ICARE RFBT Preweek (4) - Batch4

No. 125 Brgy.
San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com
iCARE Accountancy Review

Regulatory Framework for Business Transactions
Preweek Handout Four
1. Which of the following phrases means that the obligation is solidary?

I. Individually and collectively
II. Jointly or severally
III. Jointly and severally
IV. Jointly and individually
V. Jointly and separately
VI. Jointly and collectively
VII. Jointly and exclusively
VIII. Each to pay the whole value
IX. I promise to pay
X. We promise to pay
XI. Jointly and proportionately
XII. Jointly
XIII. Proportionately
A. I, II, III, IV, V, VI, VII, VIII, IX
B. I, II, III, IV, V, VI, VII, VIII, IX, X,
C. I, II, III, IV, V, VI, VII, VIII, IX, X, XI
D. I, II, III, IV, V, VI, VII, VIII, IX, X, XII
2. A and B are liable in the amount of P60,000 to C, D and E. How much may E collect from A under the following types of
obligations?
Mixed Joint Active Solidary Passive Solidary Mixed Solidary
A. P60,000 P20,000 P30,000 P10,000
B. P10,000 P30,000 P20,000 P60,000
C. P30,000 P20,000 P60,000 P10,000
D. P60,000 P30,000 P20,000 P10,000
3. A, B and C wrote and signed a promissory note which states “I promise to pay D P3,000.” At the maturity date of the note, D wrote
a letter to A condoning the obligation. How much obligation is extinguished by remission?
A. P3,000
B. P1,500
C. P1,000
D. P2,000
4. A and B wrote and signed a promissory note which states “I promise to pay C, D and E P6,000.” At the maturity date of the note,
how much may C collect from A?
A. P6,000
B. P2,000
C. P1,000
D. P3,000
5. A, B and C wrote and signed a promissory note which states “We promise to pay D P3,000.” At the maturity date of the note, A
paid P3,000 to D. If B becomes insolvent, how much may A ask for reimbursement from C?
A. P2,000
B. P1,500
C. P3,000
D. P1,000
6. A, a minor, B and C are liable jointly to D in the amount of P60,000. At the maturity date of the obligation, how much may D
validly demand from C if B becomes insolvent?
A. P20,000
B. P40,000
C. P60,000
D. P10,000
7. A, B and C are liable jointly and severally to D and E, solidary creditors, in the amount of P60,000. D wrote a letter to A remitting
the entire obligation which the latter also accepted in writing. Which of the following statements is true?
I. The whole obligation is extinguished.
II. E may ask P30,000 reimbursement from D.
III. A may ask P20,000 each reimbursement from B and C.
A. I only
B. I and II
C. I, II, and III
D. II only
8. A, B and C are liable jointly and proportionately to D and E in the amount of P60,000. E assigned back the obligation to A. How
much obligation is extinguished by confusion or merger?
A. P20,000
B. P30,000
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C. P10,000
D. P60,000
9. Angel promised to allow Jessie to use his car until the latter becomes a lawyer. What is the type of obligation?
A. Obligation with a suspensive condition
B. Obligation with a resolutory condition
C. Obligation ex die or with a suspensive period
D. Obligation in diem or with a resolutory period
10. Jerome delivered P1M cash to Sally as loan. Sally promises to pay his obligation as soon as possible. What is the nature of Sally’s
obligation?
A. Obligation with a suspensive condition
B. Void for being potestative upon the debtor
C. Obligation ex die or obligation with a suspensive period
D. Obligation in diem or obligation with a resolutory period
11. The debtor and creditor in the obligation is just one person.
A. Confusion
B. Compensation
C. Novation
D. Remission
12. The debtor and creditor are indebted to each other.

A. Confusion
B. Compensation
C. Novation
D. Remission
13. The old obligation is replaced by a new obligation.

A. Confusion
B. Compensation
C. Novation
D. Remission
14. What law shall govern dation en pago as a special mode of payment?
A. Law on Novation
B. Law on Obligation
C. Law on Sales
D. Law on Property
15. What is the prescriptive period of action based on quasi-contract such as negotiorum gestio and solutio indebiti?
A. 10 years
B. 5 years
C. 6 years
D. 4 years
16. A, B and C promised to deliver a Mitsubishi Montero Sport with plate number CPA-001 worth P900,000 to D. At the date of
maturity of the obligation, A and B are willing to perform the obligation but C refused to do so. What remedy is available to D to
this joint indivisible obligation?
A. File an action for specific performance against A, B and C plus damages.
B. File an action for specific performance against A only plus damages.
C. Ask the court to require third person to deliver a car plus damages at the expense of C.
D. Ask for indemnification for monetary damages amounting to P300,000 each from A and B and P300,000 plus
damages from C.
17. While on the way to deliver a specific diamond ring sold to B and P100,000 in payment of his debt to B, A (debtor) was robbed .
What is the effect of this to his obligation?
A. Extinguished as to P100,000 but not as to ring
B. Extinguished as to ring but not as to P100,000
C. Not for both as he suffers loss
D. The obligation to the ring and P100,000 are both extinguished.
18. While on the way to deliver an 18K diamond ring to B and P100,000 in payment of his debt to B, A (debtor) was robbed. What is
the effect of this to his obligation?
A. Extinguished as to P100,000 but not as to ring
B. Extinguished as to ring but not as to P100,000
C. Both obligations are not extinguished because generic thing never perishes.
D. The obligations to the ring and P100,000 are both extinguished.
19. Which of the following obligations may be subject to legal compensation?

