1. The first steps in accounting (levels of profit, financial statements, fixed and variable costs)
We cover the stages by which profit emerges from sales, and what the profit and loss statement and the balance sheet are pictures of, starting from how to read the actual figures.
A company's figures are read by shaving the earnings down one level at a time. First, net sales minus the cost of sales is gross profit, called arari (粗利) on the ground (Ordinance on Company Accounting Article 89). Gross profit shows how much power the product or service itself has. Next, subtracting selling, general and administrative expenses, that is, the costs needed in order to sell, such as personnel costs, rent and advertising, gives operating profit (same Ordinance, Article 90), and this shows how much was earned in the main business. Adding non-operating income to operating profit and subtracting non-operating expenses such as interest on borrowings gives ordinary profit (same Ordinance, Article 91). "Gross profit is there but operating profit is thin" can be read as meaning the cause lies in how you sell or how you spend on indirect costs.
Among the financial statements, the profit and loss statement shows the flow of how much was earned and how much spent over a fixed period such as 1 year. The balance sheet shows the balances at a single point in time, the closing date: what is held and to whom how much must be repaid. The balance sheet is to be presented divided into the 3 sections of assets, liabilities and net assets (Ordinance on Company Accounting Article 73), and the total of assets always equals the total of liabilities and net assets. The profit and loss statement is divided into net sales, cost of sales, selling, general and administrative expenses, non-operating income, non-operating expenses, extraordinary income and extraordinary losses (same Ordinance, Article 88). Fixing in your head from the start the difference between a statement that shows flow and one that shows balances keeps you from getting lost.
Costs become clearer when divided into fixed and variable. Fixed costs are those incurred in roughly the same amount whether sales rise or fall, typically office rent and the salaries of permanent employees. Variable costs rise and fall with sales: materials, purchases, and sales commissions linked to revenue. The selling price minus the variable cost per unit is the marginal profit, and dividing the fixed costs by the marginal profit gives the break-even point, the sales volume at which you neither lose nor gain. Which category something falls into changes with the industry and the form of the contract, so judge it against your own company's reality.
Equipment used over a long time is not expensed in full in the year of purchase but is spread as expense across the years of use. This is depreciation (Corporation Tax Act (法人税法) Article 31). Under the straight-line method, the picture is that the acquisition cost divided by the useful life is the depreciation expense each year. Consumption tax works so that a business pays over the tax it received along with its sales, less the tax it paid on purchases and expenses (Consumption Tax Act (消費税法) Article 30). The standard rate is 10 percent in total and the reduced rate 8 percent in total (same Act, Article 29). The consumption tax portion sitting in your hands is money you will ultimately pay over, so it is safer to keep it consciously separate from your own earnings when managing cash flow. For actual calculations and filings, check with the tax office or a tax accountant.
The levels of profit (shaved down in order from the top)
Level of profit
How it is calculated
What it tells you
Gross profit (arari)
Net sales − cost of sales
The margin on the product or service itself
Operating profit
Gross profit − selling, general and administrative expenses
Earnings in the main business
Ordinary profit
Operating profit + non-operating income − non-operating expenses
The real strength including things outside the main business, such as interest
Profit before income taxes
Ordinary profit + extraordinary income − extraordinary losses
Profit including extraordinary gains and losses
Profit for the period
Profit before income taxes − corporation and other taxes
Net sales minus the cost of sales. It shows the margin on the product or service itself (Ordinance on Company Accounting Article 89).
operating profit
Gross profit minus selling, general and administrative expenses. It shows how much was earned in the main business (Ordinance on Company Accounting Article 90).
ordinary profit
Operating profit plus non-operating income minus non-operating expenses. The real strength including recurring gains and losses outside the main business, such as interest (Ordinance on Company Accounting Article 91).
balance sheet
The statement showing the financial position at a single point in time. It is divided into the 3 sections of assets, liabilities and net assets (Ordinance on Company Accounting Article 73).
fixed and variable costs
Fixed costs are incurred in a set amount regardless of sales; variable costs rise and fall with sales. Used in calculating the break-even point.
depreciation
The idea of spreading the acquisition cost of a long-lived asset as expense across the years of use (Corporation Tax Act Article 31).
Worked examples
With net sales of 10,000,000 yen, cost of sales of 6,000,000 yen and selling, general and administrative expenses of 2,500,000 yen, what is operating profit?
Answer and reasoning First, gross profit is 10,000,000 − 6,000,000, that is 4,000,000 yen. Subtracting 2,500,000 yen from that gives operating profit of 1,500,000 yen. The trick is to look at the gross-profit level and the operating-profit level separately.
If a machine with an acquisition cost of 1,200,000 yen is depreciated over a useful life of 5 years by the straight-line method (ignoring residual value), how much is that per year?
Answer and reasoning 1,200,000 ÷ 5 is 240,000 yen. Rather than expensing the whole 1,200,000 yen in the year of purchase, splitting it as expense over 5 years is the idea of depreciation (Corporation Tax Act Article 31).
What is the tax-included price when goods costing 20,000 yen before tax are sold at the standard rate?
Answer and reasoning 20,000 × 1.1 is 22,000 yen. The difference of 2,000 yen is what will ultimately be paid over and is not the company's earnings. The amount payable is calculated as the tax received less the tax paid (Consumption Tax Act Article 30).
Sources and basis: Ordinance on Company Accounting (会社計算規則) Articles 89, 90 and 91
2. The first steps in contracts (from quotation to acceptance inspection and invoicing, plus revenue stamps and NDAs)
We cover the order of the documents that move a transaction and what each of them proves, through to the rules on revenue stamps, confidentiality and subcontracting, all in one thread.
Transaction documents have an order, and each has its role. A quotation is a statement that it can be done on these terms at this price; a purchase order is the buyer's offer; an order acknowledgment is the supplier's acceptance; a delivery note is the record of handing goods over; acceptance inspection, kenshu (検収), is the point at which the receiving side checks the contents and recognizes them as passing; and then come the invoice and payment. A contract itself is formed when the other party accepts an offer stating its content, and, except where laws and regulations provide otherwise, no formality such as a written document is required (Civil Code Article 522). Even so, documents are exchanged in order to leave a record of what was agreed, so that it does not later become a matter of who said what.
Acceptance inspection is a very important point in practice, since it is often the trigger for payment. Check quantity, specification and quality, and if there is a problem, say so at this stage. Where the subject matter delivered does not conform to the terms of the contract as to kind, quality or quantity, the buyer may demand cure, such as repair or delivery of a substitute (Civil Code Article 562). Note that a contract for work, ukeoi (請負), is a contract in which one party promises to complete work and the other promises to pay remuneration for the result (Civil Code Article 632). Aligning at the outset on what counts as completion keeps the acceptance inspection from becoming a dispute.
