Written Practice Accounting Exam 4 Flashcards

Chapters, 11, 12, 13, 14, and 15

Real Property: (Permanent)

Land and Buildings that are stuck in place

Personal Property: (Moveable)

Anything moveable or not physical you can carry, sell, or transfer.

Fixtures: (Fixed forever)

Attached to the building, stays with the property.

Trade Fixture: (Taken by the tenant)

Business items you can usually take back when you leave.

Devise:

Transfer of real property through a will.

Convey: (Carry over)

To transfer property from one person to another.

Grantor: (Gives or transfers OUT)

The person giving/selling the property.

Grantee: (Gets the property)

The person receiving/buying it.

Legal Title: (Legit owner on paper. )

The person recognized by law as the owner.

Equitable Title:

You get the benefits, but not full legal ownership yet.

Rules Against Perpetuities:

(No control from the grave forever.)

You can’t control property forever into the distant future.

State Law:

Property laws depend on the state you’re in.

Bill of Sale:

Written proof of transfer of personal property.

Deed:

(The legal paper that transfers real property.)

Deal in Writing

Title Insurance:

(Protects against problems with the property title.)

Protects your Ownership

Fee Simple Ownership:

Full forever ownership, and you own it completely.

Life Estate: (Yours for life only)

You can use it, but it ends when you die

Leasehold Estate:

(Temporary right to use property)

You’re renting it

Absolute Ownership: (100% total control)

Full ownership with no limits

Trust: (Someone holds it for you)

One person holds property for another’s benefit.

Quitclaim Deed:

(Transfers whatever interest someone might have no guarantees.)

I’m not promising anything

Warranty Deed:

(Seller guarantees clear title)

I guarantee it’s mine

Special Warranty Deed:

(Guarantees no problems during sellers ownership only)

Safe only while I had it

Easement:

(Limited use like driveway access)

Right to use someone else’s land

License:

(Permission, not ownership)

Temporary, can be taken back at anytime

Covenant: (Promise rule)

Promise in a deed or contract about land use.

Real Covenant:

(Runs with the land)

Follows property even when sold.

Zoning:

(Rules for land use; residental, commerical, etc)

What can go where

Variance:

(Permission to break zoning rules.)

Vary from the rule, special exception.

Eminent Domain:

(Government can take private land with compensation)

Government takes for public use

Tenancy in Common:

(No automatic inheritance)

NOT automatic takeover when someone dies

Joint Tenancy with Right of Survivorship:

(Last one standing owns it all)

Surviving owner gets everything

Tenancy by the Entirety:

(One unit, strong protection)

Married couple owns as one.

Tenancy for Years:

(Ends Automatically, no notice required.)

Starts and ends on set dates.

Periodic Tenancy:

Keeps repeating → requires notice

Landlord:

Owns property and rents it out

Tenant:

(Takes temporary use.)

Rents and uses property

Implied Warranty of Habitability:

(It has to be livable, no matter what.)

Safe to live in

Tenant Duties:

(Tenant takes care of the place.)

Keep place clean, pay rent, don’t damage.

Fair Housing Act:

(No discrimination)

You can’t refuse housing based on protected classes.

Rule of Capture:

(Whoever extracts groundwater, owns it.)

Pump it, it’s yours

Percolating Water:

(Underground seep water)

Water moving slowly underground, not in streams.

Absolute Ownership:

(Landowner controls water under their land.)

My land → my water

Reasonable Use Standard:

(Don’t be greedy.)

Can use water if it doesn’t harm others.

Correlative Water/Rights Doctrine:

(People sharing the same underground water must share it fairly.)

Share the same water fairly

Prior Appropriation Doctrine:

(First in time = first in water.)

First person gets priority

Surface Water:

(Rain/runoff on top)

Water on land surface

Common Enemy Doctrine:

(Landowners can divert surface water freely)

Water is the enemy → get rid of it

Natural Servitude Doctrine:

(Water naturally flows downhill; lower land must accept it.)

Lower land serves upper land

Stream & Lake Water:

(Governed by rights → not ownership like groundwater.)

Shared water source

Mislaid Property:

(Owner likely meant to return for it.)

Placed somewhere then forgotten

Lost Property:

(Owner doesn’t know where it is.)

Dropped accidently

Abandoned Property:

(Owner gave up rights)

Left on Purpose

Found Property:

(Finders may have rights depnding on type)

Someone discovered it

Adverse Possession:

Use it long enough → you can own it

Actual Entry & Exclusive Possession:

(Must physically possess and exclude others.)

You actually go in and act like a owner

Open & Notorious Possession:

(Not hiding possession)

Everyone can see you’re there.

Adverse or Hostile Possession:

(Against the owner’s rights.)

Without permission

Continuous Possession:

(Uninterrupted time and kept using it the whole times without long breaks.)

No stopping, keep using it

3 Requirements for a Gift:

(I meant it, I gave it, they took it.)

D- Donate

I- Intent to give it now

L- Delivery

Testamentary Gift:

(After death (will)→ takes effect after death)

Gifts given through a will

Gift Inter Vivos:

(Between the living)

Gifts made while alive

Gift Causa Mortis:

(Because of death fear, can be revoked if you survive.)

Gifts made in anticipation of death

Bailment:

(Temporary transfer of real property)

I give you my stuff, you give it back.

Bailor:

(Owner)

Gives goods

Bailee:

(Takes care of goods)

Temporary holder

3 Elements of Bailment:

Give, Take, and Return

Duty of Care (Bailee):

Take care like it’s yours

Bailee Rights:

Holds it, may use it, may hold it until paid.

Bailee Duties:

Protect, return, and follow instructions

Bailor Duties:

Be honest, pay up, and give safe stuff

Common Carrier:

(Must serve public)

Carries for anyone

Private Carrier:

Chooses who to serve

Contract Carrier:

Pre-agreed transport contract.

Innkeeper:

Hotel must protect guests

Federal Trade Commission (FTC):

Fair trade & ads police

Federal Communications Commissions (FCC):

Controls TV, radio and internet.

Food & Drug Administration (FDA):

Food & medicine safety.

Fraud Misrepresentation:

(Intentional lie)

Lies that cause harm

Intentional Misrepresentation:

Lying on purpose.

Negligent Misrepresentation:

(Careless lie)

Careless wrong info

Caveat Emptor:

Buyer Beware

Puffery:

(Best product ever!)

Exaggerated opinion→ not a fact.

Deceptive Advertising:

False or misleading claims.

Unfair Advertising:

Harmful or unethical marketing

False Advertising: (Illegal)

Lies in ads

Prohibited Advertising:

Ads the laws bans

Obscene Material:

Sexual, offensive, no value

Obscene Advertising:

Obscene used to sell

Indecent Material:

Inappropriate but not illegal obscene

Profane Language:

Swearing

Miller Test:

S = Sexual content

L = Lacks serious value

M = Measured by community standards

As-Is Clause:

You take it how it is

Required Disclosure:

Tell the truth before sale

Labeling and Packaging Laws:

Tell what it is, and what’s in it

Fair Packaging and Labeling Act:

Honest labels on packaging

Nutrition Labeling & Education Act:

Food facts must be shown

Nutrition Content Claims:

Low fat/ high fiber claims must be true

Direct Marketing:

Sell straight to consumer

Telemarketing:

Phone sales