A. Obligation of depositary in a contract of deposit
B. Obligation of bailee in a contract of commodatum
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C. Obligation arising from crime or delict

D. Obligation arising from contract of loan or mutuum
20. A is domiciled in Lipa City. He has an obligation to deliver a Honda Civic car with plate number CPA-002 to B, domiciled in
Makati City. The Honda Civic is located in Pasay City at the time of perfection of contract. Such car is found in Pasig City at the
agreed date of delivery. Where shall the said car be delivered by A to B?
A. Lipa City
B. Makati City
C. Pasay City
D. Pasig City
21. It refers to the theory being followed by the New Civil Code of the Philippines to determine the exact moment of perfection of
contract.
A. Cognitive theory
B. Expedition theory
C. Reception theory
D. Manifestation theory
22. What is the status of oral sale of specific forest land at a price of P10M made by national government to a private corporation?
A. Voidable
B. Unenforceable
C. Void
D. Rescissible
23. What is the status of oral sale of specific house at a price of P1M payable in 10 annual instalments when delivery of the land will
happen after 3 years but the buyer had already paid P100,000 arras money at the time of perfection?
A. Perfectly valid
B. Unenforceable
C. Null and Void
D. Voidable
24. What is the status of oral sale of specific cellphone at a price of P499 between an insane and a demented person?
A. Voidable
B. Unenforceable
C. Null and Void
D. Rescissible
25. A sold in writing a pair of specific authentic nike shoes to B at a price of P5,000. At the time of delivery, A delivered counterfeited
shoes. What is the status of the contract?
A. Voidable
B. Unenforceable
C. Null and Void
D. Perfectly valid
26. A and B are legally married but they have pre-nuptial agreement providing property regime of complete separation of property. A
sold in writing his particular cellphone to B after the latter pointed a gun to A at a price of P1,000 when its book value is still
P1,500. What is the status of contract of sale?
A. Voidable
B. Unenforceable
C. Null and Void
D. Perfectly valid
27. A is indebted in the amount of P1M to B. B filed an action for collection of a sum of money against A. The trial court judge issued a
writ of attachment against A’s property. Afterwards, A sold in writing his specific car to C at a selling price of P75,000 when its
book value is still P100,000. What is the status of contract of sale?
A. Voidable
B. Unenforceable
C. Null and Void
D. Rescissible
28. G, the guardian of M, a minor, leased a real property of M for three months at a monthly rent of P1,000 when the prevailing
monthly rent is P1,500. What is the status of the contract of lease?
A. Rescissible
B. Voidable
C. Unenforceable
D. Void
29. D is a judgment debtor in a civil action filed by C. The trial court issued a writ of attachment upon the motion of C. D's bank deposit
became the subject matter of garnishment. Afterwards, D sold in writing his specific car to B. What is the status of contract of sale
of car?
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A. Rescissible
B. Voidable
C. Unenforceable
D. Void
30. D, a demented person, and I, an insane person, entered into a written contract of sale of specific cellphone during the lucid interval
of the latter. What is the status of contract of sale of cellphone?
A. Rescissible
B. Voidable
C. Unenforceable
D. Void
31. H and W are legally married and are covered by property regime of complete separation of property. After the marriage, H pointed a
gun to W to compel the latter to donate her farm lot in writing. This prompted W to sign the private deed of donation of the farm lot
which H unilaterally prepared. What is the status of contract of donation of farm lot?
A. Rescissible
B. Voidable
C. Unenforceable
D. Void
32. P authorized A to sell his land. However, A leased out in writing the said land to T in the name of P. What is the status of the
contract of lease?
A. Rescissible
B. Voidable
C. Unenforceable
D. Void
33. B orally borrowed P1,000 from P. In order to secure the fulfilment of the loan, G orally guaranteed the payment of B's loan to P.
What is the status of the contract of guaranty?
A. Rescissible
B. Voidable
C. Unenforceable
D. Void
34. B and S orally entered into a contract of sale of specific cellphone at a price of P499 with delivery of cellphone and payment of the
price both to be made after two years from the date of oral agreement. What is the status of the contract of sale of cellphone?
A. Valid and binding
B. Voidable
C. Unenforceable
D. Void
35. Which of the following contracts is not covered by statute of fraud?

A. Executory contract of sale of house at a selling price of P400
B. Executory contract of lease of land for a term of two years at monthly rental of P300
C. Executory contract of sale of cellphone at a selling price of P500
D. Executory contract of subscription of common shares at price of P500
36. How shall doubt concerning the incidental circumstances of a onerous contract be resolved?
A. In favor of least transmission of rights
B. In favor of greatest reciprocity of interest
C. In favor of nullity of contract
D. In favor of the party who caused the obscurity
37. What is the status of contract if doubts are cast upon the principal object of the contract in such a way that it cannot be known what
may have been the intention or will of the parties?
A. Rescissible
B. Voidable
C. Unenforceable
D. Void
38. Which of the following contracts may become the subject matter of reformation of instrument?
a. Null and void contract
b. Last will and testament whether notarized will or holographic will
c. Simple donation inter vivos wherein no condition is imposed
d. Deed of pacto de retro sale actually intended as loan with equitable mortgage
39. Which of the following is not a characteristic of a contract of sale?

A. Reciprocal and Bilateral
B. Commutative and Onerous
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C. Nominate
D. Real
40. Reah entered into a contract for a particular wedding cake with Baker. It is Baker’s business to produce a cake to the general public
on the basis of the special request of the customer. What contract is entered into by Reah and Baker?
A. Contract of sale
B. Contract for a piece of work
C. Contract of barter
D. Contract of agency to sell
41. Ana orally sold his cellphone at a selling price of P10,000 to Bea who obliges to deliver a tablet worth P6,000 and additional cash of
P4,000. What is the contract entered into by Ana and Bea?
A. Contract of sale
B. Contract for a piece of work
C. Contract of barter
D. Contract of agency to sell
42. XYZ Company had an advertisement to make a bid. In the bidding, A became the highest bidder and B the lowest bidder. XYZ
Company accepted the bid of B as he has good relationship with the company. A complained to XYZ Company. Which of the
following statements is correct?
a. The advertisement of XYZ company is just a mere proposal to make an offer, thus it has the right to choose who
among the bidders will it accept.
b. XYZ is liable for damages to A company.
c. XYZ is bound to accept the bid of the highest bidder.
d. The contract is perfected from the moment of A’s acceptance of XYZ’s offer through its advertisement to bid.
43. Sale is valid between spouses,