As for stamp tax, the duty to pay falls on the person who prepares a document listed in Appended Table 1 of the Stamp Tax Act, that is, a taxable document (Stamp Tax Act Article 3). The one you meet most often is the receipt: a receipt for money or securities is exempt if the amount received as stated is under 50,000 yen (same Act, Appended Table 1, Document No. 17). It is not enough merely to affix the stamp; it must be clearly cancelled across both the document and the patterned border of the stamp (same Act, Article 8, paragraph 2). Treatment where everything is exchanged as electronic data is a point on which views sometimes divide, so check with the tax office or a tax accountant.
A confidentiality agreement, the so-called NDA, is a promise not to use information learned in discussions or joint work for other purposes and not to disclose it to third parties. Concluding it before you talk is the basic rule. Management inside your own company is equally indispensable. A trade secret as the Unfair Competition Prevention Act uses the term is information that satisfies 3 conditions: it is managed as secret, it is technical or business information useful for business activities, and it is not publicly known (same Act, Article 2, paragraph 6). In other words, information you do not manage is hard to protect. As for the rules on subcontracting, the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors was amended and came into force on January 1, 2026, with the abbreviated name Act on Ensuring Fairness in Transactions Entrusted to Small and Medium Enterprises and the common name Toritekiho (取適法). Payment by promissory note is prohibited, a criterion based on the number of employees is added to the existing capital-based criterion, and the entrusting of transport needed for the delivery of manufactured and other subject matter is brought within scope, so its reach has widened.
The flow of transaction documents and what each of them means
Stage
Who issues it
What it means
Quotation
The supplier side
A statement that it can be done on these terms at this price
Purchase order
The ordering side
The expression of intention to offer to buy
Order acknowledgment
The supplier side
The expression of intention to accept the offer
Delivery note
The supplier side
The record that the promised goods or deliverables were handed over
Acceptance certificate
The ordering side
The record that the contents were checked and recognized as passing
A statement that it can be done on these terms at this price. The document for aligning on price and specification before an order.
order acknowledgment, chumon-ukesho (注文請書)
The document showing that the supplier has accepted the offer made by the purchase order. It is evidence that the contract was formed.
acceptance inspection, kenshu (検収)
Checking that what was delivered matches the order and recognizing it as passing. It is often the trigger for payment.
taxable document
A document listed in Appended Table 1 of the Stamp Tax Act. The person who prepares it has the duty to pay stamp tax (same Act, Article 3).
NDA (confidentiality agreement)
A contract promising not to use information learned for other purposes and not to disclose it to third parties. The basic rule is to conclude it before the discussion.
Act on Ensuring Fairness in Transactions Entrusted to Small and Medium Enterprises
The abbreviated name of the law that came into force on January 1, 2026 through the amendment of the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors. Commonly called Toritekiho.
Worked examples
You sent the purchase order but have received no order acknowledgment. What is the trouble with that?
Answer and reasoning A contract is formed once there is acceptance (Civil Code Article 522), but no evidence of that acceptance remains. If a dispute arises over quantity or delivery date you cannot show what was agreed, so always keep an order acknowledgment or an explicit acceptance by email.
Does a receipt for 48,000 yen need a revenue stamp?
Answer and reasoning No, because a receipt is exempt if the amount received as stated is under 50,000 yen (Stamp Tax Act, Appended Table 1, Document No. 17). When the amount is near the boundary, watch also whether it is shown excluding or including tax.
Why conclude an NDA before the discussion?
Answer and reasoning After you have spoken, a promise of confidentiality comes too late. And unless you also manage the information as secret inside your company, it is hard to protect it as a trade secret under the Unfair Competition Prevention Act (same Act, Article 2, paragraph 6).
3. The first steps in labor matters (working hours, annual paid leave, premium wages and the payslip)
We check the rules on working time and days off, the premium rates for overtime, the difference between social insurance and labor insurance, and how to read a payslip, each with the provision behind it.
The principle for working hours is 8 hours a day and 40 hours a week, excluding rest periods (Labor Standards Act Article 32). To have people work beyond this, a written agreement, the so-called Article 36 agreement, must be concluded with a labor union organized by a majority of the workers or with a person representing a majority, and filed with the administrative agency (same Act, Article 36, paragraph 1). The limit on the hours by which time may be extended is, as a rule, 45 hours a month and 360 hours a year (same Article, paragraph 4). Rest periods of at least 45 minutes where working hours exceed 6 hours, and at least 1 hour where they exceed 8 hours, are given during working hours (same Act, Article 34). Days off are at least 1 per week, or 4 or more over a period of 4 weeks (same Act, Article 35).
Annual paid leave of 10 working days is given to a worker who has been continuously employed for 6 months from the day of hiring and has reported for work on at least 8 tenths of all working days (Labor Standards Act Article 39, paragraph 1). Days are added after that according to years of service. As a rule it is given in the period the worker requests, and the company can only change it to another period where it would hinder the normal operation of the business (same Article, paragraph 5). No obligation to explain a reason for taking it appears in the provisions. In addition, for workers granted 10 or more days a year, the company must set the period and have them take 5 days within 1 year of the reference date (same Article, paragraph 7).
The minimum rates of premium wages are fixed by law. Overtime work is at least 25 percent, and work on a statutory day off at least 35 percent (Labor Standards Act Article 37, paragraph 1, and Cabinet Order No. 5 of Heisei 6). The part of overtime work exceeding 60 hours in a month is at least 50 percent (proviso to the same paragraph). Night work, in principle from 10 p.m. to 5 a.m., requires a premium of at least 25 percent (same Article, paragraph 4), and where overtime falls in the night hours the two are added together. Note that family allowances and commuting allowances are not included in the wages forming the basis of premium wages (same Article, paragraph 5).
Insurance is less confusing if you learn it as 2 families. Health insurance and employees' pension insurance are what is called social insurance, and the premiums are borne half by the worker and half by the employer (Health Insurance Act Article 161, Employees' Pension Insurance Act Article 82). Workers' accident compensation insurance and employment insurance together are called labor insurance; workers' accident compensation insurance premiums have no worker's share, while for employment insurance the worker bears a part (Act on Collection of Insurance Premiums of Labor Insurance Article 31). A payslip is made of the 3 blocks of attendance, payments and deductions, and the net amount, the gross total minus the total of deductions, is the take-home pay. Wages are, as a rule, paid in currency, directly to the worker, in full, at least once a month, on a fixed date (Labor Standards Act Article 24).
