UNIVERSITY OF CALOOCAN CITY

BACHELOR OF SCIENCE IN ACCOUNTANCY

MOCK BOARD EXAMINATION 2021

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTION

1. Which of the following is not correct?

A. If a person obliged to do something fails to do it, the same shall be executed at his cost
B. In reciprocal obligations, from the moment one of the parties fulfills his obligation, delay by the other begins
C. When the obligation consists in not doing, and the obligor does what has been forbidden him, it shall be
undone at his expense
D. The obligation to give includes that of delivering all its accessions and accessories even though they may not
have been mentioned

2. A promises to hear mass for 12 consecutive Sundays in order to receive P10,000 from B. A’s obligation is:
A. Civil C. Moral
B. Essential D. Natural

3. In which of the following obligations is specific performance not available

A. Obligation to do C. Obligation to give a specific thing
B. Obligation to give a generic thing D. Obligation to give support

4. When the debtor abandons and assigns all his properties in favor of his creditors for the latter to sell and satisfy
their credits, this is:
A. Application of payment C. Expromission
B. Dacio en pago D. Payment by cession

5. Statement A - Merger which takes place in the person of the principal debtor or creditor benefits the guarantors
Statement B - Confusion which takes place in the person of the guarantors does not extinguish the obligation
A. B. C. D.
Statement 1 True True False False
Statement 2 True False True False

6. On July 25, 2021, A obliged himself to give to B his agricultural land if B will pass the October 2021 CPA Board
Examination. On July 26, 2021, B orally sold the agricultural land to C and it is agreed that C will pay when B
effects the delivery. On October 2, 2021, one day before the first day of the CPA Board Examination, A put poison
on B's food requiring B's hospitalization resulting to B's failure to take the October 2021 CPA Board Examination.
As a result, which of the following is correct?
A. The sale to C is void because B did not fulfill the condition
B. B is entitled to the agricultural land hence, the sale to C is valid
C. C can demand the delivery of the agricultural land because the sale made by B is valid
D. The sale to C is enforceable because A voluntarily prevented B from fulfilling the condition

7. A, B and C are solidary debtors sharing at 2:3:5 respectively, of creditors W and Y sharing at 1:2, respectively. The
obligation amounts to Php 30,000 due on July 30, 2021. If on July 30, 2021 A paid Php 30,000 to W, which of the
following is correct?
A. A can recover from B and C the share which corresponds to each, with interest
B. A can recover from B and C the share which corresponds to each, without interest
 C. A can recover from B and C the share which corresponds to each, with interest only if it is stipulated
D. If B cannot, because of his insolvency, reimburse his share, such share shall be borne by A and C in equal
share

8. A pointed a gun and threatened to kill B if B will not sign a promissory note which reads "I promise to pay A,
P100,000". Out of fear, B signed the note. It turned out that two days earlier, A's obligation to B amounting to P
100,000 became due and B demanded payment. Now, A alleges compensation. Is A correct?
A. Yes, provided B will agree
B. Yes, because the promissory note is valid
C. No, because A's obligation does not exist
D. No, because the promissory note was signed only because there was intimidation

9. D is obliged to give E, at E's option, his Rolex watch, or his Cross ballpen or his diamond ring. The diamond ring
was forcibly taken by a robber and the watch by a snatcher. After D lost the watch and the ring, the ballpen likewise
could not be located despite diligent efforts to find the same. D could no longer remember where he kept the pen.
Hence, D failed to deliver any of the three items he promised. Is the obligation of D to E extinguished?
A. Yes, nothing remains practicable
B. No, E can demand the value of the last thing lost
C. Yes, fortuitous loss extinguishes all the alternative obligations
D. No, E can demand the value of anyone of the three items since he has the right of choice

10. A owes B P5,000. C is the guarantor of A. A was Able to pay B P3,000, thus leaving P2,000 unpaid. X, against the
will of A and without the knowledge of the partial payment made by A, paid B the sum of P5,000. How does this
payment affect the obligation?
A. X’s payment having been made against the will of A does not extinguish the obligation.
B. The obligation is extinguished. X can demand P2,000 from A, but if A cannot pay, X cannot ordinarily proceeds
against guarantor C because having paid against the will of A, X is not entitled to subrogation.
C. The obligation is extinguished. X, however cannot recover any amount from A since the payment was made
against the will of A. Instead, X can demand payment from C, the guarantor the amount of P5,000.
D. The obligation is extinguished. X, however can demand only P2,000 from A as this is the amount, which
benefited A. If a cannot pay, X, having been subrogated into the rights of B can proceeds against guarantor C.

