PHIL.

CPA LICENSURE EXAMINATION REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

Obligations 5. Which of the following circumstances will payment of lesser amount fail to discharge a debt,
1. Which of the following statements is the BEST description of a “condition”? despite a creditor’s promise to accept the lesser amount in full satisfaction of the debt?
A. A term which must be satisfied before a contract can come into existence. A. Where the creditor has requested that the debtor pay the lesser amount on an earilier
B. A term in a contract which provides that the contract will terminate on the happening of a date.
particular event. B. Where the creditor has requested that the debtor pay the lesser amount at a different
C. A term in a contract, non-performance of which may result in rescission of the contract place.
and/or damage to the plaintiff. C. When the creditor has requested that the debtor pay the lesser amount by cheque
D. A tern in a contract, the consequence of breach of which cannot be determined until after instead of cash.
the breach has occurred and the seriousness of the effects of the breach can be D. Where the creditor has requested that the debtor accompany payment of the lesser
ascertained. amount with some other act they were not originally bound by the contract to perform.

2. Which of the following situations is the BEST example of executor consideration? 6. Which of the following condonations will NOT extinguish the debtor’s obligation?
A. Anton pays Manny P50 today, in return, for Manny giving Anton an orange today. A. The condonation and the acceptance are in a public instrument. The condonation
B. Anton promises to pay Manny P50 tomorrow, in return, for Manny giving Anton, an involves a parcel of land.
orange tomorrow. B. The condonation is in a public instrument. The acceptance is made orally. The
C. Anton promises to pay Manny P50 tomorrow, in return, for Manny giving Anton, an condonation involves a computer printer whose value is P4,000.
orange yesterday. C. The condonation and the acceptance are made orally with the creditor delivering to the
D. All of the above. debtor simultaneously the promissory note amounting to P10,000.
D. The condonation is in a public instrument. The acceptance is made in a private
3. Betina Furniture Co. undertook to deliver to Mr. Magsaysay specified places of living room, instrument. The condonation involves a television set worth P20,000.
dining room and bedroom furniture – all made of narra, for a price stated in the contract. The
contract had a penal clause that any violation of the contract would entitle the aggrieved party 7. Under the law, anything paid or delivered before the arrival of the suspensive period the
to damages in the amount of P100,000. The furniture delivered by Betina was made, not of obligor being unaware of the period, may be recovered with the fruits and interest. Which is
narra but of inferior wood. In a suit to recover damages, Mr. Magsaysay was able to prove the EXCEPTION?
that the actual damages he sustained amount to P200,000. If you were to decide based on A. The obligor is not aware of the period.
legal ground, how much claim would you award to Mr. Magsaysay? B. The obligor delivered before the period.
A. P50,000 C. P200,000 C. The period is for the benefit of the creditor and debtor.
B. P100,000 D. P300,000 D. The obligation involved is an obligation to do and not to do.

4. Demand is necessary in this situation for the debtor to be in delay 8. The following are the requisites for the filing of subrogatory action, EXCEPT
A. When the time is a controlling motive. A. the act being impugned is fraudulent.
B. When the obligation has been fulfilled. B. the credit must be due and demandable.
C. When the debtor delivers a wrong thing in the due date. C. the creditor has a right of credit against the debtor although at the moment is not
D. When the obligor has rendered it beyond his power to perform. liquidated.
D. there must be a failure of the debtor to collect from third persons whether willfully or
through negligence.