Minimum rates of premium wages
Kind of work
Minimum premium rate
Basis
Overtime work beyond statutory working hours
At least 25 percent
Labor Standards Act Article 37, paragraph 1, and Cabinet Order No. 5 of Heisei 6
Overtime work exceeding 60 hours in a month
At least 50 percent
Proviso to Labor Standards Act Article 37, paragraph 1
Work on a statutory day off
At least 35 percent
Labor Standards Act Article 37, paragraph 1, and Cabinet Order No. 5 of Heisei 6
The working-hours principle of 8 hours a day and 40 hours a week, excluding rest periods (Labor Standards Act Article 32).
Article 36 agreement, saburoku kyotei (36協定)
The labor-management agreement concluded and filed in order to have people do overtime or holiday work (Labor Standards Act Article 36, paragraph 1). The limit is as a rule 45 hours a month and 360 hours a year.
annual paid leave
Paid leave of 10 working days given to a worker who has been continuously employed for 6 months and has reported for work on at least 8 tenths of all working days (Labor Standards Act Article 39, paragraph 1).
premium wages
The added wages of at least 25 percent for overtime, at least 35 percent for a statutory day off, and at least 25 percent for night work (Labor Standards Act Article 37).
gross pay and take-home pay
The total of base pay and allowances is the gross amount; the net amount after subtracting the total of deductions is the take-home pay.
labor insurance
The collective term for workers' accident compensation insurance and employment insurance. Workers' accident compensation insurance premiums have no worker's share (Act on Collection of Insurance Premiums of Labor Insurance Article 31).
Worked examples
On a day of exactly 8 hours' work, what is the minimum rest period required?
Answer and reasoning Labor Standards Act Article 34 provides at least 45 minutes where hours exceed 6, and at least 1 hour where they exceed 8. Exactly 8 hours does not exceed 8 hours, so 45 minutes or more is enough. However, since even a little overtime makes 1 hour or more necessary, many companies set 1 hour from the start.
You have been with the company 6 months. How many days of annual paid leave do you get?
Answer and reasoning 10 working days, if you have reported for work on at least 8 tenths of all working days (Labor Standards Act Article 39, paragraph 1). If you fall short of 8 tenths, none is granted. The 5 days a year the company must set a period for and have you take (same Article, paragraph 7) is a separate matter from the number of days granted.
With gross pay of 300,000 yen and total deductions of 45,000 yen, what is the take-home pay?
Answer and reasoning 300,000 − 45,000, that is 255,000 yen. The deductions line up health insurance premiums, employees' pension insurance premiums, employment insurance premiums, income tax, resident tax and so on. For the individual amounts, check with the responsible department at your company.
Sources and basis: Labor Standards Act (労働基準法) Articles 32, 34, 35, 37 and 39
4. Compliance (harassment, personal information, information management)
To protect both the company and yourself, we cover the patterns of harassment, the handling of personal information, social media and information leaks, insider trading, and the minimum line on copyright.
Power harassment in the workplace is sorted out by 3 elements: that the conduct is backed by a superior relationship, that it goes beyond the scope necessary and appropriate for the work, and that the worker's working environment is harmed. Employers have a duty to take the measures necessary in employment management, such as putting a consultation system in place (Act on Comprehensive Promotion of Labor Policies Article 30-2, paragraph 1). The guideline of the Minister of Health, Labour and Welfare lists 6 representative types: physical attack, psychological attack, isolation from human relationships, excessive demands, insufficient demands, and intrusion into the personal sphere. Note both sides: intent to harm is not among the elements, so it can apply even with no ill will, while at the same time this does not deny guidance that is within the scope necessary and appropriate for the work.
Sexual harassment is sorted into the type where a worker suffers a disadvantage in working conditions because of their response to sexual conduct, and the type where sexual conduct harms the working environment, and employers have a duty to take measures (Act on Equal Opportunity between Men and Women Article 11, paragraph 1). For conduct relating to pregnancy, childbirth and the like, Article 11-3 of the same Act, and for conduct relating to the use of systems such as childcare leave and family care leave, Article 25 of the Child Care and Family Care Leave Act, each lay down a duty to take measures. In every case it is prohibited to dismiss a worker or treat them disadvantageously on the ground that they made a consultation, or cooperated with the response to one by stating the facts.
When you handle personal information, first specify the purpose of use as far as possible (Act on the Protection of Personal Information Article 17, paragraph 1). Without obtaining the individual's consent in advance, you must not handle it beyond the scope necessary for achieving the specified purpose (same Act, Article 18, paragraph 1). When you acquire it, you promptly notify the individual or make it public, except where the purpose of use has been published in advance (same Act, Article 21, paragraph 1). As a rule, providing it to a third party requires the individual's prior consent, except in cases such as those based on laws and regulations (same Act, Article 27, paragraph 1). Race, creed, social status, medical history, criminal record and the like are special care-required personal information, calling for more careful handling (same Act, Article 2, paragraph 3).
Against information leaks the basics are: do not take it out, do not show it, do not connect it. Do not carry customer lists or entry passes around together with your own belongings; do not open your screen in a public place; do not connect your own storage media to business data. On social media, even something you meant only for people inside the company cannot be taken back the moment it is out in a public place. A company insider who learns, in connection with their duties, a material fact concerning the business of a listed company or the like must not trade in that company's shares or the like until after that material fact has been published (Financial Instruments and Exchange Act Article 166, paragraph 1). Someone else's copyrighted work cannot be used without permission, except in cases such as quoting a published work in a manner consistent with fair practice and within a scope justified by the purpose of the quotation (Copyright Act Article 32, paragraph 1). Copyright as a rule subsists until 70 years after the author's death (same Act, Article 51, paragraph 2). If you cannot judge a particular case, always consult your company's administrative departments or a specialist.
