed by the drawer, contain an unconditional promise or order to pay, must be a fixed (or determinable) amount of money, and it must be payable either to the order of, or to the bearer.

[Anonymous]

5 is B – I answered the same thing on my test (A), The test bank states – Usually a unilateral mistake cannot be rescinded. To have the right to rescind, the other side must have actually known of the error, or the error must be so large that the other side should reasonably have known of the error. Clearly, an error of nearly $100,000 should have been detected by the buyer, and so this contract may be rescinded.

[MommyBear]

OK. I hate blaw just in case you were wondering. 🙂

[Anonymous]

I completely agree. One little word makes the answer something totally different. Stupid lawyers.

[MommyBear]

6–To establish a cause of action based on strict liability in tort for personal injuries resulting from using a defective product, one of the elements the plaintiff must prove is that the seller (defendant):

A. failed to exercise due care.

B. was in privity of contract with the plaintiff.

C. defectively designed the product.

D. was engaged in the business of selling the product.

[Anonymous]

7–Parc hired Glaze to remodel and furnish an office suite. Glaze submitted plans that Parc approved. After completing all the necessary construction and painting, Glaze purchased minor accessories that Parc rejected because they did not conform to the plans. Parc refused to allow Glaze to complete the project and refused to pay Glaze any part of the contract price. Glaze sued for the value of the work performed. Which of the following statements is correct?

A. Glaze will lose because Glaze breached the contract by not completing performance.

B. Glaze will win because Glaze substantially performed, and Parc prevented complete performance.

C. Glaze will lose because Glaze materially breached the contract by buying the accessories.

D. Glaze will win because Parc committed anticipatory breach.

[Anonymous]

6 – is that D? Is strict liability where they get held liable regardless of if the person negligently hurt themselves using their product?

[MommyBear]

Unfortunately I moved on before I copied the explanation, but yes the answer is D. I believe you are right about the other stuff too.

[MommyBear]

7-B

[MommyBear]

8-Under the U.C.C. Investment Securities Article, a restriction on the transfer of corporate stock will only be valid against a transferee if the restriction is:

A. contained in a stockholders' agreement.

B. stated on the face of the stock certificate.

C. placed on publicly traded stock.

D. part of a buy-sell contract.

[Author]

Replies