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Contracts D. the third person who received the property conveyed of, by onerous title, has been an
9. Which of the following statements relative to contracts is INCORRECT? accomplice in the fraud.
A. If both parties are minors, the contract is unenforceable.
B. If one party is a minor and other is not, the contract is voidable. 14. Roy and Carlos undertook a contract to deliver to Raul in Manila a boat docked Subic.
C. A contract entered into while in state of drunkenness is voidable. Before they could deliver it, however, the boat sank in a storm. The contract provides that
D. If the insane party entered into the contract during a lucid interval, the contract is fortuitous events shall not exempt Roy and Carlos from their obligations. Owing to the lost of
voidable. the more boat, such obligations is deemed converted into one of indemnity for damages. Is
the liability of Roy and Carolos joint or solidary?
10. For a contract to exist, the agreement that was negotiated between the parties MUST A. Solidary or joint upon the discretion of Raul.
A. contain a promise which is exchanged for something of value. B. Neither solidary nor joint since they cannot waive the defense of fortuitous event.
B. contain a commitment in undertaking to abide by the agreement. C. Joint since the conversion of the liability to one of indemnity for damages made it joint.
C. clearly evidence the promise between the promisor and the promisee. D. Solidary, sine Roy and Carlos failed to perform their obligation to deliver the motor boat.
D. all of the choices.
15. Mr. A was appointed by the court as guardian of the minor X. Mr. A sold the vegetables that
11. Which of the following situations appears to involve a conduct that amounts to were planted in the lot of X. The value of the vegetable is P5,000 but Mr. A sold the
“unconscionability” which can be used as a defense to challenge the validity of contract? vegetables for only P2,000. The contract is
A. A woman gave all of her property to the religious order of which she was a member. A. Rescissible C. Void.
B. A man induced another to sign a contract by telling him that if he did not, he would report B. Unenforceable. D. Voidable
his son to the police for committing a criminal offense.
C. An elderly couple sign a mortgage in favor of a Bank guaranteeing their son’s debt, the 16. A, a minor, 16 years of age, together with his brothers B and C, both of legal age are jointly
Bank manager knows that the couple are unaware of the son’s financial difficulties. and severally liable in a contract of loan to pay X the amount of P120,000. Upon maturity of
D. All of the choices. the obligation, A
A. is liable to pay the amount of P30,000
12. Samson, Inc. and Goodfit Construction, Inc. are only construction companies available to bid B. is liable to pay the amount of P60,000
of the construction of the new building at the Katipunan Institute of Technology. Executives C. is liable to pay him the whole amount of P120,000.
from the two companies agreed to fix the bids so that Samson, Inc. wins one contract and D. is liable to pay only the amount which benefits him.
Goodfit Construction, Inc. the other contract. Samson, Inc. reneges on the deal and wins
both contracts, Goodfit Construction, Inc. sues for breach of contract. Will Samson, Inc. win? Sales
A. No, agreements to defeat competitive bidding are illegal. 17. Knowing that the car had a hidden crack in the engine, X sold it to Y without informing the
B. Yes, agreements to defeat competitive bidding are legal. latter about it. In any event, the deed of sale expressly stipulated that X is not liable for
C. Yes, agreements to defeat competitive bidding are legal only in the construction industry. hidden defects. Does Y have the right to demand from X a reimbursement of what he spent
D. No, agreements to defeat competitive bidding are illegal only in the construction industry. to repair the engine plus damages?
A. No, because Y waived the warranty against hidden defects.
13. The following are the requisites for the filing of rescissory action, EXCEPT B. Yes, X is liable whether or note he was aware of the hidden defect.
A. the act of being impugned is fraudulent. C. No, because Y is in estoppel, having changed the engine without prior demand.
B. the right and actions are not purely personal or inherent in the person of the debtor. D. Yes, since the defect was not hidden; X knew of it but he acted in bad faith in not
C. the debtor has made a subsequent contract conveying a patrimonial benefit to a third disclosing the fact to Y.
person.
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18. In case of eviction, the vendor shall be liable to the vendee only for the value of the thing sold 23. The specific goods are those goods which are identified
at the time of eviction in which of the following cases? A. at the time of contract of sale.
A. Where there is waiver consciente. B. after the formation of contract of sale.
B. Where there is waiver intencionada. C. during the performance of contract of sale.
C. When the vendor was in bad faith and there was stipulation exempting the vendor from D. at the time of enforcement of contract of sale.
liability in case of eviction.
D. When the vendor was in bad faith and there was no stipulation exempting the vendor 24. Where after the agreement to sell for the sale of specific goods, the goods perish without any
from liability in case of eviction. fault of the buyer or seller, the contract of sales becomes void if the goods perish
A. after the risk passes to the buyer.
19. Mr. Seller and Mr. Buyer orally agreed on the following B. before the risk passes to the buyer.
• The land to be sold has an area of 10,000 sq. meters; C. without any knowledge of the seller.
• Price is P5 million; and D. without any knowledge of the buyer.
• Mr. Seller shall prepare the deed of sale.
With fraudulent intent, Mr. Seller knowing the inadequacies of Mr. Buyer with respect to 25. S sold a parcel of land to B for P100,000 with B paying the said amount immediately.
numbers, write 1,000 sq. meters instead of 10,000 sq. meters win the deed of sale. The sale Although S delivered the transfer certificate of title of the land to B, the parties did not execute
is any document at all for the sale except the receipt for the payment which S issued to B. B
A. void. now wants to register the receipt for the payment which S issued to B. B now wants to
B. valid but the contract may be reformed. register the sale with the Register of Deeds.
C. valid but the instrument may be reformed. A. The contract between S and B is rescissible; hence B can sue for damages.
D. voidable but the contract may be reformed. B. The contract between S and B is void because it was not in the form required by law.
C. B cannot compel S to execute a Deed of Sale because the contract is unenforceable.
20. Which of the following is NOT an essential element of a contract of sale? D. B can compel S to execute a Deed of Sale which is duly notarized so that B can register
A. There must be some price for the goods. the sale.
B. There must be transfer of ownership of goods.
C. There must be some goods as subject matter. Law of Credit Transactions
D. There must be transfer of possession of goods. Pledge, Real Mortgage and Chattel Mortgage
26. In the sale of thing pledged, where the proceeds of the sale are less than the amount due,
21. A agreed to sell B all the 100 bales of long staple Philippine cotton lying in his bodega. when can the pledgee recover the deficiency?
Unknown to both parties, the cotton had already been destroyed in an accidental fire. In this A. In the case of pawnshops.
case, the contract of sale is B. In case of pledge by operation of law.
A. Voidable, at the option of the buyer. C. If there is a stipulation allowing such recovery.
B. Voidable, at the option of the seller. D. The pledgee can never recover the deficiency.
C. Void, as the contract of sale is for specific goods.
D. Not void, as the contract of sale is for unascertained goods. 27. A pledge agreement allowed the pledgee to transfer the pledge shares in pledge’s name in
22. Where before making the contract of sale, the goods had perished without the knowledge of the corporate books if the pledger fails to remedy a payment default within thirty (30) days
the seller, the contract of sale is void if the contract is for the sale of from receipt of a written demand from the pledgee. Is the stipulation VALID?
A. contingent goods C. specific goods A. No, because it constitutes pactum commissorium.
B. future goods D. unascertained goods. B. Yes, because the transfer is only as act of administration.
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C. No, because it dispenses with the payment of taxes due on to the transfer. B. Stipulation to pay interest.
D. Yes, because the transfer is not automatic, i.e., only after pledger fails to pay during the C. Option to the drawer to pay in kind.
period. D. Option to the holder to require payment in kind.