Kinds of harassment and the laws behind them
Kind
What the rule is about
Basis
Power harassment
Excessive conduct backed by a superior relationship
Act on Comprehensive Promotion of Labor Policies Article 30-2
Sexual harassment
Disadvantage and worsening of the environment through sexual conduct
Act on Equal Opportunity between Men and Women Article 11
Harassment relating to pregnancy, childbirth and the like
Conduct relating to pregnancy and childbirth
Act on Equal Opportunity between Men and Women Article 11-3
Harassment relating to childcare leave and the like
Conduct relating to the use of childcare and family care systems
Conduct backed by a superior relationship, going beyond the scope necessary and appropriate for the work, and the working environment being harmed (Act on Comprehensive Promotion of Labor Policies Article 30-2).
the 6 types
The representative types set out in the guideline of the Minister of Health, Labour and Welfare: physical attack, psychological attack, isolation from human relationships, excessive demands, insufficient demands, intrusion into the personal sphere.
quid pro quo type and environment type
Suffering a disadvantage in working conditions through one's response to sexual conduct is the quid pro quo type; the working environment being harmed by sexual conduct is the environment type (Act on Equal Opportunity between Men and Women Article 11).
special care-required personal information
Personal information containing descriptions requiring particular care, such as race, creed, social status, medical history and criminal record (Act on the Protection of Personal Information Article 2, paragraph 3).
material fact
An important fact concerning the business of a listed company or the like. A company insider who learns it in connection with their duties is prohibited from trading before it is published (Financial Instruments and Exchange Act Article 166).
quotation
Using a published work in a manner consistent with fair practice and within a scope justified by the purpose (Copyright Act Article 32, paragraph 1). Show the source and keep your own writing the main part.
Worked examples
May you use application documents received at a recruitment interview for a new-business sales list you never told the applicant about?
Answer and reasoning You may not. To handle personal information acquired for recruitment beyond the scope necessary for achieving the specified purpose of use, the individual's prior consent is required (Act on the Protection of Personal Information Articles 17 and 18).
You heard inside the company about an unpublished large contract. May you buy the counterparty listed company's shares now?
Answer and reasoning A company insider who has learned a material fact in connection with their duties must not trade in that company's shares or the like until it is published (Financial Instruments and Exchange Act Article 166, paragraph 1). Buying in a family member's name, or telling someone else so that they buy, is also a problem. Always consult your company's administrative departments.
May you paste another company's web article into your own proposal material as it is?
Answer and reasoning For it to count as a quotation, the work must be published, the use must be consistent with fair practice, and it must be within a scope justified by the purpose (Copyright Act Article 32, paragraph 1). Show the source and keep the form where your own writing is the main part and the quotation subordinate. Reproducing the whole thing goes beyond the scope of quotation.
Sources and basis: Act on Comprehensive Promotion of Labor Policies (労働施策総合推進法) Article 30-2, Act on the Protection of Personal Information (個人情報保護法) Article 17, Copyright Act (著作権法) Article 32
Check quiz
Q1 | Calculating gross profit
A company has net sales of 10 million yen (1,000万円) and cost of sales of 6 million yen (600万円). What is its gross profit (arari, 粗利)?
10 million yen (1,000万円)
16 million yen (1,600万円)
6 million yen (600万円)
4 million yen (400万円)
AnswerD. 4 million yen (400万円)
Gross profit is net sales minus cost of sales (Ordinance on Company Accounting, Article 89 / 会社計算規則 第89条). 10 million yen (1,000万円) − 6 million yen (600万円) = 4 million yen (400万円). The 6 million figure is simply the cost of sales that you subtract; 16 million yen (1,600万円) comes from adding instead of subtracting; 10 million yen is the answer you get if you forget to subtract cost of sales at all.
Q2 | Operating profit
Gross profit is 4 million yen (400万円) and selling, general and administrative expenses are 2.5 million yen (250万円). What is the operating profit?
2.5 million yen (250万円)
6.5 million yen (650万円)
1.5 million yen (150万円)
4 million yen (400万円)
AnswerC. 1.5 million yen (150万円)
Operating profit is gross profit minus selling, general and administrative expenses (Ordinance on Company Accounting, Article 90 / 会社計算規則 第90条). 4 million yen (400万円) − 2.5 million yen (250万円) = 1.5 million yen (150万円). The 2.5 million figure is the amount being subtracted; 6.5 million yen (650万円) comes from adding the two; 4 million yen is what you get if you forget to subtract.
Q3 | Ordinary profit
A company has operating profit of 1.5 million yen (150万円), non-operating income of 200,000 yen (20万円) and non-operating expenses of 500,000 yen (50万円). What is its ordinary profit?
2.2 million yen (220万円)
1.8 million yen (180万円)
1 million yen (100万円)
1.2 million yen (120万円)
AnswerD. 1.2 million yen (120万円)
Ordinary profit is operating profit plus non-operating income minus non-operating expenses (Ordinance on Company Accounting, Article 91 / 会社計算規則 第91条). 150 + 20 − 50 gives 1.2 million yen (120万円). The 1.8 million yen (180万円) figure reverses the signs of income and expense (150 − 20 + 50); 2.2 million yen (220万円) adds both income and expense; 1 million yen (100万円) leaves the non-operating income out of the calculation.
Q4 | The balance sheet
Which combination is the set of sections that the Ordinance on Company Accounting prescribes for a balance sheet?
Net sales, cost of sales, and selling, general and administrative expenses
Revenues, expenses, and net income for the period
Assets, expenses, and net assets
Assets, liabilities, and net assets
AnswerD. Assets, liabilities, and net assets
A balance sheet is presented in three sections: assets, liabilities and net assets (Ordinance on Company Accounting, Article 73 / 会社計算規則 第73条). Net sales, cost of sales, and selling, general and administrative expenses are sections of the profit and loss statement (Article 88 of the same ordinance / 同 第88条), which is easy to confuse with this. Revenues and expenses are also profit-and-loss vocabulary, so they never form a section of the balance sheet.
Q5 | The two financial statements
Which statement about the profit and loss statement and the balance sheet is appropriate?
Both show the share price and market capitalisation at a point in time
The profit and loss statement shows the financial position at a point in time, and the balance sheet shows performance over a period of time
The profit and loss statement shows performance over a period of time; the balance sheet shows the financial position at a point in time
Both show only the breakdown of cash coming in and going out over a period, and neither shows balances
AnswerC. The profit and loss statement shows performance over a period of time; the balance sheet shows the financial position at a point in time
The profit and loss statement is a flow: how much was earned and spent over a period such as 1 year. The balance sheet is a stock: at the single moment of the closing date, what the company holds and what it owes to whom. The second option simply swaps the two. Tracking movements of cash is the job of the cash flow statement, and share prices do not appear in the financial statements at all.
Q6 | Example of a fixed cost
When costs are split into fixed and variable, which of the following is generally a fixed cost?
Raw materials used in the product
The purchase cost of merchandise
Sales commission paid in proportion to sales
Rent on the office
AnswerD. Rent on the office
A fixed cost stays roughly the same whether sales rise or fall, and rent is the classic example. Purchase costs, raw materials and sales-linked commission all move up and down with sales, so they are variable costs. Which side a cost falls on can change with the industry or the form of the contract, so judge it against how your own company actually operates.
