ACCA LW Corporate and Business Law: mock exams and practice questions

Sample question 1 · A · Essential elements of the legal system

Which of the following is a feature of civil proceedings rather than criminal proceedings?

1. A The case is normally brought by the state on behalf of the public
2. B The claimant must prove its case on the balance of probabilities
3. C The main purpose of the proceedings is to punish the wrongdoer
4. D Liability must be proved beyond reasonable doubt

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Answer: B. Civil law governs relations between private persons (individuals and organisations). The injured party (the claimant) brings the action and must prove it on the balance of probabilities, and the usual outcome is a remedy such as damages. Criminal law is enforced by the state, the prosecution must prove guilt beyond reasonable doubt, and the aim is punishment.

Sample question 2 · B · International business transactions

The seller and the buyer in each of the following contracts have their places of business in different Contracting States to the UN Convention on Contracts for the International Sale of Goods (CISG). Which contract is OUTSIDE the scope of the Convention?

1. A The sale of industrial packing machines to a food manufacturer
2. B The sale of 4,000 cases of wine to a chain of restaurants
3. C The sale of engine parts that the seller will manufacture from its own materials
4. D The sale of a used passenger aircraft to an airline

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Answer: D. The CISG applies to contracts for the sale of goods between parties whose places of business are in different States (where those States are Contracting States, or where private international law leads to the law of a Contracting State). It excludes certain sales, including goods bought for personal, family or household use (unless the seller did not know and ought not to have known this), sales by auction or on execution, stocks, shares and money, ships, vessels, hovercraft and aircraft, and electricity. Goods to be manufactured count as sales unless the buyer supplies a substantial part of the materials or the contract is mainly for labour or services.

Sample question 3 · C · Transportation and payment in international trade

Which of the following describes a debit transfer?

1. A A payment that the payer initiates by instructing its own bank to send funds to the payee's bank
2. B A bank's written undertaking to pay a seller when documents complying with stated terms are presented
3. C A payment that the payee initiates through its bank, under the payer's prior authority, to collect funds from the payer's account
4. D A written order from one person to another to pay a fixed sum to a named person on a future date

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Answer: C. Bank transfers move funds between accounts without cash. In a credit transfer the payer instructs its own bank to transfer funds to the payee (the payment is 'pushed'); this is the type governed by the UNCITRAL Model Law on International Credit Transfers. In a debit transfer the payee instructs its bank to collect funds from the payer's account, relying on authority previously given by the payer (the payment is 'pulled'), as with a direct debit.