Humber College PREX-1060A Exam : Exam 4: Invigilated Theory Exam

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Humber College PREX-1060A Exam Syllabus Topics:

Humber College Exam 4: Invigilated Theory Sample Questions:

1. A salesperson and their commercial seller client are discussing and preparing to list the seller's office building. The topic of defects comes up and the seller wants to know what the salesperson will have to disclose. Which of the following is an accurate statement regarding the disclosure of defects?

A) The salesperson should not disclose material latent defects that are known to the seller that could reduce the price or the marketability of the property.
B) The salesperson should discuss patent defects known to the seller of the office building with the seller and disclose them to a buyer.
C) The salesperson should discuss latent defects known to the seller of the office building with the seller and disclose them to a buyer.
D) The salesperson should not disclose latent defects that are known to the seller as they could affect the seller's ability to obtain a high price for the property.

2. A salesperson is preparing to list an industrial building and wants to assess the availability and size of utilities, as these factors may prohibit a change in use for the potential buyer. Which of the following is correct?

A) The salesperson should conduct a visual inspection of the building to determine the specifications of the utilities.
B) The seller may have up-to-date documentation about the utilities but, in some situations, a third-party professional assessment is still needed.
C) If the information on the subject building's utilities is available, then a potential buyer will not put a condition in the offer.
D) If the information on the building's utilities is not available, the salesperson can determine it by finding out the specifications of the utilities of the neighbors.

3. There are three primary items that require attention when countering an offer from a seller. Which of the following items does NOT need to be checked?

A) The irrevocability clause
B) The date of the agreement of purchase and sale
C) The balance due clause
D) The purchase price

4. Asset sale and share sale are two different ways to sell a business. Which statement describes an asset sale?

A) The buyer assumes all assets and accepts all liabilities of the business.
B) The buyer is eligible for tax deductions and benefits by claiming capital cost allowance on depreciable property.
C) The seller benefits from a tax standpoint since any gain to the seller on the sale will be considered under the capital gains tax exemption.
D) The buyer replaces the seller as the owner of the corporation.

5. Finish the sentence: The Employment Standards Act:

A) Regulates matters involving ownership of a business.
B) Regulates trade names.
C) Specifies the terms of a business partnership agreement.
D) Protects the rights of workers of a business that is being sold.

Solutions: