MONDRIAAN AURA COLLEGE

Refresher Refresher 1
RegulatoryRegulatory Framework on Business Transactions
RFBT 001 RFBT 001

1. Which of the following contracts is unenforceable?

a. One of the contracting partners in incapable of giving consent.
b. Contract of lease of a car for two years orally entered into.
c. Oral contract of sale of land.
d. Mortgage contract in private instrument.

2. Which of the following constitutes an offer?

a. Business advertisements for sale.
b. Advertisements of bidders.
c. An offer made trough an agent.
d. Before acceptance is conveyed either of the parties dies, civilly infaerdicted, becomes insan or insolvent

3. 1st - There is acceptance of the offer only after it has come to the knowledge of the offerer,
2nd - Lesion or inadequacy of cause shall as a rule make contract defective.
a. Both statements are true c. Both statements are false
b. 2nd statement is true, 1st is flase d. First statement is true, second is false

4. 1st - If the cause is not stated in the contract it is presumed that it does not exist and therefore the contact is vo
2nd - In order that a contract may be voidable, there must be damage
a. Both statements are true c. First statement is false, second is true
b. Both statements are false d. First statement is true, second is false

5. The action to annul a voidable contract is extinguished by:

a. Novation b. Ratification c. Rescission d. Estopper

6. Which of the following contracts is not void ab inittio?

a. Those whose obkect is outside the corner
b. Those whose object did not exist at the time of transaction
c. Those which contemplate an impossible service
d. Those undertaken in fraud of creditors

7. Contract which cannot be sued upon unless ratified, thus it as if they have no effect yet:
a. Voidable b. Resciccible c. Void d. Unenforceable

8. Which of the following contract is valid?

a. Oral contract of agency giving authority to an agent to sell the land of the principal
b. Oral partnership agreement where immovable are contributed
c. Oral contract of sale of an immovable entered into by an agent who was given oral authority by the
 principal
d. Oral agreement to answer all the expenses for the wedding reception if A marries B

9. A sold B a genuine bottle of Fundador brandy. However, upon delivery the former substitued a fake.
B now wants ti annul the sale. Decide
a. The contracts is void ab inittio therefore it can be annuled
b. The contract can be annuled since it is voidable due to fraud
c. The contract cannot be annuled because it is only incidental fraud
d. There is dolo incidente therefore it can be annuled.

10. G was appointed as he guardian of M who owns a parcel of land valued as P1,000,000. M sold the land
only for P700,000 to b. The contract is defective because:
a. Unenforceable b. Rescissible c. Voidable d. Void

11. S was intimated by B to sell to the latte his parcel of land at a very low price. C, the creditor of S was thus
damaged since the former has no other means of collecting from S. The remedy of S:
a. Rescission c. Have a declared by the court as void
b. Annulment d. Reformation of the contract

12. Which of the following contracts must be in writing to be enforceable?

a. Acts of contract for the creation, transmission, modification, extinguishments of real rights.
b. The cession, repudiation, renunciation of heredity rights
c. Contract of quaranty
d. Contract of partnership

13. S made and offer to B for the sale of his car was received by the latter on January 2, 2001. On January 4, 2001
B sent a letter of acceptance by mail. On January3, 2001, S sent another letter to B withdrawing his offer
In this case:
a. There was a perfecred sale because of the acceptance of the offer by B before he had knowledge of
his withdrawal by S.
b. There was a perfected sale because S was estoppel from withdrawing his offer unless B had knowledge
thereof before acceptance
c. No slae took place because before acceptance was conveyed, the offer had been withdrawn
d. The offer as inneffective for lack of certainty as to the object.

14. S sold his parcel of land only for P1,000,000 although the value of the land is P2M. He thus suffered damafe
or lession in the sale due to inadequact of the price. Thereforem the contract is:
a. Viodable b. Unenforceable c. Valid, not defective d. Rescissible

15. 1st - In case of doubt, a contract reporting to be sale shall be constructed as motgage.
2nd - In annulment of contracts, there shall always be mutual restituition of both partners thereof
a. First statement is false, second is true c. Both are true
 b. Both are false d. First statement is true, second is false

16. 1st - Just like voidable and unenforceable contracts, rescissible contracts may alos be rattified.
2nd - In case of fraud or mistake, the action for annulment must be made within four years form the
commision of the vice president
a. Both statements are true c. First statement is true, second is false
b. Both statements are false d. First statement is false, second is true

17. 1st - An offer made by the principal is acceted from the time acceptance is conveyed to him or his agent
2nd - The object of a contract may be future things including future inheritance
a. Both statements are true c. First statement is true, second is false
b. Both statements are false d. First statement is false, second is true

18. 1st - A contract which is the direct result of a void contract is voidable
2nd - If the object of the contract did not exist at the time of the transaction, it is void. Therefore, this may
include sale future things.
a. First statement is true, second is false c. Both statements are true
b. First statement is false, second is true d. Both statements are false

19. S sold in writing to B his stereo set for P600. There is no delovery from A and no payment of the price
from B. Contract is:
a. Voidable b. Unenforceable c. Void d. Enforceable

20. 1st - If the words of the contract are cleas and leave no doubt on the intention of the parties, interpretation of
contracts may be proper
2nd - In case of gratuitious contracts, doubts shall be in favor of greatest reciprocity of interest.
a. The first statement is false, second is true
b. The first statement is false, second is true
c. Both statements are true
d. Both statements are false
es insan or insolvent

erefore the contact is void.