11. Contracts that is made for a valuable consideration is

A. Essentially gratuitous C. Onerous
B. Gratuitous D. Onerous and gratuitous

12. In order that a stipulation in favor of a third person in a contract would be valid and binding upon the parties thereto,
three of the requisites are mentioned in the following enumeration.
Which of them is not a requisite?
A. There must be a stipulation in favor of a third person
B. The third person communicated his acceptance to the obligor before its revocation
C. The contracting parties must have clearly and deliberately conferred a favor upon that third person
D. That there must be an existing agency between either of the contracting parties and the third person

13. On July 15, 2021, X entered into a contract with Y. On February 10, 2022, X discovered that fraud was committed
at the time he entered into the contract, a fraud that vitiated his consent. The action for annulment shall be brought:
A. On February 10, 2017
 B. Within four years form February 10, 2022
C. Within three years from the time of the fraud
D. Within four years from the time A entered into the contract

14. A, with force and intimidation succeeded in having carnal knowledge of B. Later, with anger in her eyes, B
threatened to sue A if A will not marry her. Aware of the consequence of his act, A married B. The marriage is
A. Void, because the consideration for the marriage is illegal.
B. Valid, because the threat of B was founded upon a legal act
C. Unenforceable, because both were guilty of intimidating each other.
D. Voidable, because the consent of A was secured through intimidation

15. Rescission of contract can take place in this case:

A. When the seller cannot return the installments paid to him by the buyer.
B. When he who demands rescission can return whatever he may be obliged to restore.
C. When the party seeking rescission can perform only as to part as rescind as to remainder.
D. When the things which are the object of the contract are legally in the possession of third person who acted in
good faith.

16. X alleged that Y promised to give X one hectare of land. This is in consideration of X's meritorious service to Y. Y
pleads in defense that since the promise was not in writing, it is unenforceable under the Statute of Frauds. Decide
A. The promise is unenforceable because it is not in writing
B. The Statute of Frauds can apply to partially executed contract
C. The Statute of Frauds is applied because X has rendered services already
D. The Statute of Frauds is inapplicable here, because the promise to give the land is not a sale of real property.

17. Crisostomo donated a parcel of land to Anthony worth P50,000 in a public instrument on September 1, 2021.
Anthony accepted the same on the same day in a separate private instrument. When Anthony now seeks to
register the land in the Registry of Property, the latter refused the registration because the acceptance of the
donated property was not in a public instrument. In this case:
A. Anthony can compel the Registry of Property to register the land under, his name because the donation is
valid.
B. Anthony cannot compel the Registry of Property to register the land under his name because the donation is
void.
C. The donation is valid but the registration may be refused on the ground that the acceptance was not in a public
instrument.
D. The Registry of property committed a grave abuse of discretion in refusing the registration of the donated
property in question.

18. Michael Fermin, without the authority of Pascual Lacas, owner of a car, sold the same car in the name of Mr. Lacas
to Atty. Buko. The contract between Atty. Buko and Mr. Lacas is —
A. rescissible because the contract caused lesion to Atty. Buko.
B. void because of the absence of consent from the owner, Mr. Lacas.
C. valid because all of the essential requisites of a contract are present.
D. unenforceable because Michael Fermin had no authority but he sold the car in the name of Mr. Lacas, the
owner.

19. Case 1 – A hired B for P10,000 to kidnap C, and he paid B P5,000 in advance. Before B could kidnap C, A
relented and stopped B from performing the contract. The court may not allow A to recover from B the P5,000 paid
in advance.
 Case 2 – A, at gun point, compels B to marry him. Since the contract of marriage is voidable, either A or B has the
right to file the action for annulment. Determine whether:
A. B. C. D.
Case 1 False False True True
Case 2 False True False True

20. Mr. Enrico, a former government employee, suffered from severe paranoia and was confined in a mental hospital in
2015. After his release he was placed under the guardianship of his wife to enable him to get his retirement pay. In
2018, he became a mining prospector and sold some mining claims. In 2021, he sued to annul the sale claiming
that he was not mentally capacitated at that time of sale. The sale in question was:
A. Illegal C. Void
B. Valid D. Voidable

21. What are the implied warranties as to quality?

A. Implied warranties against latent defects
B. Implied warranties as to fitness and merchantability
C. Implied warranties against non-apparent servitudes
D. Implied warranties against eviction and hidden defects

22. Three of the following must be given by the seller to the buyer if redemption is to be made. Which is the exception?
A. The price
B. Damages
C. The expenses of the contract.
D. Necessary expenses made on the thing sold

23. Paul granted Joven the right to sell as an "agent" Paul bags in Luzon. Joven was obliged under the contract to pay
for the bags, at a discount of 10% as commission on the sale. The payment had to be made whether or not Joven
was able to sell the bags. The contract is one of:
A. Agency to buy C. Sale
B. Agency to sell D. Trust agreement

24. A wrote a letter to B wherein A offered to sell a piece of land to B for P200,000. B signified his desire to buy the
land. In A's letter, B was given a period of two (2) months within which to produce the P200,000. After 45 days, A
told B that price of the land is now P250,000. Can be compel A to accept the P200,000 first offered by A and
execute the deed of sale?
A. No, for B did not signify his acceptance of A's offer.
B. Yes, because A is already estopped by his signed letter.
C. Yes, because the period of two (2) months has not expired.
D. Yes, because there was actual meeting of the minds of the parties.