28. B purchased a motor vehicle from S for P1,200,000, payable by a downpayment of P600,000 31. Which of the following exemplifies negotiation within the meaning of the Negotiable
and the balance in 12 monthly installments of P50,000 each. A chattel mortgage on the Instruments Law?
vehicle was executed to serve as security. B defaulted on the 7th and 8th monthly A. A promissory note executed by M in favor of P is indorsed and delivered by P to A.
installments. The chattel mortgage was foreclosed but the auction sale resulted into a B. A promissory note executed by M in favor of bearer is delivered by M to P for
deficiency of P100,000. safekeeping.
Under R.A. 1508, as amended, otherwise known as the Chattel Mortgage Law, in relation to C. A promissory note executed by M in favor of P or his order is delivered by P to A without
Article 1484 of the Civil Code, more popularly known as the Recto Law, what is the remedy of indorsement.
S to recover the deficiency? D. None of the above.
A. Cancel the installment sale.
B. No other remedy on the deficiency. 32. M made a promissory note payable to P or bearer. P specially indorsed the note to A. A also
C. File a collection suit for P100,000 against B. specially indorsed it to B. X stole the note from B and delivered it to C without any
D. Auction the other properties of B for P100,000. indorsement. Who may he held liable to C?
A. X only. C. M, P, A and X only,
29. Which of the following statements relative to the R.A. No. 1508, as amended, otherwise B. M and X only. D. M, P, A, B and X.
known as the Chattel Mortgage Law, is FALSE?
A. Aside from the Chattel Mortgage Registry of the Registrar of Deeds where the property is 33. M made a promissory note for P100,000 payable to P or order. P altered the amount by
located, registration shall also be made where the mortgagor resides if he resides in a increasing it to P150,000. P then endorsed it to A, and A to B, present holder in due course.
place other than where the property is located. Which of the following statements is CORRECT?
B. Where the parties executed a chattel mortgage on a building, they shall be bound to the A. M, P and A are liable to B for P150,000.
chattel mortgage contract. B. M, P and A are not liable to B for the material alteration.
C. Failure to execute the Affidavit of God Faith and to register the chattel mortgage contract C. M is not liable to B; P and A are liable to B for P150,000.
shall invalidate the mortgage. D. M is liable to B for P100,000; P and A are liable to B for P50,000
D. Registration of the chattel mortgage is made in the Chattel Mortgage Registry of the
Register of Deeds where the property is located. Bouncing Checks Law
34. Which of the following statements regarding BP22 is FALSE?
Insolvency Law A. Prosecution in a BP 22 case must establish that a written notice of dishonor was actually
received by the maker or drawer of the dishonored check.
Corporate Rehabilitation B. A drawer of a dishonored check may be convicted under BP 22 even if he had issued the
dishonored check for payment of pre-existing obligation
Negotiable Instruments & Bouncing Checks Law C. The constitutional guarantee that no person shall be imprisoned for non-payment of debt
Negotiable Instruments was held to be valid defense if a drawer or maker who issued a dishonored check upon
30. Which of the following statements renders an instrument not payable in sum certain for its presentation for payment.
money and hence non-negotiable? D. None of the choices.
A. Cognovits actionem.
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35. BP 22 uses the phrases “any check” and “a check” in defining the offenses sought to be C. Leo buying a van for the partnership from Joy who has no knowledge of Leo’s lak of
punished by it. Which of the following types of checks is NOT within the purview of the authority.
punitive provisions of BP 22? D. Butch buying rice from the partnership from Teddy who has no knowledge of Butch’s lack
A. Accommodation check. C. Corporate check. of authority.
B. Cashier’ check. D. Personal check.
40. Every contract of partnership having a capital of three thousand pesos or more, in money or
Law on Business Associations property shall appear in a public instrument, which must be recorded in the SEC. Failure to
Partnership comply with this requirement
36. When a partnership dissolves and winds up, of the following, who would be the LAST to A. Renders the contract of partnership void.
receive distribution of partnership assets? B. Renders the contract of partnership unenforceable.
A. The creditors of the partnership. C. Affects the liability of the partnership to third persons and the partnership has no legal
B. The partners in repayment of loans. personality.
C. The partners in repayment of profits. D. Does not affect the liability of the partnership to third persons and the partnership have a
D. The partners in repayment of capital legal personality.