A. When there is an agreement of complete separation of property between the spouses in their marriage.
B. When the spouses’ property regime is covered by conjugal partnership of gains.
C. When the spouses’ property regime is covered by absolute community of property.
D. When the spouses’ entered into contract of marriage before the effectivity of the Family Code.
44. Except for marriage settlements which may fix the property regime or relation of spouses during the marriage, what shall govern the
nature, consequences, and incidents of a contract of marriage?
A. Law
B. Good customs
C. Morality
D. Agreement and stipulations by contracting parties
45. On January 1, 2000, A sold his specific cow to B at a certain price of P10,000 to be delivered on February 28, 2000. On January
30,2000, the specific cow was forcibly taken by rebels from A. Which of the following is CORRECT?
A. A shall suffer the loss because the seller remains to be the owner of the cow before delivery. Therefore, B shall not
be required to pay the price.
B. B shall still pay the price because the fruits inures to his benefit before the delivery.
C. The contract of sale remains to be valid.
D. The obligation is not extinguished because robbery is not a fortuitous event.
46. On January 1, 2000, Anne sold his specific laptop to Bea in a private instrument wherein Bea already paid the price of P10,000. On
January 2, 2000, Anne sold again and afterwards delivered the said specific laptop to Carol who has no knowledge of the sale to
Bea. Carol has not yet paid the price of the laptop. Who has better right over the specific laptop?
A. Anne because Carol has not yet paid the price.
B. Bea because she is the first constructive possessor in good faith.
C. Bea because she is the first payer of the laptop.
D. Carol because she is the first possessor in good faith.
47. On January 1, 2000, ALI sold in a notarized document a land registered under Torrens System to A. On January 2, 2001, ALI sold
again the same land to B under a notarized deed of sale. B registered the deed of sale to Registry of Property on the same date. On
January 3, 2001, ALI sold again the same land to C under a private deed of sale. C took physical possession of the land on the same
date. Who has better right over the land assuming all buyers have no knowledge of sale to one another?
A. B because he is the first registrant of deed of sale of immovable in good faith.
B. A because he is the first constructive possessor in good faith of the immovable sold.
C. C because he is the first physical possessor in good faith of the immovable sold.
D. A because B and C are guilty of bad faith.
48. Angel sold his specific car to Bez at instalment price of P100,000 payable in 10 equal monthly instalments starting January 1, 2000.
As security for the payment of the price, Bez executed a contract of chattel mortgage over the said car in favor of Angel. The
contract of sale provides that in case of cancellation of contract of sale, the instalments already paid by Bez will be forfeited in favor
of Angel. The contract of chattel mortgage provides that Angel may recover the deficiency in case of chattel mortgage foreclosure.
After payment of seven monthly instalments, Bez defaulted on the remaining instalments. If Angel opted to foreclose the chattel
mortgage over the car which resulted to net proceeds of P25,000 in public auction, which is correct?
A. Angel can never recover the deficiency despite the stipulation for recovery in the contract of chattel mortgage.
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B. Angel can recover the deficiency because there is stipulation for recovery.
C. Angel may still file an action for exact fulfilment to recover the deficiency after the foreclosure of chattel mortgage over
the car.
D. Angel may recover the deficiency if the judgement provides.
49. Using the same data in preceding number except from the fact that Angel opted to file an action for exact fulfilment which resulted
to issuance of writ of attachment. Afterwards, the public sale resulted to net proceeds of P25,000. Which is correct?
A. Angel can never recover the deficiency despite the stipulation for recovery in the chattel mortgage.
B. Angel can recover the deficiency because there is stipulation for recovery.
C. Angel can still foreclose the chattel mortgage to recover the deficiency.
D. Angel may recover the deficiency even without stipulation for recovery.
50. Using the same preceding number except from the fact that Angel opted to cancel the contract of sale. Which is correct?
A. Angel must return the whole amount of P70,000 to Bea despite the agreement of forfeiture in case of cancellation.
B. Bez shall be entitled to retain the car.
C. Angel may be entitled to P70,000 already received if that is not unconscionable in the judge’s discretion but he no
longer has any right of recourse against Bez.
D. Angel may still file an action for specific fulfilment after the cancellation of the contract of sale.
51. It refers to the right of a a co-owner, adjoining rural lot owner or adjoining urban lot owner to repurchase the land sold by a co-
owner, adjoining rural lot owner or adjoining urban lot owner as expressly authorized by law.
A. Legal redemption
B. Legal pre-emption
C. Conventional redemption
D. Voluntary redemption
52. In which of the following instances are the goods still in transit, therefore, will allow the unpaid seller to exercise his right of
stoppage in transitu in case the buyer becomes insolvent?
A. If the buyer obtains delivery of the goods before arrival at the appointed destination.
B. If the carrier or other bailee acknowledges to the buyer or his agent, that he is holding the goods in his behalf, after arrival
of the goods at their appointed destination.
C. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer or his agent.
D. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the
seller has refused to receive them back.
53. S promised to sell his car to B for P1,000,000 giving B one month to decide whether to buy or not. B accepts the promise and gives
a consideration of P10,000 for the one month period. Which of the following statements is correct?
A. If B decides to buy the car, he must pay P1,000,000 to S because the P10,000 he has previously given is an option
money.
B. Contract of sale is perfected upon the payment by B of the P10,000 money.
C. S may sell the car to other persons within the one month period without incurring any breach of contract because there is
no contract to speak of.
D. The P10,000 previously given by B is an arras money.
54. B purchased the car of S for P1,000,000 payable within 20 days from the date of sale. As a downpayment, B gives S P10,000 upon
the execution of their agreement. Which of the following statements is correct?
A. The contract perfection is option contract.
B. The P10,000 previously given by B is an option money.
C. B must pay S P1,000,00 on the 20th day.
D. B is only required to pay P990,000 to S on the 20th day because the P10,000 given is an earnest or arras money.
55. A borrowed P1M from B. A mortgaged his land to secure the fulfilment of the contract of loan. The real estate mortgage contract
provides that B will become the automatic owner of the land upon default of A and. At the maturity date of the loan, A defaulted. B
foreclosed the real estate mortgage and tried to sell it in public auction. Two public auctions were held, but there were no bidders.
Which is correct?
A. B may appropriate the land since it is not sold in the first and second public auctions.
B. B becomes the owner of the land upon default of A since that is provided in the contract.
C. A is no longer liable to pay the loan since the land is not sold in the first and second public auctions.
D. A remains to be the owner of the land and remains to be liable to B.
56. A borrowed P10,000 from B with G serving as guarantor and P serving as pledgor of his laptop. At the date of maturity of the loan,
G remitted in writing the guaranty of G. Which is correct?
A. The contract of loan is extinguished.
B. The contract of pledge is extinguished.
C. The contract of guaranty cannot be extinguished by remission.
D. Both contracts of loan and pledge are not extinguished.
57. A and B borrowed P10,000 from C. In order to secure the debt, A pledged his cellphone worth P5,000 to C while B pledged his
laptop worth P5,000 to C. At the maturity date of the loan, A paid P5,000 to C. Which is correct?
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A. A may ask for the return of the laptop.