25. Manuel Corporation, which maintains a professional basketball team, entered into a contract with Armstrong
Rubber Company for the latter to provide a pair of rubber shoes to the formers two imported basketball players,
Charles Jordan and Barkley. Armstrong Rubber Company was instructed to a pair for either or both players in case
the company did not manufacture shoes of their size. No pair was, however, immediately available for both the
players. Charles Jordan, who is 6'5 tall and wears size 12 rubber shoes, was given a pair day from the 300 pairs
that Armstrong was in the process of manufacturing for its customers at the time the orders were received. Michael
Barkley, who is 7' tall and wears size 18 shoes, was provided three days later, with a pair that was specially made
for him since Armstrong does not make shoes of his size. What kind of contracts were entered into for the shoes
 provided to the two basketball players under the New York rule?
A. Both contracts are contracts of sale.
B. Both contracts are contracts for a piece of work.
C. The contract for the pair of shoes provided to Charles Jordan is a contract of sale, while that for Michael
Barkley is a contract for a piece of work.
D. The contract for the pair of shoes provided to Charles Jordan is a contract for a piece of work, while that for
Michael Barkley is a contract of sale.

26. A sold and delivered her diamond ring to B. It was agreed upon that within 10 days B would state and fix the price.
On the 10th day B called up by telephone A and stated the price as P20,000.00, which A agreed. Is the sale
perfected?
A. No, at the time of the sale, the price was not fixed.
B. Yes, at the time of the sale, the price was already known.
C. No, the price was left to the discretion of one of the parties.
D. Yes, the price stated and fixed by the buyer was accepted by the seller.

27. X sold to Y a fake Rolex watch on March 5, 2021. The watch was delivered to Y on March 26, 2021. On April 5,
2021, Y discovered that the watch he bought from X was an imitation. Under the law, Y has 4 years to annul the
sale as a voidable contract. May Y ask for the annulment of the contract on March 26, 2025?
A. No more because the action has already prescribed on March 5, 2025.
B. No because Y should be considered to have been in estoppel in buying the watch.
C. Yes because the period for prescription will have to be reckoned from April 5, 2021.
D. Yes because the prescription starts from the date of delivery of the watch, March 26, 2021

28. Which of the following statements regarding the contract of pledge is not correct
A. Pledge is an accessory contract because it needs a principal obligation to exist.
B. Pledge is a real contract because it is perfected by delivery of the thing pledged.
C. A pledge cannot be constituted unless the thing pledged is placed in the possession of the creditor.
D. A pledge cannot be constituted to secure the performance of a voidable or unenforceable or even a natural
obligation.

29. B purchased a specific car from S for P1,200,000 payable by a downpayment of P600,000 and the balance in 12
equal monthly installments of P50,000 each. A chattel mortgage on the said car was executed to serve as security.
B defaulted on the 7th and 8th monthly installments. The chattel mortgage on the car was foreclosed but the
auction sale resulted into a deficiency of P100,000. Under Recto Law, what is the remedy of S to recover the
deficiency?
A. Auction the other properties of B for P100,000.
B. Cancel the installment sale.
C. File a collection suit for P100,000 against B.
D. No other remedy on the deficiency.

30. In sale of personal property by installment, if the seller forecloses the chattel mortgage on the thing sold
A. He can recover the balance of the price
B. He can ask for a security from the buyer
C. He can compel the buyer to redeem the property
D. He cannot recover the balance of the purchase price.
31. D borrowed from C P50,000.00. The obligation is secured by a chattel mortgage on D's Toyota car. Subsequently,
D paid C P20,000.00. Unknown to D, T, a third person, pays C P50,000.00 believing that D still owed C such
amount.
A. T can recover nothing from D because he paid without the knowledge and consent of D.
B. T can recover P30.000.00 from D. If D cannot pay, T can foreclose the mortgage on D's Toyota car.
C. T can recover P50,000.00 from D. If D cannot pay, T can foreclose the mortgage on D's Toyota car.
D. T can recover P30,000.00 from D. If D cannot pay, T cannot foreclose the mortgage on D's Toyota car.

32. The following are functions of a negotiable instrument. Choose the exception:
A. As legal tender
B. As substitute for money
C. It increases credit circulation
D. It increases purchasing power in circulation

33. Which of the following is non-negotiable?

A. I bind myself to pay X or bearer P100,000. (Sgd.)Y
B. I promise to pay to the order of X P100,000. (Sgd.) Y
C. I agree to pay X or order P100,000 on demand. (Sgd.) Y
D. I acknowledge being indebted to X in the amount of P100,000. (Sgd.) Y

34. X executed a promissory note payable to the order of Y. Y negotiated the note to Z in this manner: "Pay to Z if he
will marry my daughter" (Sgd) Y. In this case:
A. Y will render himself primarily liable to Z
B. Z cannot further negotiate the instrument
C. X may pay Z without waiting for the fulfillment of the condition
D. The instrument is non-negotiable because the liability of X is subject to an uncertain event

35. Which of the following is not negotiable?

A. M promises to pay to the order of E P20,000 in installments.
B. M promises to pay to the order of E P230,000 with 5% interest thereon.
C. M promises to pay to the order of E P100,000 payable in dollars at the rate of exchange prevailing on April 30,
2021
D. M promises to pay to the order of E P35,000 in two equal installments, the first installment payable on July 5,
2021 and the second installment on or before Aug. 5, 2021.

