D216 Unit 2 Walk-Thru Guide, Lecture notes of Business Accounting

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2025/2026

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D216
Walk-Thru Guide for Units 2 (Legal
Environment in Business)
Directions:
1) The following questions are NOT practice exam questions. Instead, they are
specifically designed to be completed open book as you are reading through
the online textbook material.
2) Read page by page through the Unit without skipping around. The questions
will flow right in order as you read page by page through the Units.
3) Make sure you answer the questions very thoroughly. By doing this, you will
have a very robust review guide for the Units when you are finished.
1) Define “ethics”
2) List the 4 sources of American Law
3) What is the US Constitution according to Article VI?
4) What does the 10th Amendment do?
5) What happens if a State Constitution says something that conflicts with the
US Constitution? Who wins out?
6) Statutory laws are enacted by what kinds of bodies at any level of
government? What would happen if a statutory law was determined to be in
conflict with the US Constitution – who would win out?
Note: The Federal government’s legislative body is called “Congress”
Note: Additionally, each individual state has its own legislative body called
the “State Legislature”
Note: Smaller levels of government (Counties, Cities, Towns, Villages) can
pass statutory laws for their regions. These are called “ordinances”.
7) What would happen to a town ordinance created somewhere in a town in
Nebraska, if it was determined to be in conflict with the Nebraska State
Constitution or the US Constitution?
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D

Walk-Thru Guide for Units 2 (Legal

Environment in Business)

Directions:

1) The following questions are NOT practice exam questions. Instead, they are

specifically designed to be completed open book as you are reading through

the online textbook material.

2) Read page by page through the Unit without skipping around. The questions

will flow right in order as you read page by page through the Units.

3) Make sure you answer the questions very thoroughly. By doing this, you will

have a very robust review guide for the Units when you are finished.

  1. Define “ethics”
  2. List the 4 sources of American Law
  3. What is the US Constitution according to Article VI?
  4. What does the 10th^ Amendment do?
  5. What happens if a State Constitution says something that conflicts with the US Constitution? Who wins out?
  6. Statutory laws are enacted by what kinds of bodies at any level of government? What would happen if a statutory law was determined to be in conflict with the US Constitution – who would win out? Note: The Federal government’s legislative body is called “Congress” Note: Additionally, each individual state has its own legislative body called the “State Legislature” Note: Smaller levels of government (Counties, Cities, Towns, Villages) can pass statutory laws for their regions. These are called “ordinances”.
  7. What would happen to a town ordinance created somewhere in a town in Nebraska, if it was determined to be in conflict with the Nebraska State Constitution or the US Constitution?
  1. What are Uniform Laws?
  2. What is the Uniform Commercial Code?
  3. What is Administrative Law and who creates Administrative Laws? Note: Examples of Federal Agencies would be the IRS or the FAA (Federal Aviation Administration). Another example would be the EPA (Environmental Protection Agency) Note: Examples of NY State Agencies would be the state’s DMV (Department of Motor Vehicles), or the NY Bridge and Tunnel Authority
  4. What happens if an administrative law is determined to be in conflict with the US Constitution?
  5. What is Case Law? How is it created?
  6. What is Common Law? Who created it?
  7. What is monetary damages? Note: Monetary damage is a type of “remedy”. I punch you in the nose. You sue me and win $5,000. This is an example of monetary damage. The $ is to remedy you for the punch.
  8. Equitable remedies are remedies that do not involve money. They involve ACTION instead of money. Note: Suppose I punch you in the note. You do not want money. Instead you want a written apology from me. Would this be a monetary remedy or an equitable remedy that you are looking for?
  9. What is the doctrine of laches designed to do?
  10. Explain what precedent is?
  11. Suppose you are raising 2 kids in your house. Give an example of how you might use precedent in your parenting to help raise the kids in a stable, reliable household. Notice how precedence helps create a stable society where people can rely on past decisions as an indication for how things will be currently decided when a dispute arises. This helps society from becoming an erratic and unpredictable place.
  12. The concept of stare decisis has two key aspects. Please list them.
  1. What does the Full Faith and Credit Clause say?
  2. What are the 3 branches of government in the USA?
  3. Briefly state what each of the 3 branches does.
  4. The commerce clause prevents states from doing what?
  5. What does the Supremacy Clause say?
  6. What gives the federal government the right to tax your paycheck and spend the money?
  7. What is the Bill of Rights designed to do?
  8. How does the 14h Amendment limit state government action?
  9. What are content neutral laws with respect to free speech? Are these laws allowed?
  10. What about laws the restrict the content of speech? Under what circumstances are such laws allowed?
  11. Is political speech by corporations protected under the 1st^ Amendment?
  12. What are the rules with respect to commercial speech by corporations? What are the 3 criteria that make it ok for the government to restrict commercial speech by corporations?
  13. What are the rules with respect to threatening speech?
  14. What are the rules with respect to obscene speech?
  15. What does the Establishment Clause say?
  16. What does the Free Exercise Clause say?
  17. What does the 4th^ amendment say about searches and seizures?
  18. What does Procedural Due Process require the government to do if the government takes action that deprives someone of life, liberty, or property?
  19. What does Substantive Due Process require the government to do when it comes to “Fundamental Rights”?
  20. What does the Equal Protection Clause do?
  1. If the government takes action that does not treat people equally, the law is invalid unless it can pass a test. There are 3 tests that the courts have come up with. The test that is used depends on the situation at hand. What is the Strict Scrutiny Test, and when it is it used? What is the Intermediate Scrutiny Test and when it is used? What is the Rational Basis Test and when is it used? Unit 2: Legal Environment in Business
  2. Ethics is the study of what?
  3. What is the Sarbanes-Oxley Act designed to do?
  4. Briefly explain the idea of the “Moral Minimum”.
  5. What are Industry Ethical Codes?
  6. The Profit Maximization Theory says that businesses should maximize what?
  7. In recent times businesses are now viewed as “corporate citizens”. What does this mean?
  8. What 4 things should a business evaluate when making a decision?
  9. Why is the attitude of top management important in corporate ethics?
  10. How do unrealistic goals impact ethics at an organization?
  11. What is ethical reasoning?
  12. What is duty based ethics?
  13. People who adhere to a principle of rights theory, believe what?
  14. According to Utilitarianism, when we are faced with an ethical dilemma we should do what will produce the greatest good for the greatest number of people. This involves making a Cost-Benefit Analysis. What are the 3 steps of this analysis?
  15. What is Corporate Social Responsibility (CSR)?
  16. What is Short Term Profit Maximization?