Q7 | Break-even point
A product sells for 900 yen (900円), has a variable cost of 400 yen (400円) per unit, and carries fixed costs of 3 million yen (300万円) per month. What monthly sales volume is the break-even point?
6,000 units
3,333 units
About 2,308 units
7,500 units
AnswerA. 6,000 units
The marginal profit left by each unit sold is 900 − 400 = 500 yen (500円). Fixed costs of 3,000,000 yen ÷ 500 yen = 6,000 units. The 3,333 figure divides fixed costs by the selling price; 7,500 divides by the variable cost; about 2,308 divides by 1,300, treating marginal profit as the sum rather than the difference.
Q8 | Depreciation amount
A machine acquired for 1.2 million yen (120万円) is depreciated over a useful life of 5 years by the straight-line method (ignore residual value). What is the annual depreciation expense?
1.2 million yen (120万円)
600,000 yen (60万円)
240,000 yen (24万円)
120,000 yen (12万円)
AnswerC. 240,000 yen (24万円)
Under the straight-line method the acquisition cost is divided evenly across the useful life: 1,200,000 ÷ 5 = 240,000 yen (24万円). Charging 1.2 million yen (120万円) is the mistake of expensing the whole purchase in the year of purchase; 600,000 yen (60万円) assumes a 2-year life; 120,000 yen (12万円) divides by 10 years. Depreciation is the idea of spreading the cost of a long-lived asset over the years it is used (Corporation Tax Act, Article 31 / 法人税法 第31条).
Q9 | Consumption tax payable
A taxable business received 500,000 yen (50万円) of consumption tax together with its sales, and paid 300,000 yen (30万円) of consumption tax on purchases and expenses. Which explanation of the amount to be paid to the tax office is appropriate?
Pay the 300,000 yen (30万円) paid out, as it stands
Pay the full 500,000 yen (50万円) received
Pay 800,000 yen (80万円), being the 500,000 yen (50万円) received plus the 300,000 yen (30万円) paid
Pay 200,000 yen (20万円), being the 500,000 yen (50万円) received less the 300,000 yen (30万円) paid
AnswerD. Pay 200,000 yen (20万円), being the 500,000 yen (50万円) received less the 300,000 yen (30万円) paid
Consumption tax is paid over as the tax received on sales less the tax paid on purchases and expenses (Consumption Tax Act, Article 30 / 消費税法 第30条). 500,000 yen (50万円) − 300,000 yen (30万円) = 200,000 yen (20万円). Paying over the full amount received would mean bearing the tax you already paid a second time. The actual calculation has requirements such as retaining qualified invoices, so check the details with the tax office or a tax accountant.
Q10 | Consumption tax rates
Which combination gives the standard rate and the reduced rate of consumption tax?
Standard 8 percent, reduced 6.24 percent
Standard 12 percent, reduced 10 percent
Standard 10 percent, reduced 5.5 percent
Standard 10 percent, reduced 8 percent
AnswerD. Standard 10 percent, reduced 8 percent
The standard rate totals 10 percent and the reduced rate totals 8 percent. They break down into 7.8 percent national consumption tax plus 2.2 percent local consumption tax, and 6.24 percent plus 1.76 percent respectively (Consumption Tax Act, Article 29 / 消費税法 第29条; Local Tax Act, Article 72-83 / 地方税法 第72条の83). The reduced rate covers food and drink other than alcohol and eating out, and newspapers on subscription published at least twice a week.
Q11 | Order of the documents
Which is the appropriate order for the usual flow of trading documents?
Purchase order (発注書) → quotation (見積書) → acknowledgement of order (請書) → delivery note (納品書) → invoice (請求書)
Quotation (見積書) → delivery note (納品書) → purchase order (発注書) → acknowledgement of order (請書) → invoice (請求書)
Invoice (請求書) → quotation (見積書) → purchase order (発注書) → delivery note (納品書) → acknowledgement of order (請書)
Quotation (見積書) → purchase order (発注書) → acknowledgement of order (請書) → delivery note (納品書) → invoice (請求書)
AnswerD. Quotation (見積書) → purchase order (発注書) → acknowledgement of order (請書) → delivery note (納品書) → invoice (請求書)
The quotation (mitsumorisho, 見積書) setting out price and terms comes first; in response the buyer issues a purchase order (hacchūsho, 発注書), which is the offer, and the seller returns an acknowledgement of order (ukesho, 請書), which is the acceptance. A delivery note (nōhinsho, 納品書) accompanies the goods or deliverables, and after inspection and acceptance comes the invoice (seikyūsho, 請求書). If the purchase order came before the quotation you would be ordering without agreement on price, and the invoice never comes first.
Q12 | Formation of a contract
Which statement about the formation of a contract is correct under the Civil Code?
No contract of any kind is formed unless a written contract is drawn up and sealed by both parties
It is formed only when payment is made
Without the parties' seals, no contract is ever formed in any circumstances
It is formed when the other party accepts the offer
AnswerD. It is formed when the other party accepts the offer
A contract is formed when the other party accepts a manifestation of intention that sets out the content and proposes to conclude it, and no writing or other formality is required except where laws provide otherwise (Civil Code, Article 522 / 民法 第522条). A document or a seal is not a condition of formation but a means of proving later what was agreed. Payment is performance under the contract, not a condition of its formation.
Q13 | What kenshū means
Which is an appropriate explanation of kenshū (検収), inspection and acceptance?
Asking your bank to process payment in time for the due date
Checking that what was delivered matches the order, and accepting it as satisfactory
Affixing a revenue stamp to a contract
Presenting the estimated price and terms to the other party in advance
AnswerB. Checking that what was delivered matches the order, and accepting it as satisfactory
Kenshū (検収) is the point at which the receiving side checks quantity, specification and quality and accepts delivery; it is often the trigger for payment. If something does not conform, you say so at this stage and demand cure, such as repair or delivery of a substitute (Civil Code, Article 562 / 民法 第562条). Presenting a quotation, instructing a payment and affixing a stamp are all separate procedures.
Q14 | Receipts and stamp duty
Under the Stamp Tax Act, up to what stated amount is a receipt for money or securities exempt from stamp duty?