36. What is the minimum number of days for maintaining a balance in the checking account to cover the check he
issued for the drawer to be exempted from conviction for violation of BP 22?
A. A period of at least 90 days from the maturity date of check
B. A period of at least 120 days from maturity date of check
C. A period of at least 150 days from maturity date of check
D. A period of at least 180 days from maturity date of check

37. What act may be presented by the maker or drawer of a check to destroy prima facie presumption of knowledge of
insufficiency of funds or credit as established by the preceding number?
A. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in
full by the drawee of such check within (10) banking days after receiving notice that such check has not been
paid by the drawee.
B. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in
full by the drawee of such check within (15) banking days after receiving notice that such check has not been
 paid by the drawee.
C. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in
full by the drawee of such check within (5) banking days after receiving notice that such check has not been
paid by the drawee.
D. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in
full by the drawee of such check within (20) banking days after receiving notice that such check has not been
paid by the drawee.

38. The following are characteristic of partnership except?

A. Aleatory C. Nominate
B. Bilateral D. Principal

39. Which of the following is not correct about universal partnership?

A. The nature of Universal partnership is like a donation.
B. Husband and wife may enter into universal partnership of all profit.
C. Articles of universal partnership, entered into without specification of its nature, only constitute a universal
partnership of profits.
D. A universal partnership of profits comprises all that the partners may acquire by their industry or work during
the existence of the partnership.

40. The following can demand true and full information of all things affecting partnership affairs from the other partner,
except:
A. Any partner
B. Partner's assignee of interest
C. Legal representative of a deceased partner
D. Legal representative of any partner under legal disability

41. Which of the following is not correct about partner's right over specific partnership property?
A. A partner's right in specific partnership property is not assignable.
B. A partner is co-owner with his partners of specific partnership property.
C. A partner's right in specific partnership property is not subject to legal support.
D. A partner's right in specific partnership property is not subject to attachment or execution even on a claim
against the partnership.

42. Alexis and Bote entered into a universal partnership of all present property. Both of them agree to include property
subsequently acquire as part of common fund. Subsequently, Alexis received a parcel of land by inheritance from
his father; and another parcel of land from "The Best Ito University" as remuneration for Alexis work as professor
therein.
A. The partnership is entitled to use the two parcels of land as usufructuary and also entitled to the fruits produced
by the property.
B. The two parcels of land and their fruits are to be enjoyed by the partnership because the contract entered is a
universal partnership of all present property.
C. The two parcels of land and their fruits will not be enjoyed by the partnership because Universal partnerships of
all present property comprise only ail present property.
D. With respect to the parcel of land received by Alexis from his father, the property is not to be enjoyed by the
partnership but only its fruits. However, with respect to the property received from Best Ito University, the land
and the fruits are to be enjoyed by the partnership,
43. A, B and C formed a partnership with the following as their contributions: A - P500,000.00 and parcel of land worth
P1,500,000, B - P300,000.00 p|us office equipment worth P150,000.00, and C - his services. The partnership
contract is oral. Therefore their contract of partnership is
A. rescissible C. void
B. valid D. unenforceable

44. A, B and C all are capitalist partners form a partnership and agree to have a total contributed capital of P30,000.
However, the partners failed to agree as to the extent of their respective share in the capital contribution. In this
case, which of the following statement is not correct:
A. A, B and C must contribute P10,000 each to the partnership.
B. If A, B and C mutually agreed that partner A will be excluded from the share in the losses, such agreement is
void.
C. The partnership contract is void because there is no agreement as to the capital contribution of each partner.
D. If A, B and C failed to stipulate on how to distribute profit and loss, the profit and loss will be distributed equally
between them.

45. X owes M P100,000.00 and he is also indebted to MNO Company in the amount of P400,000.00. M is the
managing partner of MNO Company and X's obligations are already due and demandable. X paid to M the amount
of P90,000.00 and M issued a receipt applying the payment to his personal credit. What shall be the right of the
partnership against M in this case?
A. Demand the full amount paid by X
B. Demand 80% or P72,000.00 out of the payment made by X
C. Demand 50% or P45,000.000 out of the payment made by X
D. None because M credited the payment to his personal credit

46. A, B and C are partners in an import and export business where customers desiring to place an order are required
to make a deposit of 30% to the partnership. T, a regular customer deposited P300,000 to partner A who, instead of
turning over the money to ABC partnership, misappropriated it for his own use. In this case:
A. T can only sue partners A, B and C jointly for P300,000.
B. T should sue alone A the misappropriating partner for the amount of P300,000.
C. T can sue A or B or C the partnership of ABC solidarity for the amount of P300,000
D. Correct remedy not indicated.

