ACCA
Corporate and Business Law
(LW)(GLO)
Course Examination 1
Questions
Time allowed 1 hour
TOTAL MARKS 50 marks
All questions are compulsory and MUST be attempted.
Instructions:
Please attempt this exam under test conditions.
DO NOT OPEN THIS EXAM UNTIL YOU ARE READY TO START UNDER
EXAMINATION CONDITIONS
For exams from 1 September 2019 to 31 August 2020
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Question 1
In the English legal system, what is the burden of proof in a civil law case?
A. Beyond reasonable doubt
B. Beyond all possibility
C. Balance of probability (1 mark)
Question 2
In the English common-law system, which of the following names is given to the rule of statutory
interpretation that states that words in a statute should be given their plain, ordinary meaning?
A. Contextual rule
B. Literal rule
C. Purposive rule (1 mark)
Question 3
Barriers to free international trade are often a source of dispute between nations.
Which type of barrier to free trade involves a total ban on imports from a particular country?
A. Import quota
B. Embargo
C. Import restrictions
D. Tariff (2 marks)
Question 4
The 1958 New York Convention is an important multi-lateral treaty where states agreed to recognise
written arbitration agreements and not submit such disputes to national courts.
Which of the following international organisations was involved in the development of the 1958 New
York Treaty?
A. International Court of Arbitration
B. European Court of Justice
C. World Trade Organisation
D. UNIDROIT (2 marks)
Question 5
Which of the following statements concerning the sphere of application of the UN Convention on
Contracts for the International Sale of Goods is correct?
A. For the Convention to apply to a state, the state must ratify the Convention in full
B. States may declare that certain parts of the Convention do not apply to it and declare that the
Convention does not apply to contracts between itself and particular other states
C. States may declare that certain parts of the Convention do not apply to it but must agree that
the Convention applies to contracts between itself and all other states (1 mark)
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Question 6
Which of the following correctly states the conformity requirements for goods sold under the UN
Convention on Contracts for the International Sale of Goods?
A. Fit for any purpose the buyer may put them to
B. Fit for the purpose that goods of the same description would ordinarily be used
C. Fit for the purpose that the goods could reasonably be put to (1 mark)
Question 7
Which of the following parties would issue a bill of lading?
A. Seller
B. Carrier
C. Shipper (1 mark)
Question 8
Which of the following is a type of bill of lading?
A. Negotiable bill of lading
B. Endorsed bill of lading
C. Revolving bill of lading (1 mark)
Question 9
Under the UN Model Law on International Credit Transfers, which of the following is an obligation of
the sender?
A. To pay the receiving bank for the payment order when the receiving bank accepts it
B. To ensure funds are available for the sending bank to make payment to the receiving bank
C. To agree with the beneficiary the date that the credit transfer to take place (1 mark)
Question 10
Under the UN Convention on International Bills of Exchange and International Promissory Notes,
what is the name of the process whereby a bill of exchange may be presented for payment by a
different party than the one originally intended?
A. Transfer
B. Endorsement
C. Negotiation (1 mark)
Question 11
Which of the following instruments used in international business transactions is most appropriate to
use where there is a high level of risk to the seller that they won't be paid by the buyer?
A. Letter of comfort
B. Bank transfer
C. Letter of credit
D. Bill of exchange (2 marks)
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Question 12
Which TWO of the following parties are involved in an international bank transfer?
A. Originator
B. Beneficiary
C. Payee
D. Drawee (2 marks)
Question 13
A bill of lading is a document used in the transport of goods that performs a number of roles.
Which is NOT a role of a bill of lading?
A. Provides evidence that the goods have been received by the carrier
B. Provides evidence that Incoterms have been complied with
C. Provides evidence of or contains the contract of carriage
D. Acts as a document of title to the goods being shipped (2 marks)
Question 14
In a credit transfer made under the UN Model Law on International Credit Transfers, if there is a delay
at any stage, which of the following is true?
A. The transfer is cancelled and must commence again
B. The bank causing the delay is liable to pay interest only
C. The transfer must continue at the earliest possible time and no bank is held liable
D. The bank causing the delay is liable to pay interest and damages (2 marks)
Question 15
Under the UN Convention on International Bills of Exchange and International Promissory Notes,
what is the person who is making the payment known as?
A. Drawee
B. Drawer
C. Payee
D. Acceptor (2 marks)
Question 16
Under the UN Convention on International Bills of Exchange and International Promissory Notes, a
party may agree to take responsibility for ensuring a bill of exchange is paid.
What is the name given to such a party?
A. Acceptor
B. Payee
C. Guarantor
D. Drawee (2 marks)
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Question 17
Which of the following statements relate to letters of credit or letters of comfort?
Letters of credit Letters of
comfort
This letter is issued by a bank
This letter is issued by a parent company
(2 marks)
Question 18
The purpose of an agency relationship is to form a business contract between which of the following
parties?
A. Agent and principal
B. Agent and third party
C. Principal and third party (1 mark)
Question 19
When combined, which types of agent authority are known as an agent's actual authority?
A. Express and implied authority
B. Implied and ostensible authority
C. Express and apparent authority (1 mark)
Question 20
'Holding out' is a key element of which form of agency?