Under 30,000 yen (3万円)
Under 50,000 yen (5万円)
Under 100,000 yen (10万円)
Under 10,000 yen (1万円)
AnswerB. Under 50,000 yen (5万円)
A receipt is exempt if the amount received as stated on it is under 50,000 yen (5万円) (Stamp Tax Act, Appended Table 1, Document No. 17 / 印紙税法 別表第一 第17号文書). From 50,000 yen up to 1 million yen (100万円) the duty is 200 yen, and it rises as the amount rises. The duty is owed by the person who prepares the taxable document (Article 3 of the same Act / 同法 第3条).
Q15 | Cancelling the stamp
Which is correct about affixing a revenue stamp to a taxable document?
Stamps may only be affixed to the reverse of the document and must never go on the front
It is enough to write the date and the person in charge on the stamp in pencil
It must be clearly cancelled across both the document and the patterned face of the stamp
Simply sticking it on the document is enough; there is no need to cancel the stamp at all
AnswerC. It must be clearly cancelled across both the document and the patterned face of the stamp
Once affixed, a stamp must be clearly cancelled across both the document and the patterned face of the stamp (Stamp Tax Act, Article 8, paragraph 2 / 印紙税法 第8条第2項). Without cancellation the duty counts as unpaid. A mark made in a way that is easily erased does not count as cancellation, and there is no provision restricting the stamp to the reverse of the document.
Q16 | Trade secret requirements
Which is NOT listed in the Unfair Competition Prevention Act as a requirement for a trade secret?
That it is not publicly known
That it is registered with the Japan Patent Office
That it is managed as a secret
That it is technical or business information useful for business activities
AnswerB. That it is registered with the Japan Patent Office
A trade secret must satisfy three things: it is managed as a secret, it is technical or business information useful for business activities, and it is not publicly known (Unfair Competition Prevention Act, Article 2, paragraph 6 / 不正競争防止法 第2条第6項). Registration is not a requirement; indeed this is the opposite of a patent, which is registered and its content published — a trade secret is protected by being kept secret. If it is not managed as a secret inside the company, protection is hard to obtain.
Q17 | Purpose of an NDA
Which is an appropriate purpose for entering into an NDA (non-disclosure agreement)?
To settle the transaction price and payment terms before any contract is concluded
To manage employees' working hours
To promise not to use information learned for purposes outside the agreed purpose, and not to disclose it to third parties
To set out when ownership of delivered goods passes to the other party
AnswerC. To promise not to use information learned for purposes outside the agreed purpose, and not to disclose it to third parties
An NDA settles in advance how information learned in meetings or joint work will be handled; its core is a ban on use outside the stated purpose and a ban on disclosure to third parties. Fixing the price belongs in a quotation or the contract, transfer of ownership in the sale or works clauses, and management of working hours in employment matters — none of these is the role of an NDA.
Q18 | New name of the Subcontract Act
The law commonly called the Subcontract Act (下請法) was renamed by an amendment in force from 1 January 2026. Which is its current short name?
Small and Medium-sized Enterprise Basic Act (中小企業基本法)
Act on the Promotion of Subcontracting Small and Medium-sized Enterprises (下請中小企業振興法)
Act on Ensuring Fair Transactions with Small and Medium Contractors (中小受託取引適正化法)
Antimonopoly Act (独占禁止法)
AnswerC. Act on Ensuring Fair Transactions with Small and Medium Contractors (中小受託取引適正化法)
The Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors (下請代金支払遅延等防止法) was renamed by the amendment; its short name is now 中小受託取引適正化法 and it is popularly called 取適法 (Toriteki-hō). The Small and Medium-sized Enterprise Basic Act (中小企業基本法) and the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises (下請中小企業振興法) are separate laws with different aims, and the Antimonopoly Act (独占禁止法) sets competition rules for transactions generally — none of them is the renamed law.
Q19 | Content of the amendment
Which item is part of the amendment to the Subcontract Act that came into force on 1 January 2026, as explained by the Japan Fair Trade Commission?
Payment was restricted to promissory notes only
Payment by promissory note was prohibited
Consignment of transport of manufactured goods was removed from the scope
Coverage is now determined solely by the stated-capital test
AnswerB. Payment by promissory note was prohibited
The amendment prohibits payment by promissory note, and also prohibits payment methods that make it hard to receive the full amount by the payment date. Coverage was widened: an employee-number test was added alongside the existing stated-capital test, and consignment of the transport needed to deliver manufactured goods was newly brought within scope.
Q20 | What an ukesho is
Which is an appropriate explanation of a chūmon ukesho (注文請書), an acknowledgement of order?
A document demanding payment
A document by which the party receiving an order indicates that it accepts that order
A document notifying the quantity of goods delivered
A document the buyer issues to ask for a price quotation
AnswerB. A document by which the party receiving an order indicates that it accepts that order
An ukesho (請書) puts in writing the acceptance of the offer made by the purchase order, and once both are in hand it is easy to show later what was agreed. Asking for a quotation is done by a request for quotation, notifying quantity by the delivery note, and demanding payment by the invoice — each has a different role.
Q21 | Statutory working hours
Which is the general rule on statutory working hours under the Labor Standards Act?
8 hours a day, 48 hours a week
10 hours a day, 50 hours a week
7 hours a day, 35 hours a week
8 hours a day, 40 hours a week
AnswerD. 8 hours a day, 40 hours a week
Excluding rest periods, an employer may not have an employee work more than 40 hours a week or 8 hours a day (Labor Standards Act, Article 32 / 労働基準法 第32条). To work people beyond this, the employer must conclude and file a so-called 36 agreement (saburoku kyōtei, 36協定) (Article 36, paragraph 1 of the same Act / 同法 第36条第1項). 48 hours a week is not a figure in the current law.
Q22 | Length of the rest break
On a day with 7 hours of working time, what is the minimum rest break the Labor Standards Act requires?
At least 30 minutes
There is no obligation to give a break
At least 45 minutes
At least 1 hour
AnswerC. At least 45 minutes
Where working time exceeds 6 hours the employer must give at least 45 minutes, and where it exceeds 8 hours at least 1 hour, during the working time (Labor Standards Act, Article 34 / 労働基準法 第34条). 7 hours is more than 6 but not more than 8, so at least 45 minutes. The 1-hour minimum applies only when working time exceeds 8 hours; at exactly 8 hours, 45 minutes is enough.
Q23 | The rule on days off
Which is the rule on days off under the Labor Standards Act?
At least two days off must be given every week
At least 120 days off must be given each year
At least 4 days off must be given each month
At least one day off must be given every week
AnswerD. At least one day off must be given every week
An employer must give a worker at least one day off every week, and this rule does not apply where 4 or more days off are given over a period of 4 weeks (Labor Standards Act, Article 35 / 労働基準法 第35条). A two-day weekend or 120 days off a year is how many companies operate, but it is not a number the law imposes across the board.