37. W, X, Y and Z organized a general partnership with W and X as industrial partners and Y and 41. Which of the following statements relative to partnership and partners is INCORRECT?
Z as capitalist partners. Y contributed P5M and Z contributed P2M to the common fund. By A. A person who receives the profits is always a partner.
a unanimous vote of the partners, W and X were appointed managing partners, without any B. A person who receives the profit is not necessarily a partner.
specification of their respective powers and duties. A, applied for the position of Secretary C. The partnership comes into existence only thru an agreement.
and B, applied for the position of Accountant of the partnership. The hiring of A was decided D. The true test of partnership is the mutual agency, i.e., agency relationship among
by W and Z but was opposed by X and Y. Who of the applicants should be hired by the partners.
partnership?
A. A only. C. Both A and B. 42. X, Y, and Z are partners in XYZ Partnership, Ltd. With Y as limited partner. After five years
B. B only. D. Neither A nor B.. of operations, the partnership incurred debtor in favor of third persons totaling P5 million. The
total partnership asset is P3M. Who among the partners shall be liable with their separate
38. On the death of a partner, public notice of death is not given and the partnership continues property, in favor of creditors?
the business, then for the acts of the partnership done after his death, the estate of the A. X and Y for P1 million each.
deceases partner is B. X, Y and Z for P1 million each.
A. liable. C. proportionally liable. C. X, Y and Z depending upon their capital contribution.
B. not liable. D. treated as security D. X and Z for P1.5 million each because they were general partners.