Unenforceable

uthority by the
M sold the land

itor of S was thus

01. On January 4, 2001

thdrawing his offer

ad knowledge of

ss B had knowledge

hus suffered damafe

ears form the

to him or his agent

herefore, this may

nt of the price

Enforceable

parties, interpretation of
MONDRIAAN AURA COLLEGE
Refresher 1
Management Advisory Services
MAS 001

1. It is an offer of service. When accepted or approved, it becomes a contractual agreement.

a. Confirmation letter c. Engagement letter
b. Contract d. Proposal Letter

2. CPAs in management advisory services practice must observe the ethical requirements the
accountancy profession except to,
a. Independence c Incompatible occupation
b. Contingent fees d. None of the above

3. Which of the following types of management services is not directly related to accounting and finance
finance functions?
a. Cost analysis of major investment decision c. Design installation or review of budgetary system
b. Long range planning d. Valuation of capital stock of companies for
purposes of mergeror sales

4. Which of the following types of management services is normally related to accounting and finance?
a. Management audit c. Costs determination of alternatives in collective
b. Marketing forecasts bargaining agreements
d. None of the above

5. Which of the following statements is not true?

a. In the rendition of MAS, independence must be observed so as to maintain the essential requisites of
impartiality and objectivity
b. All provisions of the Code od Professional Ethics are applicabel to the practice of MAS except those
rules related to expression of an opinion on financial statements.
c. MAS seves only in the areas of accounting and finance
d. Before accepring an engagement, a practitioner should notify the client of any reservations he has
regarding anticipateed benefits.

6. Which of the following is not a characteristic of management services?

a. A wider variety of assignments are encountered in MAS than in audit
b. MAS engagement are recurring
c. MAS pinpoint actions to be taken, the benefit of which will be received in the future.
d. In MAS engagements, the nature of work involved requires a lesser for junior assistance.

7. Which of the following is not a characacteriistic of MAS?

a. MAS is broad in scope
b. MAS involves problem-solving affecting future operations of the client
 c. Beneficiary if services as management
d. MAS repetitive as fas as the same client is concerend.

8. Which of the following is not a qualification of a CPA in MAS practice?

a. Familiarity with the client's financial accountingand internal control system.
b. Analytical experience in problem solving
c. Actual performance of management advisory device
d. All of these

9. Competence in management advisory services is acquired by:

a. Education c. Actual performance of management advisory service
b. Auditing and other experiences d. All of these

10. The following characteristices refer to Financial Accounting except:

a. Provides information to external users c. Has no externally imposed standards
b. Emphasizes on objective data d. Generates general purpose financial statements

11. That kind of accounting concerned with providing information to management in making decisions about
the operations of the business
a. Responsibility accounting c. Management Accounting
b. Cost Accounting d. Correct answer not given

12. The difference between variable costs and fixed costs is:
a. Variable costs per unit fluctuate and fixed costs per unit are variable
b. Variable costs per unit are fixed over the relevant range and fixed costs per unit are variable
c. Total variable costs are variable over the relevant rate and fixed costs in the long term, while fixed costs
never change
d. Variable costs per unit change in varying increments, while fixed costs per unit change in equal increments.

13. A CPA should reject management advisory services engagement if:

a. It would require him to make management decisions for an audit client
b. The proposed engagement is not accounting related
c. His recommendations are to be subjected to a review by the client
d. He audits the financial statements of a subsidiary of the prospective client

14. The following character is management advisory services, except:

a. Involves decisions for the future
b. Broader in scope and varied in nature
c. Unlike more junior staff than senior members of the firm
d. Relate to specific problems where expect help is required

15. A CPAs scope of management services is broad and covers all of the following, except:
a. Change in management engagements c. Audit engagements
 b. Computerization engagements d. Re-engineering engagements

16. A management advisory serices engagement generally involves the following activities in what order?
I. Post engagement follow up V. Preparing for and starting the engagement
II. Implementing the recommendation VI. Evaluating the engagement
III. Conducting the engagement VII. Preparing and representing the report and
IV. Negotiating the engagement recommendations

a. VII, VI, V, IV, III, II, and I c. IV, III, V, VI, II, VII, and I
b. III, IV, V, VI, VII, I and II d. IV, V, III, VII, II, VI, and I

17. As a consultant, the CPA practioners should

a. Exercise administrative control over the client's staff to avoid unnecessary delays in implementation
b. Encourage independence of the client on the consultant's staff so as to point clear responsibility in
impelenting system
c. Not take responsibility for making decisions and policy judgements in MAS engagements
d. Conduct his engagement as if he is a member of the client's organization

18. Which of the following is not a qualification of a CPA in MAS practice?

a. Familiarity with the client's financial accounting and internal control systems
b. Analytical experience in problem-solving
c. Professional independence, objectivity and integrity
d. Auditor of the client

19. Identify the following statements as true or false

Statement I: MAS principally involves the consultative services to management in his decision making
Statement II: MAS consultation, unlike MAS engagement, generally involves advise of information by a
CPA in which an analytical process is applied
Statement III: Because the CPA must be independent, he must not allow the client to participate in any
phase of his engagement

Statement I Statement II Statement III

a. 1 1 0
b. 0 1 0
c. 0 0 0
d. 1 0 0

20. Which of the following will not impair the independence of a CPA in the rendition of management services?
a. The CPA performs decision-making for his client
b. The CPA performs services wherein he is in effect acting as an employee of the client
c. The CPA losses his objectivity and acts in a manner as if he is advocating for the interest of his client
d. The CPA does not extend his services beyond the presentations of recommendations of giving of advice
and finance

of budgetary system
companies for

natives in collective

ntial requisites of

AS except those

vations he has
gement advisory service

financial statements

decisions about

m, while fixed costs

ge in equal increments.
n what order?
e engagement

g the report and

implementation
esponsibility in

s decision making
of information by a

o participate in any

agement services?

erest of his client

ns of giving of advice