Q24 | Days of annual leave
How many days of annual paid leave must be given to a worker who has been continuously employed for 6 months from the date of hiring and has attended on at least 80 percent of all working days?
7 working days
5 working days
8 working days
10 working days
AnswerD. 10 working days
A worker continuously employed for 6 months who attended on at least 80 percent of all working days must be given 10 working days of paid leave, continuous or in parts (Labor Standards Act, Article 39, paragraph 1 / 労働基準法 第39条第1項). The entitlement then increases with length of service. The figure of 5 days is the separate duty on the company to specify dates and have workers take leave, for those granted 10 or more days a year (paragraph 7 of the same Article / 同条第7項).
Q25 | Duty to specify dates
Which statement about the timing of annual paid leave matches the law?
Unless the worker personally requests it, the company never needs to specify dates and make them take leave
The company may decide the dates of all annual paid leave regardless of the worker's wishes
Leave cannot be taken unless the reason is explained to the company
For workers granted 10 or more days a year, the company must specify dates and have them take 5 days
AnswerD. For workers granted 10 or more days a year, the company must specify dates and have them take 5 days
For a worker granted 10 or more days of annual paid leave, the company must specify dates for 5 of them, worker by worker, and grant them within one year from the reference date (Labor Standards Act, Article 39, paragraph 7 / 労働基準法 第39条第7項). The company cannot decide all the days: as a rule leave is given at the time the worker requests (paragraph 5 of the same Article / 同条第5項). Nothing in the Act requires the worker to explain a reason.
Q26 | Overtime premium rate
What is the minimum premium rate the law sets for overtime work beyond statutory working hours?
At least 35 percent
At least 10 percent
At least 50 percent
At least 25 percent
AnswerD. At least 25 percent
The premium for overtime work is at least 25 percent (Labor Standards Act, Article 37, paragraph 1 / 労働基準法 第37条第1項; Cabinet Order No. 5 of 1994 / 平成6年政令第5号). At least 35 percent applies to work on a statutory day off, and at least 50 percent to the portion of overtime exceeding 60 hours in a month (proviso to the same paragraph / 同項ただし書) — different situations.
Q27 | Calculating overtime pay
Someone whose hourly wage is 2,000 yen (2,000円) works 2 hours beyond statutory working hours (not extending into late-night hours). Including the premium, how much is payable for those hours?
4,000 yen (4,000円)
6,000 yen (6,000円)
4,500 yen (4,500円)
5,000 yen (5,000円)
AnswerD. 5,000 yen (5,000円)
Overtime carries a premium of at least 25 percent, so the hourly figure is 2,000 × 1.25 = 2,500 yen (2,500円), and 2 hours comes to 5,000 yen (5,000円). 4,000 yen (4,000円) forgets the premium; 6,000 yen (6,000円) uses a 50 percent premium; 4,500 yen (4,500円) applies the premium to only one of the two hours.
Q28 | Late-night hours
Under the Labor Standards Act, which is the standard band of hours treated as late-night work attracting a premium?
From 9 p.m. to 6 a.m.
From 10 p.m. to 5 a.m.
From midnight to 5 a.m.
From 8 p.m. to 4 a.m.
AnswerB. From 10 p.m. to 5 a.m.
As a rule, work between 10 p.m. and 5 a.m. requires a premium of at least 25 percent (Labor Standards Act, Article 37, paragraph 4 / 労働基準法 第37条第4項). There is an exception setting the band at 11 p.m. to 6 a.m. for areas or periods the Minister of Health, Labour and Welfare finds necessary. Where overtime runs into late-night hours, the premiums are added together.
Q29 | Who bears the premiums
Which statement about who bears social and labour insurance premiums is correct?
Health insurance and employees' pension premiums are borne half by the worker and half by the employer
Workers' accident compensation insurance premiums are also split half and half between worker and employer
For employment insurance the employer bears nothing and the worker bears the whole premium
Health insurance and employees' pension premiums are borne in full by the insured worker
AnswerA. Health insurance and employees' pension premiums are borne half by the worker and half by the employer
Health insurance and employees' pension insurance premiums are borne half by the insured person and half by the employer (Health Insurance Act, Article 161 / 健康保険法 第161条; Employees' Pension Insurance Act, Article 82 / 厚生年金保険法 第82条). On the labour insurance side, what the insured person bears is limited to the portion corresponding to the employment insurance rate; the worker bears nothing of the workers' accident compensation portion (Act on Collection of Insurance Premiums of Labor Insurance, Article 31 / 労働保険の保険料の徴収等に関する法律 第31条).
Q30 | Calculating take-home pay
On a payslip showing gross pay of 300,000 yen (300,000円) and total deductions of 45,000 yen (45,000円), what is the net amount paid (take-home pay)?
45,000 yen (45,000円)
345,000 yen (345,000円)
300,000 yen (300,000円)
255,000 yen (255,000円)
AnswerD. 255,000 yen (255,000円)
Net pay is gross pay less total deductions: 300,000 − 45,000 = 255,000 yen (255,000円). 345,000 yen (345,000円) adds the deductions instead; 300,000 yen (300,000円) forgets to deduct them. As a rule, wages must be paid in currency, directly, in full, at least once a month on a fixed date, and deductions are allowed only where a law or a labour-management agreement provides for them (Labor Standards Act, Article 24 / 労働基準法 第24条).
Q31 | Elements of power harassment
Which is NOT listed in the law as an element of power harassment in the workplace?
Conduct that draws on a superior relationship
That the person acting intended to cause harm
That the worker's working environment is harmed
Conduct going beyond what is necessary and appropriate for the work
AnswerB. That the person acting intended to cause harm
The law frames it as conduct drawing on a superior relationship, going beyond what is necessary and appropriate for the work, and thereby harming the worker's working environment; the actor's intention is not listed as an element (Act on Comprehensively Advancing Labor Measures, Article 30-2, paragraph 1 / 労働施策総合推進法 第30条の2第1項). So conduct can qualify even without ill will, while at the same time guidance that stays within what is necessary and appropriate for the work is not denied.
Q32 | The six types
Which is NOT among the six representative types of power harassment set out in the guidelines of the Minister of Health, Labour and Welfare?
Isolation from human relationships
Intrusion into the private sphere
Non-payment of wages
Demands set far too low
AnswerC. Non-payment of wages
The six types are physical attack, psychological attack, isolation from human relationships, excessive demands, demands set far too low, and intrusion into the private sphere. Non-payment of wages is a problem about payment of wages (Labor Standards Act, Article 24 / 労働基準法 第24条) and is not listed as a type of harassment.