39. Arnel, Butch, Leo, Danilo and Fred are partners in BIGATIN Company which is engaged in 43. A limited partner is prohibited on account of his claim against the partnership from performing
the buying and selling of rice. Arnel is the manager. Butch was also given a special power of the following acts, EXCEPT
attorney by the partnership to buy a van for the company. No other power was given to all A. Transact business with the partnership.
the partners. In which of the following acts or contracts is the partnership NOT bound by the B. To receive or hold as collateral security any partnership property.
act of the partner? C. To receive from a general partner or the partnership any payment, conveyance or
A. Arnel selling rice for the partnership. release from liability. If partnership liabilities to outside creditors.
B. Butch buying a van for the partnership from Flora. D. None of the choices.
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44. Where the money received from a third party by the partnership, in the ordinary course of D. Corporate creditors who do not belong to the corporation shall be preferred in payment
business, is misapplied by one of the partners to his own use, then the than corporate creditors who are also stockholders, members, directors, trustees or
A. third party has no remedy. officers of the corporation.
B. partnership is liable for the same.
C. partnership is not liable for the same. 49. The pre-emptive rights of stockholders in a corporation are not statutory rights, but are _____,
D. defaulting partner alone is liable for the same. and exist even no specific grant or recognition of such right is provided by a statutory law.
Which of the following answers best complete the statement.
45. Which of the following is an absolute duty of a partner in a partnership and cannot be A. common law rights. C. inherent rights.
excluded by an agreement to the contrary? B. implied rights. D. provided by the Corporation Code.
A. Duty to share losses equally.
B. Duty to indemnify for loss caused by negligence. 50. A corporation was organized for the purpose of engaging in the buying and selling of home
C. Duty to account for profits of a competing business. appliances. The act of buying and selling motor vehicles by the corporation would be
D. Duty to indemnify for loss caused by a partner’s fraud. A. Illegal per se. C. Ultra vires.
B. Intra vires. D. Unenforceable.
Corporation
46. Which of the following statements does NOT characterize a no-par value share? 51. One of the following is NOT an attribute of a close corporation?
A. It always has an issued value. A. A corporation vested with public interest cannot be organized as a close corporation.
B. It may be issued together with par value shares. B. A close corporation is deemed not a close corporation when at least 2/3 of its voting
C. It has not stated value appearing on the certificate of stock. stock is owned or controlled by another corporation which is not a close corporation.
D. It may be issued even if the subscription is not yet fully paid. C. Any stockholder may petition the SEC for the dissolution of the corporation by reason of
illegal, fraudulent, dishonest, oppressive or unfair acts of directors or officers, or
47. Which of the following acts could be ratified by a vote representing at least 2/3 of the misapplication of corporate assets.
outstanding capital stock? D. A stockholder may not, withdraw and demand that the corporation buy his shares at their
A. Acts of directors constituting an approval of patently unlawful acts. fair value which shall not be less than the par or issued value; provided that corporation
B. Acts of directors or trustees who are guilty of gross negligence or bad faith in directing has sufficient assets to cover its liabilities.
the affairs of the corporation.
C. Acquisition of a business opportunity which should belong to the corporation thereby 52. The corporate term if a stock corporation is that which is stated in the Articles of
acquiring profit which should belong to the corporation. Incorporation. It may be extended or shortened by an amendments of the Articles of
D. An attempt by a director to acquire an actual acquisition of any interest adverse to that of Incorporation when approved by a majority of the Board of Directors and
the corporation in respect of any matter reposed upon in confidence. A. approved and ratified by at least 2/3 of all stockholders.
B. the written assent of the stockholders representing at least majority of outstanding capital
48. Which of the following statements relative to the dissolution of corporation is FALSE? stock.
A. Liquidation involves the sale or conversion of all corporate assets into cash and payment C. the written assent of the stockholders representing at least 2/3 of the outstanding capital
of all liabilities. stock.
B. A corporation has only a period of five (5) years from the time is was dissolved within D. ratified at a meeting by the stockholders representing at least 2/3 of the outstanding
which to liquidate its affairs. capital stock.
C. Winding up involves the final distribution of whatever remains, if any, to the stockholders
as a return of their investment.
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53. The majority vote of the quorum of the board of directors and at least 2/3 votes of the 57. What vote is needed to consider every decision of the Board of Directors to be a valid
outstanding capital stock or members, as the case may be, shall be necessary for the corporate act?
approval of A. Two-thirds of the directors present at the meeting.
A. amendment of by-laws B. At least a majority of the directors present at the meeting.
B. issuance of stock dividends. C. Two-thirds of the directors present at the meeting at which there is a quorum.
C. amendment of articles of incorporation. D. At least majority of the directors present at the meeting at which there is a quorum.
D. none of the choices.
58. The corporation may deny the existence of the stockholders of his right to inspect over
54. The corporate existence of ABC Corporation expired on December 31, 2017. The business secrets or confidential matters base on the principle that
stockholders of ABC Corporation wishes to continue its operation and asked your advice A. the right to inspect being a common law right is absolute.
what legal action is required? What is your BEST advice? B. what every person can do himself, he has a right to designate another person to do it for
A. Establish a new corporation, since the corporation has no legal personality. him.
B. No action is required, as corporation shall have perpetual existence and hence, the C. the right to inspect should for a legitimate purpose that is protective of the interests of the
corporation shall continue its business operations. corporation.
C. File with the Securities and Exchange Commission (SEC) for an extension of the D. the exercise of the power to inspect can be exercised only in consonance with a
corporate term of the corporation for another fifty (50 years. germane to the property rights of the stockholders pertaining his shares of stock in the
D. Secure from the Securities and Exchange Commission a certificate of Revival of corporation.
corporate existence subject to all the requirements prescribed by the SEC.
59. Removal of directors by the stockholders may be without or without cause provided that
55. Can the SEC refuse to register a corporation on the ground that it is owned and controlled by removal without cause may not be used to deprive the minority stockholders of their
a single stockholder and the rest of the stockholders and mere nominees? A. appraisal right.
A. No, because there are nominees appointed. B. pre-emptive rights.
B. Yes, because the SEC is empowered to regulate all private corporations. C. right to file derivative suit against the majority stockholders.
C. No, because a corporation has personality separate and distinct from its stockholders. D. right of representation to which they maybe entitled under the law.
D. Yes, because it will not be consistent with the principle that a corporation has a
personality separate and distinct from its stockholder. 60. At the annual meeting of the Corporation for the election of five (5) directors as provided for in
its Articles of Incorporation, A, B, C, D, E, F and G are nominated. A, B, C, D and E received
56. The following statements pertaining to express powers of a corporation are presented to you the highest number of votes and were proclaimed elected. F received ten votes less than E.
for evaluation: Subsequently, E sold all his shares to F. At the next meeting of the Board, Directors both E
I. A domestic corporation may make donations for the benefit of a political party or and F appeared. Who is entitled to sit as member of the Board?
candidate or for purposes of partisan political activity provided and donations are A. E C. E and F
reasonable. B. F D. Neither E nor F
II. A corporation may enter into a partnership, joint venture, merger, consolidation, or any
other commercial agreement with natural and juridical persons. 61. L, M, N are equal stockholders of LMN Inc., a closely held corporation. All three are directors
A. B. C. D. but only L and M are corporate officers receiving salaries from the corporation. When N
Statement I False False True True complains that the corporation failed to pay dividends and “let him in the cold” L and M tell
Statement II False True False True him to “take a hike” – or sell your share to us for P35/share.” N is furious convinced his
shares are worth much more than P35/share. He asks for the corporation’s full financial
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record and documents related to indications by outside parties of an interest in buying in the D. The Board resolution is sufficient since the board of directors has the authority to
business or its shares? Does N have the right to inspect the records? approve the issuance of authorized shares, without stockholders vote.
A. N has the right to inspect those documents because he is a stockholder.
B. N does not have a right to inspect those documents as a stockholder, but only as a 65. Unless the by-laws provides otherwise, written notice of special meetings shall be send to all
director. stockholders of record at least
C. N has the right to inspect those documents because he is a stockholder, and seeking to A. 2 days prior to the meeting. C. 2 weeks prior to the meeting.
value the business and his shares is a legitimate purpose. B. 1 week prior to the meeting. D. 21 days prior to the meeting.
D. N does not have the right to inspect those documents because as a non-officer
stockholder, he may only request to see the articles of incorporation, by-laws and board 66. Unless the by-laws provides otherwise, written notice of regular meeting shall be send to all
minutes. stockholders of record at least
A. One week prior to the meeting. C. 14 days prior to the meeting.
62. An amendment in the articles of incorporation that would shorten the corporate term requires B. 2 weeks prior to the meeting D. 21 days prior to the meeting.
the approval of the
A. Majority vote of the board of directors/trustees and 2/3 vote of the outstanding capital 67. The following statements regarding dissolution of corporation by shortening its corporate term
stock/members. are presented to you for evaluation.
B. 2/3 vote of the board of directors/trustees and 2/3 vote of the outstanding capital I. Upon the expiration of the shortened term, as stated in the approved amended articles of
stock/members. incorporation, the corporation shall only be considered dissolved after its liquidation.
C. Majority vote of the board of directors/trustees and majority vote or written assent of the II. In the case of expiration of corporate term, dissolution shall take effect after the issuance
outstanding capital stock/members. of the Securities and Exchange Commission of a Certificate of dissolution.
D. Majority vote of the board of directors/trustees and 2/3 vote of written assent of the A. B. C. D.
outstanding capital stock/members. Statement I False False True True
Statement II False True False True
63. The stockholders, as owners of the corporation have the following rights expressly
recognized by the corporation law, EXCEPT the right Cooperatives
A. to elect and remove directors. 68. It is a type of cooperative that is organized for the primary purpose of providing a wide range
D. to receive dividends when declared. of financial services to cooperatives and theirs members.
C. to inspect corporate books and records. A. Cooperative bank. C. Financial service cooperative.
B. as a co-owner of the corporate property. B. Credit cooperative. D. Multi-purpose cooperative.