B. A may ask for the return of the cellphone.
C. The contract of loan is fully extinguished.
D. Neither A nor B may ask for the return of cellphone or laptop.
58. The following are automatic causes of dissolution of a general partnership, except
A. By the death of any partner
B. By the insolvency of any partner or of the partnership
C. By the civil interdiction of any partner
D. By the termination of the definite term or particular undertaking specified in the agreement
E. By the insanity of a partner as declared in any judicial proceeding
59. The following are causes of dissolution of a general partnership which still require decree of court, except
A. When a partner becomes in any other way incapable of performing his part of the partnership contract
B. When a partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business
C. When a partner wilfully or persistently commits a breach of the partnership agreement
D. When business of the partnership can only be carried on at a loss
E. When a partner withdraws or retires at any time
60. What is the nature of a limited partner’s interest in a limited partnership?

A. Assignable
B. Not assignable
C. Waivable
D. Not waivable
61. A, B, C, D and E are partners in ABC limited partnership. Both C and D are limited partners while E is an industrial partner. D is
appointed as managing partner. The partnership became insolvent. Unpaid partnership liabilities amounted to P6M after exhaustion
of partnership’s assets. How much may the unpaid partnership creditor collect from the partners?
A. P1.2M each from A, B, C, D, and E.
B. P3M each from A and B.
C. P2M each from A, B and E.
D. P1.25M each from A and B.
62. Using the same data in the preceding number, how much is ultimately shouldered by the partners from the said unpaid liabilities of
the partnership?
A. P1.2M each by A, B, C, D, and E.
B. P3M each by A and B.
C. P2M each by A, B and E.
D. P1.2M each by A and B.
63. A, B, C and D are partners in AB general partnership. A, B and D are capitalist partners while C is an industrial partner. D is
exempted by partnership agreement from liability to third persons. The partnership became insolvent. Unpaid partnership liabilities
amounted to P6M after exhaustion of partnership’s assets. How much may the unpaid partnership creditor collect from the partners?
A. P1.5M each from A, B, C and D.
C. P2M each from A, B and D.
D. P2M each from A, B and C.
64. Using the same data in the preceding number, how much is ultimately shouldered by the partners from the said unpaid liabilities of
the partnership?
A. P1.5M each from A, B, C and D.
C. P2M each from A, B and D.
D. P2M each from A, B and C.
65. A, B and C are partners in AB limited partnership. A and B are general partners while C is a limited partner. The partnership
became insolvent. Unpaid partnership liabilities amounted to P6M after exhaustion of partnership’s assets. How much may the
unpaid creditors collect from the partners?
A. P2M each from A, B and C.
C. P6M each from A or B or C.
D. P6M each from A or B.
66. A, B and C are partners in ABC general partnership. While driving to a partnership’s client, A, the managing partner, accidentally
bumped a pedestrian which resulted to civil damages amounting to P6M. The partnership became insolvent. The civil liability to
such pedestrian remained unpaid. How much may the pedestrian collect from the partners?
A. P2M each from A, B and C.
C. P6M either from A or B or C with right of recourse against A.
D. P6M each from A or B.
67. When a new partner is admitted,
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A. He is liable to obligations incurred before his admission up to the extent of his separate assets when there is
stipulation to that effect and he is liable up to the extent of his separate assets to obligations incurred after his
admission even without stipulation.
B. He is liable to obligations incurred before and after his admission up to the extent of his separate assets only when there is
stipulation to that effect.
C. He is liable to obligations incurred before his admission up to the extent of his separate assets even without stipulation to
that effect and he is liable up to the extent of his separate assets to obligations incurred after his admission when there is
stipulation to that effect.
D. He is liable to obligations incurred before and after his admission up to the extent of his separate assets even without
stipulation.
68. A, B, C, D and E are general partners in ABCDE Partnership. E is appointed as managing partner in the Articles of Co-partnership.
Which of the following statements is correct?
A. E may be removed as managing partner by the vote of controlling partners but only if there is valid cause for
removal.
B. E may only be removed by the vote of all partners including the managing partner regardless of the reasons.
C. E’s decision on acts of management may be reversed by the majority vote of the partners even if E acted in good faith.
D. Majority vote of all partners is necessary for act of administration.
69. A, B, C, D and E are general partners in ABCDE Partnership. E is appointed as managing partner in a separate document other than
the articles of co-partnership. Which of the following statements is correct?
A. E may be removed as managing partner by the vote of controlling partners regardless of the reasons.
B. E’s decision on acts of management requires ratification of the majority of the partners to be valid.
C. E’s decision on acts of management may not be reversed by the majority vote of the partners if E acted in good faith.
D. Majority vote of all partners is necessary for act of administration.
70. A, B, C, D and E are general partners in ABCDE Partnership. No one is appointed as managing partner. Which is correct?
A. All the partners shall be considered agents and whatever any one of them may do alone shall bind the partnership.
B. Unanimous vote is necessary for the validity of an act of management.
C. The vote of controlling partner shall prevail in case of dispute in act of management.
D. Majority vote is enough for act of strict dominion.
71. He refers to a partner who is not known to be a partner and does not participate in the management of the partnership.
A. Silent partner
B. Secret partner
C. Dormant partner
D. Ostensible partner
72. A owed XYZ, whose managing partner is B P5,000. A also owed B P10,000. A paid 4,500 to B and B receipted the whole amount
in his own name. Which is correct?
A. The P4,500 payment shall be applied as follows: P1,500 for debt to the partnership and P3,000 for debt to B.