47. A and B are equal partners in AB Partnership by contributing P50,000.00 each on July 1, 2021. On July 2, 2021,
the partnership contracted an obligation to pay Z the amount of P180,000.00 on August 15, 2021. On August 1,
2021, C was admitted as a new partner. C contributed P50,000.00. How will the obligation be paid?
A. A, P90,000.00; B, P90,000.00; C, none
B. A, P60,000.00; B, P60,000.00; C, P60,000.00
C. A, P65,000.00: B, P65,000.00; C, P50,000.00
D. A, P180,000.00; or B, P180,000.00, and C, none

48. Which of the following attributes is not common to both a private corporation and a commercial partnership?
A. Succession
B. Income tax rate
C. Juridical personality
D. Can act though agents only

49. When may a corporation become a partner to another corporation?

A. All partners are managing partners and the articles of incorporation expressly allow it.
 B. The foreign corporation is a general party in a domestic limited partnership.
C. A joint venture is entered into that is not in line with its business.
D. None of the above.

50. Which of the following is a feature of share of stock?

A. It makes the stockholder a creditor of the corporation.
B. It is an incorporeal right.
C. It represents property of the corporation.
D. It requires a certificate of stock to vest ownership.

51. Which of the following cases may be approved by SEC for incorporation of there are five incorporators (A, B, C, D
and E)?
A. A, B and C are Filipinos residing in Canada; and D and E are American citizens residing in the Philippines.
B. A, B, C, D are over 21 years old; E is 16 years old.
C. A, B, C, and D are natural persons; E is a registered partnership.
D. A, B, C, and D are subscribers of 1 share; all the remaining subscriptions belong to E.

52. A corporation to be formed has an authorized par value capital stock of P8,000,000 divided into 80,000 shares @
P100 par value, and an authorized no-par value capital stock of 200,000 shares. Which of the following meets the
pre-incorporation subscription requirement?
A. On the par-value stock, 20,000 shares are subscribed and 5,000 shares thereof are paid; on the no-par value
stock, 50,000 shares are subscribed and 12,500 shares thereof are paid.
B. On the par-value stock, 40,000 shares are subscribed and 20,000 shares thereof are paid; on the no-par value
stock, 100,000 shares are subscribed and 50,000 shares thereof are paid.
C. On the par value stock, 20,000 shares are subscribed and 5,000 shares thereof are paid; on the no-par value
stock, 50,000 are subscribed and fully paid.
D. None of the above

53. What is the required vote for the amendment of articles of incorporation that would shorten the corporate term?
A. At least majority vote of the board of directors/members and at least majority vote of the outstanding capital
stock/members
B. At least majority vote of the board of directors/trustees and at least ¾ vote of the outstanding capital
stock/members
C. At least majority vote of the board of directors/members and at least 2/3 vote of the outstanding capital
stock/members
D. At least majority vote of the board of directors/members and at least 1/3 vote of the outstanding capital
stock/members

54. Which of the following amendments to the articles of incorporation requires for its approval at least majority vote of
the board of directors and the vote or written assent of at least 2/3 of the outstanding capital stock instead of
personal voting by at least 2/3 of the outstanding capital stock?
A. Amendment to decrease or increase capital stock
B. Amendment to increase the number of the sits in the board of directors
C. Amendment to incur bonded indebtedness
D. Amendment to reduce voting requirement in a close corporation

55. A, B, C, D, E, F and G are the members of the board of directors of a corporation. Unfortunately, E, F and G
resigned for personal reasons. How shall the vacancies be filled up?
A. The vacancies may be filled up by the majority of the board of directors.
 B. The vacancies shall be filled up by the majority vote of the stockholders in a regular or special meeting.
C. The vacancies shall be filled up by the vote of at least 2/3 of the stockholders in a regular or a special meeting.
D. None of the above.

56. A, B, C, D, E, F and G are the members of the board of directors of a corporation. Unfortunately, E, F and G were
removed from office due to fraudulent practices. How shall the vacancies be filled up?
A. The vacancies may be filled up by the majority of the board of directors.
B. The vacancies shall be filled up by the majority vote of the stockholders in a regular or special meeting.
C. The vacancies shall be filled up by the vote of at least 2/3 of the stockholders in a regular or a special meeting.
D. None of the above.

57. Which is false about the board of directors of a stock corporation?

A. A director must not have been convicted by a final judgment of an offense punishable by more than six (6)
years of imprisonment, or committed a violation of the Corporation code within five (5) years prior to the date of
election or appointment.
B. A director may be removed from office by a vote of the majority of the outstanding capital stock with or without
cause; provided, that removal without cause may not be used to deprive minority stockholders, who used
cumulative voting to elect such director, of the right of representation.
C. No director shall receive any compensation (other than reasonable per diems) as such, unless the same is
granted in the by-laws or but a vote of at least majority of the outstanding capital stock, provided, that the total
yearly compensation (excluding reasonable per diems and compensation as officers) shall not exceed ten
(10%) percent of the net income before tax of the corporation during the preceding year.
D. Additional qualifications may be provided in the by-laws as long as they are reasonable and not contrary to law.