Q33 | Sexual harassment framework
Which statement about workplace sexual harassment, for which the Act on Equal Opportunity between Men and Women imposes a duty to take measures, is appropriate?
Sexual conduct by people outside the company, such as at a client, is entirely outside the scope and the employer need take no employment-management measures
There is no problem if the person did not clearly refuse on the spot
It covers both suffering disadvantage in working conditions through one's response to sexual conduct, and having one's working environment harmed by sexual conduct
The duty to take measures covers only female workers, and does not apply where a male worker is subjected to sexual conduct
AnswerC. It covers both suffering disadvantage in working conditions through one's response to sexual conduct, and having one's working environment harmed by sexual conduct
Article 11, paragraph 1 of the Act (男女雇用機会均等法 第11条第1項) requires employment-management measures such as setting up a consultation system, both for the case where a worker suffers disadvantage in working conditions because of their response to sexual conduct, and for the case where sexual conduct harms the working environment. The Article says "worker" and does not limit this by sex. Where another employer asks for cooperation needed to implement measures, the employer must endeavour to comply (paragraph 3 of the same Article / 同条第3項).
Q34 | Protecting the complainant
How must a worker who has raised a harassment consultation be treated under the law?
A transfer or a pay cut may be imposed because of the fact that they raised it
Consultations may only be accepted in writing
They must not be dismissed or treated disadvantageously because they raised it
The content of the consultation must always be disclosed to the whole company
AnswerC. They must not be dismissed or treated disadvantageously because they raised it
A worker must not be dismissed or otherwise treated disadvantageously for having raised a consultation, or for having stated the facts in cooperating with the handling of one (Act on Comprehensively Advancing Labor Measures, Article 30-2, paragraph 2 / 労働施策総合推進法 第30条の2第2項; Act on Equal Opportunity between Men and Women, Article 11, paragraph 2 / 男女雇用機会均等法 第11条第2項). The content of a consultation is information to be protected, and nothing restricts the intake channel to writing.
Q35 | Childcare-related conduct
Which law obliges employers to take employment-management measures against harassment arising from conduct relating to the use of systems such as childcare leave and family care leave?
Child Care and Family Care Leave Act (育児介護休業法)
Act on the Protection of Personal Information (個人情報の保護に関する法律)
Act on Equal Opportunity between Men and Women (男女雇用機会均等法)
Act on Comprehensively Advancing Labor Measures (労働施策総合推進法)
AnswerA. Child Care and Family Care Leave Act (育児介護休業法)
For conduct relating to the use of childcare leave, family care leave and other systems or measures concerning raising children or caring for family members, Article 25 of the Child Care and Family Care Leave Act (育児介護休業法 第25条) requires employment-management measures such as setting up a consultation system. Conduct relating to pregnancy and childbirth is dealt with by Article 11-3 of the Act on Equal Opportunity between Men and Women (男女雇用機会均等法 第11条の3).
Q36 | Specifying the purpose of use
Which is a duty of a business handling personal information?
The purpose of use must be specified as far as possible
The purpose of use need not be specified
The fact that information was obtained must be kept from the person concerned
Once set, the purpose of use may be changed in any way at all
AnswerA. The purpose of use must be specified as far as possible
In handling personal information, the purpose of use must be specified as far as possible (Act on the Protection of Personal Information, Article 17, paragraph 1 / 個人情報保護法 第17条第1項). A change may not go beyond a scope reasonably regarded as having relevance to the purpose before the change (paragraph 2 of the same Article / 同条第2項). On obtaining the information, unless the purpose has been announced in advance, it must be promptly notified to the person or made public (Article 21, paragraph 1 / 同 第21条第1項).
Q37 | Provision to third parties
What is the general rule when providing personal data to a third party?
Provision is never permitted, even where it is based on laws and regulations
As a rule, the consent of the person concerned must be obtained in advance
It may be provided freely if the recipient is a business partner
Internal management approval removes the need for the person's consent
AnswerB. As a rule, the consent of the person concerned must be obtained in advance
A business handling personal information must not provide personal data to a third party without obtaining the prior consent of the person concerned, except in cases such as where it is based on laws and regulations, or where it is necessary to protect a person's life, body or property and obtaining consent is difficult (Act on the Protection of Personal Information, Article 27, paragraph 1 / 個人情報保護法 第27条第1項). Internal approval or the existence of a business relationship is no substitute for that consent.
Q38 | Special care-required data
Which of these counts as special care-required personal information under the Act on the Protection of Personal Information?
The company's main telephone number
The person's medical history
An email address used for work
The name of the department someone works in
AnswerB. The person's medical history
Special care-required personal information is personal information containing descriptions such as the person's race, creed, social status, medical history, criminal record, or the fact of having suffered harm from a crime — matters designated as needing particular care so that unfair discrimination or prejudice does not arise (Act on the Protection of Personal Information, Article 2, paragraph 3 / 個人情報保護法 第2条第3項). A department name, telephone number or email address can be personal information, but none is a matter listed in this definition.
Q39 | Trading before disclosure
You learn, in the course of your duties, an undisclosed material fact about a listed business partner. What is the appropriate response?
You are not a director, so you may trade the shares freely
You may trade if you use a family member's name
Tell a colleague and have them trade on your behalf
Do not trade that company's shares or the like until the fact is made public
AnswerD. Do not trade that company's shares or the like until the fact is made public
Where a person connected with a company learns, in the course of their duties, a material fact concerning the business of a listed company, they must not trade that company's shares or the like until that material fact has been made public (Financial Instruments and Exchange Act, Article 166, paragraph 1 / 金融商品取引法 第166条第1項). Rank makes no difference, and using another name or telling someone else so they trade is also problematic. When unsure, consult the relevant department inside your company.
Q40 | Conditions for quotation
Which is NOT a condition the Copyright Act sets for quoting someone else's work?
That the quotation is compatible with fair practice
That it is within a scope justified by the purpose of the quotation
That the work has been made public
That the author is still living
AnswerD. That the author is still living
A work that has been made public may be quoted, and the quotation must be compatible with fair practice and within a scope justified by the purpose of the quotation, such as news reporting, criticism or research (Copyright Act, Article 32, paragraph 1 / 著作権法 第32条第1項). Whether the author is alive is not a condition of quotation. Note separately that copyright as a rule subsists until 70 years after the author's death (Article 51, paragraph 2 / 同 第51条第2項).
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