B. The P4,500 payment shall be applied in full to B’s credit.
C. The P4,500 payment shall be applied in full to partnership’s credit.
D. The P4,500 payment shall be applied as follows: P3,000 for debt to the partnership and P1,500 for debt to B.
73. A owed XYZ, whose managing partner is B P5,000. A also owed B P10,000. A paid 4,500 to B and B receipted the whole amount
in XYZ’s name. Which is correct?
A. The P4,500 payment shall be applied as follows: P1,500 for debt to the partnership and P3,000 for debt to B.
B. The P4,500 payment shall be applied in full to B’s credit.
C. The P4,500 payment shall be applied in full to partnership’s credit.
D. The P4,500 payment shall be applied as follows: P3,000 for debt to the partnership and P1,500 for debt to B.
74. A is indebted to the partnership for 9,000. B is the managing partner and C is another partner, to whom A is also indebted for
P3,000. A paid the P3,000 to C and C receipted the payment in his own name. Which is correct?
A. The payment of A is fully applied to the obligation to C.
B. The payment of A shall be applied as follows: P2,250 to partnership’s credit and P750 to C’s credit.
C. The payment of A shall be applied as follows: P750 to partnership’s credit and P2,250 to C’s credit.
D. The payment is fully applied to the obligation to the partnership.
75. Equitable-Bank and PCI-Bank combined which resulted to formation of new corporation named Equitable-PCI Bank. What is the
type of this business combination?
A. Merger
B. Consolidation
C. Joint venture
D. Joint operation
76. Henry Sy owns 90% of common stocks of SM Prime. On the other hand, SM Prime owns 80% of common stocks of SMDC. Henry
Sy is an interlocking director of both corporations. If SMDC becomes insolvent, which of the following is true?
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A. SMDC’s unpaid creditors can absolutely go after the assets of SM Prime because the parent corporation and subsidiary
corporation are considered one.
B. SMDC’s unpaid creditors can absolutely go after the separate assets of Henry Sy because SMDC is a mere alter ego of
Henry Sy.
C. Henry Sy and SM Prime are not generally liable to SMDC’s unpaid creditors because of the doctrine of separate
juridical personality and limited liability rule.
D. Henry Sy and SM Prime are generally liable because of the doctrine of piercing the veil of corporate fiction.
77. SMC Inc. owns 90% of common stocks of Magnolia Co. All the inventories of SMC Inc. are produced directly by Magnolia Co.
Aside from that, Magnolia pays the obligations of SMC Inc. to the suppliers. All the business operations of SMC Inc. are conducted
using the assets and facilities of Magnolia Co. If Magnolia Co. becomes insolvent, which of the following is true?
A. Magnolia Co.'s unpaid creditors can absolutely go after the assets of SMC Inc. because stockholders are solidarily and
subsidiarily liable for the unpaid creditors of the corporation.
B. Magnolia Co.'s unpaid creditors may go after the separate assets of SMC because the facts indicate that Magnolia
Co. is a mere alter ego or mere instrumentality of SMC Inc. that will warranty the piercing of the veil of corporate
fiction.
C. Magnolia Co.'s unpaid creditors can never go after the separate assets SMC Inc. because of the principle of doctrine of
separate juridical personality and limited liability rule.
D. Magnolia Co.'s unpaid creditors can always go after the separate assets of SMC Inc. because piercing the veil of corporate
fiction is a substantive right that may be availed by the unpaid creditors in case of insolvency of a corporation.
78. Which of the following need not have a legislative grant for it to be bound by a contract?
A. De jure corporation
B. De facto corporation
C. Corporation by estoppel or ostensible corporation
D. Corporation by aggregate
79. Which corporation need not file an article of incorporation or need not have a legislative grant to obtain juridical personality?
A. De jure corporation
B. De facto corporation
C. Corporation sole
D. Corporation by prescription
80. Incidental power of a corporation refers to a power that attaches to a corporation at the moment of its creation without regard to its
express power or primary purpose. It arises from its being a juridical personality engaged in business. Which of the following is an
incidental power of a private corporation?
A. Right to sue and be sued
B. Right of declare dividends
C. Right to enter into merge or consolidation with another entity
D. Right to make donation to politician or political party
81. Which of the following best describes the concept “strong juridical personality” of a corporation?
A. Limited liability
B. Right of Succession
C. Centralized management
D. Trust fund doctrine
82. Some shareholders want to elect 3 directors. 5 directors are needed to be elected. Assuming the corporation has 440 outstanding
shares, how many shares are needed to elect the 3 directors?
A. 201
B. 200
C. 1200
D. 240 (although the minimum required is only 222) = (((440/5+1)) + 1 ) x 3)))
83. The corporation has 100 shares and the owners of 70% tried to elect their assured sits in the 5-sit board of directors based on the
ratio of ownership. How many will be elected from the majority stockholders (70% of the company) and from the minority
stockholders (30% of the company)?
A. 4 from the majority stockholders and 1 from the minority stockholders
B. 3 from the majority stockholders and 2 from the minority stockholders
C. 5 from the majority stockholders and none from the minority stockholders
D. 2 from the majority stockholders and 3 from majority stockholders
84. Pending determination of the legal heir(s), the "executors, administrators, receivers and other legal representatives duly appointed
by the court
A. May attend and vote in behalf of the stockholders or members without need of any written proxy.
B. May attend and vote in behalf of the stockholders or members with a need of a written proxy.
C. May not vote during the pendency of the estate proceedings.
D. May not vote if the estate tax has not been properly paid to BIR.
85. Under Old Corporation Code, what is the effect of the expiration of the corporate term without having renewed within the period for
renewal provided by law?
A. The corporation is ipso facto dissolved by operation of law as soon as the time for renewal expires.
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B. The corporation is ipso jure dissolved by legislative enactment.

