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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A new commercial condominium project is completed, and the buyers are given an occupancy date. On the occupancy date, a few of the buyers move into their units and begin setting up their operations. That evening, there is a severe thunderstorm. In the morning, several of the buyers start to notice roof leaks. Some of the buyers call the builder's office while others call their salespersons.Which of the following is an accurate statement regarding the building's warranty coverage?

A) The buyers should submit their concerns to the provincial warranty authority, as they are entitled to one- year warranty coverage from the occupancy date.
B) The buyers should draft a list of all their concerns and submit them to the municipality for appropriate coverage.
C) If the builder does not address this issue, the buyers can file a complaint with the provincial warranty authority for any outstanding work the builder did not complete.
D) There is no provincial warranty coverage for commercial condominiums, but the buyers can inquire with the builder about any warranties that they may offer.

2. Audited and unaudited statements provide the financial status of a business to potential buyers. What is the main difference between audited and unaudited financial statements?

A) Audited financial statements provide an accurate picture of the financial status of a business; unaudited financial statements may only contain partially reviewed information.
B) Audited financial statements comply with Generally Accepted Accounting Principles (GAAP); unaudited financial statements do not comply with GAAP.
C) Unaudited financial statements are prepared by Chartered Professional Accountants; audited financial statements are prepared by senior Chartered Professional Accountants.
D) Unaudited financial statements are prepared by accounting students; audited financial statements are completed by accountants who have received their professional designation.

3. 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.

4. When representing a client who is selling a business, a salesperson must be aware of concerns related to compliance. Which of the following is NOT a compliance concern?

A) The seller provides insufficient due diligence documents
B) The condition of goods, chattels, and fixtures cannot be verified
C) The seller discloses all liabilities of the business in writing
D) Income and expense statements contain misrepresentations

5. In regard to Environmental Site Assessments (ESAs), which of the following is NOT accurate?

A) An ESA is intended to determine if a property has been contaminated or is facing any environmental threats.
B) ESAs are regulated under the Canadian Environmental Protection Act.
C) Every new commercial property must undergo an ESA prior to construction.
D) Local building departments use ESAs as the basis for changes to municipal zoning bylaws.

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