A. Agency by implied agreement
B. Agency by estoppel
C. Agency by necessity (1 mark)
Question 21
Unless circumstances indicate otherwise, which parties may enforce a contract properly formed under
an agency agreement?
A. Agent and principal
B. Principal and third party
C. Third party and agent (1 mark)
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Question 22
In agency law, which of the following statements relates to agency by estoppel and which relates to
agency by necessity?
Agency by Agency by
estoppel necessity
There is no agency agreement but the principal states publicly
that a person is their agent
There is no agency agreement but the principal looks after
another person's property when they cannot be contacted
(2 marks)
Question 23
Which of the following statements relates to an agent's implied authority and which relates to their
ostensible (apparent) authority?
Implied authority Ostensible
(apparent)
authority
The authority that it is usual or customary for the agent to have
in the circumstances
The agent's authority that the principal discloses publicly
(2 marks)
Question 24
In an emergency situation, a person may need to take control of another party's goods and deal with
them appropriately.
What type of agency is this known as?
A. Agency by implied agreement
B. Agency by estoppel
C. Agency by ratification
D. Agency by necessity (2 marks)
Question 25
Which of the following statements regarding partnerships is correct?
A. A partnership must exist for more than a single business transaction
B. The business must be profitable
C. A partner can be an individual living person or a registered company (1 mark)
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Question 26
A partner's actual authority to bind the partnership in a contract is determined by which of the
following?
A. The perception third parties have of the purpose of the partnership
B. What is agreed between the partners
C. The actual purpose of the partnership (1 mark)
Question 27
Which of the following describes the liability of new partners for partnership debts?
A. New partners are liable for all partnership debts
B. New partners are only liable for partnership debts in existence when they became a partner
C. New partners are only liable for partnership debts that occur after they become a partner
(1 mark)
Question 28
Under the Partnership Act 1890, which of the following events will cause a partnership to be
terminated?
A. Loss of 50% of the partnership's capital
B. The partnership incurring losses for three consecutive years
C. Bankruptcy of a partner (1 mark)
Question 29
Which TWO of the following have priority over the others for payment when a partnership is
terminated?
A. External debts
B. Loans from partners
C. Partners' capital contributions
D. Partners' share of profit (2 marks)
Question 30
Which TWO of the following statements concerning traditional partnerships are correct?
A. Partnerships may grant fixed charges over partnership property but not floating charges
B. Partners are jointly liable for debts incurred by the firm
C. Partnership accounts must be submitted to the Registrar of Companies every year
D. Partnerships are liable to pay corporation tax (2 marks)
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Question 31
Which of the following statements concerning retiring partners is correct?
A. Retiring partners are not liable for any partnership debts after they leave
B. Retiring partners are liable only for existing partnership debts when they leave, unless third
parties are notified that they have retired
C. Retiring partners are responsible for existing partnerships debts when they leave and
partnership debts incurred after their retirement, unless third parties are notified of their
retirement
D. Retiring partners are liable for existing partnership debts after they leave (2 marks)
Question 32
When an unlimited liability partnership is terminated, which of the following is paid off last out of funds
realised from the partnership assets?
A. Partners' share of partnership profits
B. Partners' capital contribution
C. Partnership loans
D. External debts (2 marks)
Question 33
Under the Partnership Act 1890, which TWO of the following events will terminate an unlimited liability
partnership?
(1) Notice by a partner
(2) The end of an agreed fixed period of time for the partnership
(3) Absence of a partner
(4) Disagreement between the partners
A. 1 and 2
B. 1 and 3
C. 2 and 3
D. 3 and 4 (2 marks)
(Total = 50 marks)
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CORPORATE AND BUSINESS LAW (GLO)
COURSE EXAM 1
ANSWER SHEET
Question Options (circle one option only)
1 A B C
2 A B C
3 A B C D
4 A B C D
5 A B C
6 A B C
7 A B C
8 A B C
9 A B C
10 A B C
11 A B C D
12 A B C D
13 A B C D
14 A B C D
15 A B C D
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16 A B C D
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18 A B C
19 A B C
20 A B C
21 A B C
22
23
24 A B C D
25 A B C
26 A B C
27 A B C
28 A B C
29 A B C D
30 A B C D
31 A B C D
32 A B C D
33 A B C D
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Student self-assessment
Having completed this exam, take a few minutes to consider what you did well and what you found difficult.
Use this as a basis to focus your future study on effectively improving your performance.
Common problems Future emphasis if you answer Yes
Timing and planning
Did you finish too early? Y/N Go back and check your answers.
Did you overrun? Y/N Focus on allocating your time better.
Practise questions under strict timed conditions.
If you get behind, move on to the next question.
Content
Did you struggle with:
Interpreting the questions? Y/N Learn subject jargon (interactive text index).
Read questions carefully noting all the parts.
Practise as many questions as possible.
Understanding the subject? Y/N Review your notes/text.
Work through easier examples first.
Remembering the notes/text? Y/N Quiz yourself constantly as you study. You need to develop
your memory as well as your understanding of a subject.
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