C. The corporation will only be dissolved by a court order.
D. The expiration of the term is a mere ground for court-order corporate dissolution.
86. It refers to a type of corporation which is owned by stockholders not exceeding 20 and its articles of incorporation normally
contains a right of refusal as restriction for transfer of shares.
A. Closely held corporation
B. Family owned corporation
C. Close corporation
D. Public corporation
87. The By-Laws of ABC Co. states that the pre-emptive rights of incumbent stockholders are denied in all types of issuance of new
shares. Is the denial valid?
A. Yes because it is based on mutuality of contract.
B. Yes if voluntarily consented by the stockholders.
C. No because denial of pre-emptive rights is covered by Articles of Incorporation and not in the By-Laws.
D. No if it is not notarized.
88. 15 American doctors are intending to set-up a juridical entity for engaging in the practice of their profession and rendition of
modern medical services. What is the maximum foreign investment in practice of profession?
A. 0%
B. 30%
C. 40%
D. 60%
89. Which type of dividends requires ratification by at least 2/3 of the outstanding common stock?
A. Stock dividends
B. Cash dividends
C. Property dividends
D. All of the above
90. In which of the following instances is presentment for acceptance of a bill of exchange mandatory?
I. Where the bill is payable after sight, or in any other case, where presentment for acceptance is necessary in order to fix the
maturity of the instrument.
II. Where the bill expressly stipulates that it shall be presented for acceptance.
III. Where the bill is drawn payable elsewhere than at the residence or place of business of the drawee.
IV. Where the bill is payable on demand.
V. Where the bill is payable at sight or on presentation.
VI. Where the bill is payable at a fixed date.
a. I – II – III
b. I – II – III – IV – V – VI
c. I – II – III – IV – V
d. I – II – III – IV
91. Which of the following is a personal defense, one that can be set-up against a holder not in due course but not available against a
holder in due course?
A. Illegality of consideration
B. Minority or Insanity
C. Forgery
D. Fraud in esse contractus
92. Which of the following defenses may be set-up but only partially against a holder in due course?
A. Fraud in factum
B. Material alteration
C. Fraud in inducement
D. Acquisition of instrument by force or intimidation
93. Which of the following is a real defense, one that can be set-up against any type of holder?
A. Undelivered and incomplete instrument
B. Delivered but incomplete instrument (Filling of blank instrument)
C. Complete but undelivered instrument (Absence of delivery of complete instrument)
D. Wrong date
94. On January 1, 2001, M issued and delivered an order negotiable promissory note to P with the amount in blank. M instructed P to
write P10,000 to the promissory note. Instead of writing P10,000, P wrote P100,000. P generally indorsed and delivered the note to
A who subsequently generally indorsed and delivered the note to B, a holder in due course. Which of the following statements is
correct?
A. The instrument is not negotiable because the amount is blank.
B. B can only collect P10,000 from M because that is the authorized amount by M.
C. B can collect P100,000 from M because filing of blank is merely a personal defense which cannot be set up against
a holder in due course.
D. B cannot collect anything from M because forgery is a real defense.
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95. On January 1, 2001, M wrote a complete promissory note payable to the order of P with the amount of P10,000. M left it on his
table. P saw it and obtained the promissory note. P generally indorsed and delivered the note to A who subsequently generally
indorsed and delivered the note to B, a holder in due course. Which of the following statements is correct?
A. The instrument is not negotiable because of the absence of delivery.
B. B cannot collect from M because there is no delivery.
C. B can collect P10,000 from M because absence of delivery is merely a personal defense which cannot be set up
against a holder in due course.
D. B cannot collect anything from M because forgery is a real defense.
96. On January 1, 2001, P requested M for an autograph. M wrote his signature in a sheet of paper and delivered it to P on the same
day. Afterwards, P converted the autograph into a negotiable promissory note by writing the words “I promise to pay P or order
P10,000,000.” P generally indorsed and delivered the note to A who subsequently generally indorsed and delivered the note to B, a
holder in due course. B generally indorse and delivered the note to C, a holder not in due course who subsequently generally
indorsed and delivered the note to H, a holder not in due course. Which of the following statements is correct?
A. H may go after M because undelivered and incomplete instrument is merely a personal defense which cannot be set up
against a holder in due course.
B. H may not go after M because fraud in factum is a real defense but H may go after P, A, B, or C because these
general indorsers violated their warranty that the instrument is genuine.
C. H may not go after any of the parties because H is not a holder in due course.
D. H may go after C only, the general indorse who is not a holder in due course.
97. On January 1, 2001, M issued and delivered an order negotiable promissory note to P with the amount in P10,000. P altered the
amount of the note into P100,000. P generally indorsed and delivered the note to A, a holder not in due course who subsequently
generally indorsed and delivered the note to B, also a holder not in due course. Which is correct?
A. The instrument is not negotiable because of the material alteration.
B. B can collect P100,000 from M because material alteration may not be set up against a holder in due course.
C. B can collect P10,000 from M and he may go after P or A for the balance of P90,000.
D. B can only go after P or A for P100,000 because they violated their warranty but not from M.
98. M issued a negotiable promissory note payable to order of P. P subsequently indorsed and delivered it to A. A left the note in his
car. B stole the note and forged A’s signature to indorse it to himself. Afterwards, B indorsed and delivered it to C who
subsequently indorsed and delivered it to H, a holder in due course. Which of the following statements is correct?
A. The instrument is no longer negotiable because of forgery.
B. H may go after B or C only because forgery is a real defense available to parties prior to forgery.
C. H may go after M because forgery is only a personal defense.
D. H may go after P or A because they violated their warranties.
99. M issued a negotiable promissory note payable to P or bearer. P subsequently indorsed and delivered it to A. A left the note in his
car. B stole the note and forged A’s signature to indorse it to himself. Afterwards, B indorsed and delivered it to C who
subsequently indorsed and delivered it to H, a holder in due course. May H collect from M?
A. No because forgery is a real defense.
B. Yes because want of delivery is only a personal defense.
C. No because B stole the note.
D. Yes but only if notice of dishonor will be given to M.
100. M issued a negotiable promissory note payable to order of P in exchange for shabu. P subsequently indorsed and delivered it to A.
A subsequently indorsed and delivered it to B. Afterwards, B indorsed and delivered it to C, a holder not in due course, who
subsequently indorsed and delivered it to H, a holder in due course. Which of the following statements is correct?
A. The instrument is not negotiable because of illegality of consideration.
B. H may collect from M because illegality of consideration is a personal defense.
C. H may never go after P, A, B or C.
D. H may not collect from M because illegality of consideration is a real defense.
101. Using the same data in preceding number but assuming H is a holder not in due course, which of the following statements is
correct?
A. The instrument is not negotiable because of illegality of consideration.
B. H may collect from M because illegality of consideration is a personal defense.
C. H may go after P, A, B or C because these general indorsers violated their warranty that the instrument is valid
and subsisting.
D. H may not collect from M because illegality of consideration is a real defense.
102. Mr. D placed his checkbooklet in his cabinet. Ms. A, Mr. D’s kasambahay, stole the said checkbooklet and wrote a check payable to
her order amounting to P1M by forging Mr. D’s signature. Ms. A generally indorsed and delivered the note to H. Mr. H was able to
encash the check from the drawee-acceptor-bank. The drawee-acceptor-bank debited P1M from the account of Mr. D. Which of the
following statements is correct?
A. The instrument is not negotiable because of forgery of Mr. D’s signature.
B. The drawee-bank may never go after Ms.A, the forger.
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C. Mr. D may ask the drawee-acceptor-bank to recredit the P1M to his bank account because the latter violated its
warranty that the signature of the drawer is genuine.
D. Mr. D shall suffer the loss.
103. Which of the following types of indorsements waives the benefits provided to the indorser by law?
A. Restrictive indorsement
B. Qualified indorsement
C. Conditional indorsement
D. Facultative indorsement
104. Which of the following is NOT a warranty of a person negotiating the instrument by mere delivery?
A. That the instrument is genuine and in all respects what it purports to be.
B. That he has good title to it.
C. That all prior parties had capacity to contract.
D. That the instrument, is at the time of his indorsement, is valid and subsisting.
105. Which of the following is a mode of discharging a negotiable instrument?