64. XYZ Corporation has 1,000,000 authorized voting shares of which 400,000 are outstanding. 69. Which of the following statements relative to the registration of cooperatives is FALSE?
The XYZ Board concludes that the corporation needs more capital and wants to issue A. A Certificate of registration shall be conclusive evidence that the cooperative is duly
another 500,000 shares. The Board adopts a resolution to this effect. What action is needed registered.
to make the adopted resolution binding, if there is any? B. In case of a denial of the application for registration, the cooperative has to file another
A. A vote of at least one stockholder since a plurality is enough. application for registration.
B. A vote of the majority of the outstanding shares (200,000 + 1) in a stockholders meeting. C. A cooperative acquires juridical personality from the date CDA issues a Certificate of
C. A vote of simple majority of the shares present at a properly convened stockholders Registration under its official seal.
meeting assuming there is a quorum. D. Application for registration is deemed approved if CDA failed to act on it within a period
of sixty (60) days from the date of filing.
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70. It is a principle expressly embodied in the Declaration of Policy of RA No. 9520, otherwise 74. What cannot be demanded at once?
known as the Cooperative Law of 2008, where the state recognizes the importance of the A. Obligations subject to a condition.
cooperative sector in initiating and regulating within its own ranks the promotion and B. Obligations subject to a resolutory period.
organizations, training and research, audit and support services relating to cooperatives with C. Agreements subject to a suspensive period.
government assistance where necessary. D. Deliverable subject to a resolutory condition.
A. Equity. C. Subsidiarity.
B. Proportionality. D. Sustainability. 75. Notwithstanding the provisions in the Cooperative Code to the contrary, the quorum
requirement for amendments of Articles of Cooperation and by-laws of Cooperative Banks
71. The following statements relative to liquidation and dissolution of cooperatives are presented shall be
to you for evaluation. A. three-fourths (3/4) vote of all the members with voting rights, present and constituting a
I. Upon the dissolution of the cooperative, the reserve fund shall be distributed among the forum.
members. B. Two-thirds (2/3) vote of all members with voting rights, present and constituting a
II. All subsidies, donations, legacies, grants, aids and other assistance from any local or quorum.
foreign institutions whether public or private shall be donated to the community where the C. twenty percent (20%) of all the members in good standing, present and constituting a
cooperative operates. quorum.
III. Payment of creditors shall be in accordance with the contract upon which it is based and D. One-half (1/2) plus one of the number of voting shares of all the members in good
the provision of the new Civil Code on the Preference and Concurrence of Credits. standing.
What is the correct evaluation?
A. B. C. D. 76. A, B, C, D, E, F and G, are the members of the board of directors of cooperative.
Statement I False False True True Unfortunately, E, F and G resigned for personal reasons. How shall the vacancies be filled-
Statement II False False True True up?
Statement III False True False True A. By the vote of at least ¾ of all the members with voting rights.
B. Vacancies shall be filled-up by the vote of all the remaining directors in a special
72. Which of the following statements relative to the Board of Directors of a cooperative is meeting.
FALSE? C. By the majority vote of the general assembly in a regular or special meeting duly called
A. Number of directors must not be less than five (5) nor more than fifteen (15). for the purpose.
B. Only member of a cooperative who has the right to vote is eligible for election as a D. Vacancies shall be filled-up by the vote of at least a majority of the remaining directors, if
director. still constituting a quorum.
C. The term of office of directors shall be fixed in the by-laws but not exceeding a term of
two (2) years. 77. All corporations registered with the Cooperative Development Authority (CDA) shall be
D. Any person engaged in business is similar to that of the cooperative, is qualified from required to submit annually a Cooperative Annual Progress Report (CAPR) with supporting
election as a director of said cooperative. documents with the CDA. Which of the following is NOT a supporting document to be
attached to the CAPR?
73. A promise to buy and sell a determinate thing for a price certain is A. Audited financial statements.
A. legally demandable. C. unilaterally demandable. B. List of officers and trainings undertaken/completed.
B. reciprocally demandable. D. All of the choices. C. Report on the total compensation of each of the directors and officers.
D. Social Audit report involving its program of activities pursuant to its socio-civic goals.