58. X is a director owning 20% of the outstanding capital stock of ABC Corporation and 40% of DEF Corporation. The
corporations entered into a contract whereby ABC sold its commercial lot to DEF Corporation. The contract was
approved as follows: ABC Corporation – 15 directors in Articles of Incorporation; 6 out of 9 attending directors voted
in the affirmative including X; DEF Corporation – 11 Directors in Articles of Incorporation; 5 out of 7 attending
directors voted in the affirmative, including X. What is the status of the contract entered into by the two corporations
having interlocking director?
A. Perfectly valid
B. Voidable
C. Unenforceable
D. Void

59. An existing corporation which has an authorized capital stock of 40,000 shares @ P100 par value out of which only
10,000 shares have been offered for subscription which are now fully paid and subscribed. The corporation
increased its authorized capital stock by an additional 20,000 shares @ P100 par value. All the remaining unissued
shares are offered for subscription. To what extent is the pre-emptive right of X who owns 10% (1,000 shares) of the
corporation?
A. 2,000 new shares
B. 2,000 new shares and 3,000 original shares
C. 2,000 new shares and 4,000 original shares
D. None of the above

60. In which of the following cases is appraisal right not available?

A. Any amendment to the articles of incorporation that changes or restricts the rights of any stockholder or class
of shares.
 B. Merger or consolidation.
C. Investment of funds in another corporation or business for a purpose other than its primary purpose
D. Expiration of corporate term

61. Which is not a mode of involuntary dissolution of a corporation?

A. Legislative revocation of franchise
B. Judicial decree
C. Order of SEC
D. Expiration of corporate term

62. ABC Corporation is a foreign corporation doing business without license. ABC Corporation entered into a contract
with DEF Corporation, a domestic corporation who violated the contract. Which is correct?
A. ABC can sue DEF before Philippine courts without securing the necessary license.
D. ABC can never sue DEF before Philippine courts under all instances.
C. The contract between ABC and DEF is null and void.
D. ABC may secure the required license from SEC after the breach and then sue DEF afterwards.
63. Which activity is considered doing business in the Philippines?
A. A foreign corporation that is engaged in the manufacture of uniforms purchased soccer jerseys from the
Philippines.
B. A foreign corporation sold construction equipment in an isolated transaction.
C. A foreign insurance company issued a policy to the consignee of exported steel pipes.
D. A foreign subsidiary assumed the payment of the loan by a foreign corporation doing business in the
Philippines, and the subsequent acquisition by the former of the latter.

64. Under the Revised Corporation Code, may the corporation with a fixed term whose term has expired file an
application for revival of certificate of incorporation with SEC?
A. No because the corporation is ipso facto dissolved by operation of law upon failure to renew the term within the
deadline.
B. Yes a corporation whose term has expired may apply with SEC for the revival of its certificate of incorporation
and subject to all of its duties, debts, and liabilities existing prior to its revival.
C. No in the absence of court order.
D. Yes but only with the consent of the Congress of the Philippines.

65. Under the Revised Corporation Code, the addition of which in the corporate name will make the corporation
distinguishable?
A. If the name of the corporation contains the word “corporation”, “company”, “incorporated”, “limited”, or an
abbreviation of one of such words.
B. If the name of the corporation contains Punctuations, articles, conjunctions, contractions, prepositions,
abbreviations, different tenses, spacing, or number of the same word or phrase.
C. Either A or B
D. Neither A nor B

66. What is the status of contracts entered into by a de facto corporation?

A. Null and void and may be attacked by pointing the technical defects of the de facto corporation.
B. Voidable on the part of the other party.
C. Unenforceable against the corporation.
D. Valid and binding to protect members of the public who deal in good faith with a corporation who seems to be
properly authorized.
67. It refers to all persons who assume to act as a corporation knowing it to be without authority. It has no juridical
personality. It has no corporate existence and is not considered an artificial being in contemplation of Corporation
Code.
A. De facto corporation
B. De jure corporation
C. Corporation by estoppel or ostensible corporation
D. Corporation by nature

68. Under the Revised Corporation Code, it refers to a corporation that becomes continuously inoperative for a period of
at least five (5) years after its formal organization within the period provided by law?
A. Delinquent corporation
B. Deficient corporation
C. Delayed corporation
D. Defaulting corporation

69. Under the Revised Corporation Code, what is the period allowed by law to a delinquent corporation to resume its
operation from the notice given by SEC in order for SEC to lift the delinquency status of such delinquent
corporation?
A. Within 2 years
B. Within 1 year
C. Within 3 years
D. Within 5 years

70. What is the effect if a corporation has commenced the transaction of its business five (5) years from the date of its
incorporation but subsequently becomes continuously inoperative for a period of at least five (5) years?
A. The corporation is ipso facto dissolved by operation of law.
B. That shall be a non-automatic ground for suspension or revocation of corporate charter or corporate dissolution
making such entity a delinquent corporation.
C. The corporation is considered an ostensible corporation.
D. The corporation shall be criminally liable.