A. Payment in due course by the drawer or general indorser of the instrument
B. Extension of the term of the instrument agreed upon by the holder and maker or acceptor
C. When the maker or acceptor becomes the holder of the instrument in his capacity at the maturity date of the
instrument
D. When the maker or acceptor becomes insolvent at the maturity date of the instrument
106. What is the required vote for the removal of a director of a stock corporation?
A. At least 2/3 vote of the stockholders with voting rights
B. At least majority of the stockholders with voting rights
C. At least majority vote of the directors and approval by at least 2/3 vote of the stockholders with voting rights.
D. At least majority vote of the directors and approval by at least majority vote of the stockholders with voting rights.
107. What is the maximum foreign investment allowed by law in a cooperative?

A. 0%
B. 30%
C. 40%
D. 100%
108. The following are the requirements of the founders of a primary cooperative, except
A. 15 or more natural persons
B. Of legal age
C. They have a common bond of interest and are actually residing or working in the intended area of operation.
D. Foreigners
109. It is a type of cooperative that combites two (2) or more of the business activities of different types of cooperatives.
A. Multi-purpose cooperative
B. Service cooperative
C. Single-line cooperative
D. Subsidiary cooperative
110. What is the minimum subscribed capital of a cooperative before it be allowed to be registered with CDA?
A. At least 25% of the authorized share capital
B. At least 15% of the authorized share capital
C. At least 35% of the authorized share capital
D. At least 45% of the authorized share capital
111. What is the minimum paid-up capital of a cooperative before it be allowed to be registered with CDA?
A. At least 25% of the total subscription or P15,000, whichever is higher
B. At least 25% of the total subscription or P5,000, whichever is higher
C. At least 25% of the total subscription or P25,000, whichever is higher
D. At least 25% of the total subscription or P35,000, whichever is higher
112. He is a member of a cooperative who has complied with all the membership requirements and entitled to all the rights and privileges of
membership. He is a member who is allowed to vote in fundamental matters affecting a cooperative.
A. Regular member
B. Associate member
C. Probationary member
D. Temporary member
113. He is a type of a cooperative member who has no right to vote nor be voted upon and shall be entitled only to such rights and privileges as
the bylaws may provide.
A. Associate member
B. Probationary member
C. Preferred member
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D. Extraordinary member
114. What is the required vote for the termination of a membership in a cooperative for any of the valid causes enumerated by Cooperative
Code?
A. At least 2/3 of all the members of the cooperative with right to vote
B. At least ¾ of all the members of the cooperative with right to vote
C. At least ¾ of all the members of the board of directors of the cooperative
D. At least majority of all the members of the board of directors of the cooperative
115. What is the required vote for approval of deferment of distribution of patronage refund and interest on share capital to members of a
cooperative?
A. At least 2/3 of members with voting rights, present and constituting a quorum
B. At least 3/4 of members with voting rights, present and constituting a quorum
C. At least majority of members with voting rights, present and constituting a quorum
D. At least 25% of members with voting rights, present and constituting a quorum
116. What is the first priority fund in the distribution of the net surplus of a cooperative to answer for future contingency or net losses of the
cooperative?
A. Reserve fund
B. Education and Training Fund
C. Community Development Fund
D. Optional Fund for Plant Asset
117. It refers to a type of audit wherein the cooperative assesses its social impact and ethical performance vis-à-vis its stated mission, vision,
goals and code of social responsibility for cooperatives to be established by the CDA in consultation with the cooperative sector.
A. Social Audit
B. Performance Audit
C. Financial Statements Audit
D. Compliance Audit
118. It is a type of cooperative the primary purpose of which is to procure and distribute commodities to members and non-members.
A. Marketing cooperative
B. Producers cooperative
C. Workers cooperative
D. Consumers cooperative
119. What is the number of vote that a regular member of an ordinary primary cooperative has?
A. Only one vote
B. Based on the number of shares held
C. Number of shares held multiplied by sits in Board of Directors
D. None
120. What is the number of vote that members of a secondary or tertiary cooperative have?
A. They shall have one (1) basic vote and as many incentive votes as provided for in the bylaws but not exceed five (5) votes.