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78. The following statements relative to merger or consolidation of cooperatives are presented to Angelito Ramos (maintained in Branch 1) Demand Deposit P100,000
you for evaluation Angelito Ramos (maintained in Branch 2) Time Deposit P200,000
I. Cooperatives belonging to the different category can be parties to the merger of Angelito Ramos (maintained in Head Office) Demand Deposit P500,000
consolidation. ABC Bank was liquidated by the Bangko Sentral ng Pilipinas dueto financial reverses. How
II. The affirmative vote of at least three-fourths (3/4) of all members with voting rights, much is the UNINSURED deposits of Angelito Ramos?
present and constituting a quorum from each of the constituent cooperatives, at separate A. P400,000 C. P900,000
general representative assembly meetings shall be necessary for the approval of the B. P500,000 D. None of the choices.
Plan of Merger of Consolidation.
III. In case of merger or consolidation of the cooperatives, the constituent cooperatives shall Secrecy of Bank Deposits and Unclaimed Balances Law *
become a single cooperative which, in case of merger, shall be the survivor cooperative, 81. Under the Bank Secrecy Law, it prohibits any person from disclosing to any person any
and in case of consolidation, shall be the consolidated cooperative. information relative to the funds or properties belonging to the depositor in the custody of the
What is the correct evaluation? bank. Which of the following acts is NOT an EXCEPTION to this Rule?
A. B. C. D. A. Written permission or consent in writing by a depositor.
Statement I False False True True B. Upon order of the court in cases of plunder committed by public officials.
Statement II False True False True C. Upon order of the Commission of Internal Revenue in an application for compromise of
Statement III False True False True tax liability or determination a decedent’s gross estate.
D. Upon a subpoena issued by the Ombudsman concerning its fact finding investigation
79. ABC Multi-Purpose Cooperative provided you the following information on the results of its relative to the information provided by an anonymous complainant.
annual operations for calendar year ending December 31, 2018:
Interest income on loan P845,000 82. Under the Bank Secrecy Law, it prohibits any person from disclosing to any person any
Service fees 47,000 information, relative to the funds or properties belonging to the depositor in the custody of the
Membership fees 2,000 bank. Which of the following acts is an EXCEPTION to this rule?
Operating expenses 311,000 A. Oral permission or consent by the depositor.
Percentage declared by the Board: B. Upon order of the court in cases of estafa and falsification of official documents
• Allocation for interest on share capital 50% committed by public officials.
• Allocation for patronage refund 50% C. Upon order of the Commission of Internal Revenue in an application for compromise of
Total average share months P2,000,000 tax liability or determination of a decedent’s gross estate.
Based on the above information, compute the total statutory reserves to be deducted from the D. Upon a subpoena issued by the Ombudsman concerning its fact finding investigation
net surplus pursuant to provision of the Cooperative Code relative to the information provided by an anonymous complainant.
A. P87,450 C. P174,900
B. P116,600 D. P204,050 General Banking Law *

Law on Other Business Transactions AMLA Law *

PDIC Law * 83. The government agency granted the power to conduct an independent special examination of
80. Mr. Angelito Ramos maintained the following deposits at ABC Bank: banks and inquire into or examine deposit accounts of ailing banks in the event there is a
Name of Depositor Type of Deposit Balance finding of unsafe and unsound banking practice is
Angelito Ramos (maintained in the Head Office) Savings Deposit P100,000 A. Bangko Sentral ng Pilipinas.
Angelito Ramos (maintained in the Head Office) Time Deposit P500,000 B. Anti-Money Laundering Council.
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C. Securities and Exchange Commission. Corporate Governance

D. Philippine Deposit Insurance Commission. 89. Which of the following is NOT a responsibility of Audit Committees of publicly-listed
companies?
84. Which of the following “covered persons” under the AMLA, is supervised or regulated by the A. Monitoring Management.
Insurance Commission? B. Management Compensation.
A. Holding companies C. Pawnshops. C. Relations with the independent auditor.
B. Investment houses. D. Trust entities. D. Review corporate reporting procedures.