71. Under Revised Corporation Code, he refers to a person who, apart from shareholdings and fees received from the
corporation, is independent of management and free from any business or other relationship which could, or could
reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the
responsibilities as a director.
A. Independent director
B. Provisional director
C. Disloyal director
D. Rehabilitation receiver

72. Under the Revised Corporation Code, what are the duties to be performed by the directors or trustees?
A. Duties prescribed by law
B. Duties prescribed by rules of good governance
C. Duties prescribed by the by-laws of the corporation
D. All of them

73. Under Revised Corporation Code, when shall the election to fill-up vacancy in the board of directors/trustees be
held if the reason is due to expiration of term?
 A. It shall be held no later than the day of such expiration of term at a meeting called for that purpose.
B. It shall be held no later than 30 days after expiration of such term at a meeting called for that purpose.
C. It shall be held no later than 20 days after expiration of such term at a meeting called for that purpose.
D. It shall be held no later than 10 days after expiration of such term at a meeting called for that purpose.

74. If the interlocking director’s interest in one corporation is substantial (more than 20% of outstanding capital stock)
and his interest in the other corporation is merely nominal (20% or less of outstanding capital stock), then all the
requisites for contracts with self-dealing directors must all be present to be perfectly valid. If either of the first two
first requires are absent, the contract can by ratified by how many vote?
A. Owners of at least majority of the outstanding capital stock.
B. Owners of at least 2/3 of the outstanding capital stock in the corporation where the interlocking director has
nominal interest.
C. At least majority vote of the directors and at least 2/3 of the outstanding capital stock.
D. At least majority vote of the directors and at least majority vote of the outstanding capital stock

75. Unless provided by special law, what is the minimum paid-up capital of the authorized capital of one person
corporation (OPC)?
A. At least 25% of actually subscribed capital stock
B. At least 25% of minimum subscribed capital stock
C. At least 25% of actually subscribed capital stock or P5,000, whichever is higher
D. No minimum paid up capital of the authorized capital stock

76. The minimum number of natural persons required to organize a primary cooperative is:
A. 5 C. 15
B. 10 D. 20

77. It is a cooperative which is engaged in medical and dental care, hospitalization, transportation, insurance, housing,
labor, electric light and power, communication, professional and other services.
A. Service C. Labor
B. Health D. Professional

78. What is term of the members of the board of directors of a cooperative?

A. 1 C. 3
B. 2 D. 4

79. What is the required quorum during a meeting of the GA?

A. At least 25% C. At least 50%
B. At least 30% D. At least 50% Plus 1

80. The amount allocated to the optional, land and building and any other necessary fund of the cooperative shall not
be more than of the net surplus.
A. 10% C. 15%
B. 7% D. 20%

81. I: For cooperatives, no extension can be made earlier than 5 years prior to the original or subsequent expiry date
unless there are justifiable reasons.
II: All applications for registration shall be finally disposed of by the CDA within a period of 90 days from the filing
thereof, otherwise the application is deemed approved.
 A. Only the first statement is correct.
B. Only the second statement is correct.
C. Both statements are correct.
D. Both statements are incorrect.

82. I: Reports shall be filed with the CDA within 90 days from the end of the calendar year.
II: Duly registered cooperatives which do not transact any business with non-members or the general public shall
not be subject to any taxes and fees imposed under the internal revenue laws and other tax laws.
A. Only the first statement is correct.
B. Only the second statement is correct.
C. Both statements are correct.
D. Both statements are incorrect.

83. The kinds of membership in a cooperative are:

A. Regular and associate C. Ordinary and extra-ordinary
B. Regular and special D. Class A and Class B

84. In the case of primary cooperatives, regular meetings of the board of directors shall be held:
A. At least once a week C. At least twice a month
B. At least once a month D. At least once a year

85. Upon the winding up of the cooperative affairs, any asset distributable to any creditor, shareholder or member who is
unknown or cannot be found shall be given to the:
A. Government
B. Trustee
C. Any federation or union
D. Federation or union to which the cooperative is affiliated with

86. What is the effect of payment by PDIC of insured deposits to depositors?

A. PDIC may recover from the assets of the closed in so far as the payment made by PDIC is beneficial to
depositors.
B. PDIC shall be legally subrogated to all rights of depositor against the closed bank to the extent of such
payment.
C. PDIC may not recover from the assets of the closed bank if the payment is without the knowledge or against
the will of the closed bank.
D. PDIC may only recover from the assets of the closed bank if the payment is with the consent of the closed
bank.

