1 of 10 - Johanna is selling her restaurant, J's Café. She has decided restaurant hours are too long for her and is changing careers. Matt, a licensee, is assisting Johanna in the sale of the café. She wants to sell both the real property, the restaurant itself, and all of the personal property inside to one buyer. A buyer is interested in the physical restaurant, the business itself, and all of the personal property inside the restaurant. How will Matt handle the sale of both the real property and the business itself?
Matt, as a licensee, is not authorized to conduct the sale of a business. He may assist Johanna in the real property transaction, but not the personal property that represents the business.
Matt must treat the sale of the business and the sale of the real property as two separate and concurrent transactions with two concurrent and contingent escrows.
Matt may sell the entire business opportunity in one sales transaction. Due to its encompassing the real property, the business, and the personal property of the restaurant, it is a single sale.
None of the above
You answered incorrectly
If both personal and real property are involved in the sale of a business, the agent usually treats the sale of the business and sale of the land/building as two separate and concurrent transactions with two concurrent and contingent escrows. A bill of sale would be used for the passing of personal property while a deed would be used for the passing of the real property/land.
2 of 10 - The Hannekes are selling their pharmacy to a small investor. They have decided not to follow the regulations set forth by the bulk sale law. Is the sale considered valid between the two parties?
The sale is considered valid between the two parties; it is void against creditors; they are legally permitted to attach inventory for any debt.
The sale is considered invalid between the two parties due to not following the regulations set forth by the bulk sale law.
The sale is considered valid between the two parties and all creditors. The bulk sale law is set up to ease the transfer of inventory in a business sale.
None of the above
You answered correctly
3 of 10 - Which of the following statements is false in reference to a balance sheet?
The balance sheet shows the business's profits for the last 3 years.
The balance sheet shows the assets of a business as of a particular date.
The balance sheet shows the net worth of a business as of a particular date.
The balance sheet shows the business's liabilities as of a certain date.
You answered correctly
4 of 10 - Public notice must be given of a bulk transfer of inventory in a business sale. What is this notice known as and where must the notice be published?
The public notice is known as Notice of Intent to Transfer Inventory and must be published in a general circulation newspaper.
The public notice is known as Notice of Intent to Sell and must be published in a trade newspaper.
The public notice is known as Notice of Intent to Sell Bulk and must be published in a general circulation newspaper.
The public notice is known as Notice of Intent to Sell Bulk and must be published in a trade newspaper.
You answered correctly
5 of 10 - Maria and Carlos are selling their grocery store to a large corporation. There will be a bulk transfer of the store's inventory in the sale to the corporation. Public notice must be given of this transfer. Who must give the public notice? How many days public notice must they give and why?
The sellers must give the public notice. They must give a public notice 12 business days before the transfer occurs. It gives the buyers’ creditors an opportunity to file a claim if trade credit is still owed on the inventory.
The buyers must give the public notice. They must give a public notice 12 business days before the transfer occurs. It gives the seller's creditors an opportunity to file a claim if trade credit is still owed on the inventory.
The buyers must give the public notice. They must give a public notice 15 days before the transfer occurs. It gives the seller's creditors an opportunity to file a claim if trade credit is still owed on the inventory.
The buyers must give the public notice. They must give a public notice 10 business days before the transfer occurs. It gives the seller's creditors an opportunity to file a claim if trade credit is still owed on the inventory.
You answered incorrectly
When a business opportunity that involves inventory is being sold, a bulk transfer handles the inventory not sold to customers. In this case, the buyer must give public notice 12 business days before the transfer occurs to let the seller's creditors file a claim if trade credit is still owed on the inventory.
6 of 10 - Martin is purchasing a personnel agency from Warren and his partner. The agency has been very successful over its twenty years in business, and Warren is ready to retire. What elements should Martin expect from Warren as part of the business sale?
A bill of sale and specific financial statements.
A bill of sale and a bulk transfer of any inventory.
A bill of sale; a balance sheet; the profit and loss statement; and a bulk transfer of any inventory.
None of the above
You answered correctly
7 of 10 - What does the term "turnover" reference in a business opportunity?
The amount of employees being employed and leaving employment of a business.
The number of times the inventory is sold per year.
The number of times a business has been sold.
None of the above
You answered incorrectly
Turnover is the business opportunity term that means the number of times the inventory is sold per year.
8 of 10 - How is goodwill protected in business opportunity transactions?
Goodwill is not tangible property and, therefore, cannot be protected.
The goodwill of a business has monetary value, which is protected by law.
Goodwill is the expectation of continued public patronage.
Goodwill is protected by Sherman Anti-trust laws.
You answered correctly
9 of 10 - Damon has a string of misdemeanor convictions. He was just cleared of felony fraud. Damon is now opening a restaurant and wants to serve alcohol. What are Damon's chances of being issued a liquor license?
Not very good at all. According to the Alcoholic Beverage Control Act, the person must be of good moral character. All of Damon's convictions probably won't bode well with his receiving a license.
The same as others. Damon only has misdemeanor convictions. He was acquitted of the felony charge.
Damon may be issued a probationary liquor license due to his previous convictions.
None of the above
You answered incorrectly
The sale of a liquor license is regulated by the Alcoholic Beverage Control Act which states a person must be of good moral character. An applicant with several criminal convictions would most likely not be considered to be of good moral character.
10 of 10 - Tucker, a licensee, has been instrumental in the sale of a nightclub to a group of investors. He has guided the buyers every step of the way in obtaining this new business opportunity. What government agencies are also in need of notification by the investors concerning their new business?