85. _____ refers to those accounts and funds and sources of which originated from and/or 90. Which of the following Board Committee of a publicly-listed company, is tasked to oversee
materially-linked to the monetary instruments or properties subject of the freeze order or an the periodic performance evaluation of the Board and its Committees as well as executive
order of inquiry management, and conducts an annual self-evaluation of its performance?
A. Anonymous accounts. C. Materiality-linked accounts. A. Audit Committee.
B. “In trust for” accounts. D. Related accounts. B. Risk Oversight Committee.
C. Corporate Governance Committee.
86. Some institutions may be used by criminals to transfer and hide illegal wealth. The D. Related Party Transactions Committee.
institutions are often located in counties with well-developed secrecy law and attractive tax
structures. These institutions are called 91. Which of the following is NOT a responsibility of the Chairperson of a publicly-listed company
A. Front companies. C. Shell companies. as contained under the existing Code of Corporate Governance?
B. Offshore banks. D. Trusts. A. Serves as the link between external operations and external stockholders.
B. Determines the corporation’s strategic direction and formulates and implements its
The New Central Bank Act * strategic plan on the direction of the business.
C. Guarantees that the Board receives accurate, timely, relevant, insightful, concise and
Intellectual Property Law clear information to enable them to make sound decision.
87. One of these statements relative to the ownership of patent is FALSE. D. Adopts a corporate governance policies and ensures that these are reviewed and
A. The patent belongs to the inventor, his heirs, or assigns. updated regularly and consistently implemented in form and substance.
B. The person who commissioned a work will own the patent.
C. When two or more persons jointly make an invention, the patent belongs to them jointly. 92. Which of the following is NOT a responsibility of the Chief Executive Officer of a publicly-
D. Even if the contract provides otherwise, the person who commissioned a work will own listed company under the existing Code of Corporate Governance?
the patent. A. Serves as the link between internal operations and external stockholders.
B. Builds the corporate culture and motivates the employees of the corporation.
88. Which of the following CANNOT be patented? C. Manages the Corporation’s resources prudently and ensures a proper balance of the
A. Aesthetic creations. same.
B. Anything which is not contrary to public order or morality. D. Facilitates discussion on key issues by fostering an environment conducive for
C. Plant variates of animal breeds or essentially biological process for the production of constructive debate and leveraging on the skills and expertise of individual directors.
plant and animals.
D. An improvement in mascots used in restaurants by the use of a device to move the facial
parts of the mascot.

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Data Privacy Act 98. In conducting customer due diligence, covered persons shall maintain a system of verifying
93. According to the Data Privacy Act of 2012, which of the following is the definition of the true identity of the client’s based on the
“processing of personal data”? A. Cognitive-based approach. C. Risk-based approach.
A. Any operation that can be performed on personal data. B. Principle-based approach. D. None of the choices.
B. Any operation that can be performed on personal data except erasing and destroying.
C. Only operations in which the personal data is used for the purposes for which it was 99. One type of risk is the risk of failed internal control processes, people and systems caused by
collected. external risk factors such as money laundering activities. If a covered person is unable to
D. Only operations in which the data is being shared on social media or transferred by email manage this risk effectively, it can result in exposure to legal action, reputational risks and
or otherwise through the internet. financial losses. This type of risk is known as
A. concentration risk C. operational risk
94. An electronic data message or electronic document is any electronic file providing information B. legal risk D. reputational risk
that is generated, sent, received, or stored by electronic, optical or similar means. Which of
the following is an example of electronic file providing information that is “sent or received by 100. Under RA No. 11032, it will act or serve as a repository of information on all registered
electronic means”? enterprises in the country that government agencies and LGUs may use as a resource for
A. Electronic mail. C. Telegram verification purposes.
B. Short message service (SMS) D. Word processing. A. Civil Service Commission.
B. Philippine Business Data Bank.
95. “Informed consent” is a lawful basis to process personal data under the Data Privacy Act of C. Department of Trade and Industry.
2012. The purpose of the processing for which consent is given should be documented. At D. Department of Information and Communications Technology.
what time in the process should the data subject’s consent be obtained?
A. After the purpose
B. Before the personal data is processed.
C. Before the personal data is published or disseminated.
D. Before the purpose specification is published or disseminated.

Other Topics
96. High yield but high-risk bonds issued by heavily indebted or financially weak corporations that
are desperately in need of additional capital are known as
A. Callable bonds. C. Guaranteed bonds.
B. Convertible bonds. D. Junk bonds.

97. Which of the following persons is EXEMPTED from registration with the SEC before he
engages in the business of buying and selling of securities in the Philippines?
A. Brokers and dealers.
B. Salesmen of broker or dealer.
C. Associated person of brother or dealer.
D. None of the choices.

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