87. Ana is a partner of ABC Partnership. She is also a stockholder of Ana Corporation Ana has the following deposit
accounts in a closed bank (BDO):
Ana’s Business (Sole Proprietorship) Checking Account – BDO-Pasig City branch P350,000
Ana Savings Deposit BDO-Taguig City branch 400,000
Ana and Bea and Carla and Dana Time Deposit BDO-Manila City branch 600,000
Ana and ABC Partnership Checking Account – BDO-Pasay City branch 500,000
Ana and Ana Corporation Checking Account – BDO-Makati City branch 200,000
Ana’s loan payable to BDO – Quezon City Branch (100,000)
What is the maximum deposit insurance coverage by PDIC in so far as Ana is concerned?
A. P525,000
B. P625,000
C. P800,000
 D. P1,000,000

88. Which of the following disclosures will be considered a violation of Philippine peso deposit secrecy law?
A. Reporting of unclaimed balances of a bank deposit to the Treasurer of the Philippines or Bureau of Treasury by
authorized bank officials.
B. Using of insider information about the bank deposits by bank employees in order to determine the credit rating
or credit standing of their depositors for purposes of offering credit cards.
C. Turn-over by authorized bank officials to the BIR Commissioner of the amount in bank accounts as may be
sufficient to satisfy the writ of garnishment issued to collect delinquent taxes.
D. Disclosure by a bank officer or employee upon order of a competent court in connection with a deposit in a
closed bank that was used in the perpetration of anomalies.

89. Which act is covered by Domestic Bank Deposit Secrecy Law a.k.a. R.A. No. 1405?
A. Disclosing the amount of deposit of a judgment debtor to the court sheriff who is executing a garnishment order
against him.
B. Disclosing the name of the drawer of a check to the payee.
C. Disclosing the amount of deposit of a taxpayer to a duly authorized BIR examiner who is examining his income
tax liability.
D. Disclosing the amount of deposit exceeding P500,000 in one banking day to Anti-Money Laundering Council.

90. It refers to a crime committed by any person who knowing that any monetary instrument or property represents,
involves, or relates to the proceeds of any unlawful activity, transacts, converts, transfers, disposes of, moves,
acquires, possesses or uses said monetary instruments or proceeds of any unlawful activity.
A. Estafa
B. Forgery
C. Money laundering
D. Bribery

91. Which of the following is not a predicate crime of Money Laundering Offense?
A. Swindling
B. Adultery
C. Fencing
D. Illegal recruitment

92. The following are predicate crimes that may authorize Anti-Money Laundering Council to inquire bank accounts
even without court order from Court of Appeals, except
A. Carnapping
B. Violation of Section 4, 5, 6, 9, 10, 11, 12, 13, 14, 15 and 16 of Comprehensive Dangerous Drugs Act
C. Hijacking
D. Kidnapping for Ranson

93. What is the quantitative threshold for reportable transactions involving foreign currency dealers, money dealers or
remittance company?
A. A transaction with amount exceeding P1,000,000
B. A transaction with amount exceeding P100,000
C. A transaction with amount exceeding P500,000
D. A transaction with amount exceeding P5,000,000
94. When is a Certified Public Accountant considered a covered person required to report covered transactions or
suspicious transactions to Anti-Money Laundering Council?
A. When he renders audit or review of historical financial statements or other assurance engagements.
B. When he provides management consultancy services.
C. When he acts as promoter rendering services for organization of contributions for the creation, operation and
management of companies.
D. When he provides tax advisory services.

95. How is a patent as an intellectual property or right created or protected by law?

A. By invention by the inventor
B. By registration with Intellectual Property Office
C. By notarization of the invention
D. By experimenting over the invention

96. On January 1, 2001, Steve Jobs invented the technology of Soft Touch which he registered in the Intellectual
Property Office of USA on January 1, 2001. On April 1, 2001, Juan Gaya also invented the same technology of Soft
Touch which he registered in the Intellectual Property Office of the Philippines on April 1, 2001. A certified copy of
Steve Job's application in USA was filed on June 1, 2001 to Intellectual Property Office of the Philippines. Who has
better right over the patent of the Soft Touch in so far as the Philippine jurisdiction is concerned?
A. Steve Job
B. Juan Gaya
C. Both Steve and Juan equally
D. None of them

97. Which of the following information is covered by the protection of Data Privacy Act?
A. Information about any individual who is or was an officer or employee of a government institution that relates to
the position or functions of the individual
B. Information about an individual who is or was performing service under contract for a government institution
that relates to the services performed, including the terms of the contract, and the name of the individual given
in the course of the performance of those services
C. Information about students enrolled in the College of Law or Graduate School
D. Information relating to any discretionary benefit of a financial nature such as the granting of a license or permit
given by the government to an individual, including the name of the individual and the exact nature of the
benefit

98. What is the obligation of National Privacy Commission regarding any personal information that comes to its
knowledge and possession?
A. It shall at all times ensure the confidentiality of such personal information.
B. It shall disclose such personal information without the consent of data subject.
C. It shall sell such personal information for commercial purposes.
D. It shall use such personal information for public persecution.

99. It refers to information generated, sent, received or stored by electronic, optical or similar means.
A. Mechanical data message
B. Electronic data message
C. Computerized data message
D. Binary data message
100. They refers to applications or requests submitted by applicants or requesting parties of a government office or
agency which only require ministerial actions on the part of the public officer or employee, or that which present only
inconsequential issues for the resolution by an officer or employee of said government office.
A. Simple transactions
B. Common transactions
C. Ordinary transactions
D. Normal transactions