B. They shall have two (2) basic votes and as many incentive votes as provided for in the bylaws but not exceed ten (10) votes.
C. They shall have three (3) basic votes and as many incentive votes as provided for in the bylaws but not exceed fifteen (15) votes.
D. They shall have four (4) basic vote and as many incentive votes as provided for in the bylaws but not exceed twenty (20) votes.
121. In the winding up or liquidation of a cooperative, to whom shall any cooperative's asset distributable to any creditor, shareholder or
member who is unknown or cannot be found be given?
A. To the city or municipality where the asset is located
B. To the federation or union to which the cooperative is affiliated with
C. To the Republic of the Philippines.
D. To the members of the cooperative
122. In the winding up or liquidation of a cooperative, what will happen to the subsidies, donations, legacies, grants, aids and such other
assistance from any local or foreign institution whether public or private given to such dissolved cooperative?
A. It will be given to city or municipality where the asset is located.
B. It will be given to federation or union to which the cooperative is affiliated with.
C. It will be escheated in favor of the Republic of the Philippines.
D. It will be given to the members of the cooperative.
123. It is a government instrumentality created in 1963 by virtue of Republic Act 3591 to insure the deposits of all banks which are entitled to
the benefits of insurance. It is also the government instrumentality with the obligation to conduct receivership and liquidation of a closed
bank.
A. Bangko Sentral ng Pilipinas
B. Philippine Deposit Insurance Corporation
C. Anti-Money Laundering Council
D. Bangko De Oro Unibank
124. What is the prescriptive period for filing a claim by a depositor of a closed bank from the date of takeover by PDIC of a closed bank?
A. 2 years
B. 3 years
C. 1 year
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D. 6 months
125. What is the maximum period for payment of a claim of a depositor of a closed bank by PDIC from the date of the filing of the claim?
A. 2 years
B. 3 years
C. 1 year
D. 6 months
126. Ana is a partner of ABC Partnership. She is also a director of Ana Corporation. Ana has the following deposit accounts in a closed Banco
Filipino:
Ana’s Business (Sole Proprietorship) - Checking Account P350,000
Ana’s personal savings deposit 400,000
Ana and Bea and Carla and Darna and Ella Joint Time Deposit 600,000
Ana and Ellen Joint Time Deposit 800,000
Ana and ABC Partnership Joint Checking Account 500,000
Ana and Ana Corporation Joint Demand Account 200,000
Personal loan payable of Ana to the closed bank (100,000)
What is the amount that may be recovered personally by Ana from PDIC?
A. P750,000
B. P850,000
C. P900,000
D. P400,000
127. Which of the following is not covered by Unclaimed Balances Law?

A. Gold and Silver Bullion
B. Security
C. Credits of Money
D. Merchandise inventory
128. Which government agency has the authority to reactivate bank deposits declared to be unclaimed balance under Unclaimed Balances Law?
A. Bureau of Treasury
B. Bureau of Internal Revenue
C. Bureau of Customs
D. Bangko Sentral ng Pilipinas
129. Which type of bank deposit of impeachable officer may be examined by impeachment court even without consent of the impeachable
officer?
A. Philippine Peso Bank Deposit
B. Foreign Currency Bank Deposit
C. Both A and B
D. Neither A nor B
130. As a general rule, which type of bank deposit may not become the subject matter of attachment, execution or garnishment?
A. Philippine Peso Bank Deposit
B. Foreign Currency Bank Deposit
C. Both A and B
D. Neither A nor B
131. In what type of tax assessment may the BIR Commissioner examine or inquire the bank deposits of a taxpayer under investigation without
violation of Bank Secrecy Law?
A. Estate tax
B. Donor's tax
C. Income tax
D. Value Added Tax
132. It refers to the act of knowingly transacting, possessing, moving or concealing proceeds of unlawful activity.
A. Insider trading
B. Money laundering
C. Tender offer
D. Estafa
133. Which of the following is not a predicate crime of Money Laundering?

A. Plunder
B. Jueteng and Masiao
C. Rebellion
D. Carnapping
134. Which of the following is a predicate crime of Money Laundering?

A. Adultery
B. Libel
C. Smuggling
D. Issuance of worthless check
135. In which of the following predicate crimes of money laundering may the Anti-Money Laundering Council to inquire the bank accounts of a
suspected launderer even without court order from Court of Appeals?
A. Kidnapping for Ransom
B. Fencing
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C. Extortion
D. Swindling
136. In which of the following predicate crimes of money laundering requires the Anti-Money Laundering Council to obtain court order from
Court of Appeals before it may inquire into the bank accounts of suspected launder?
A. Destructive Arson
B. Terrorism
C. Hijacking
D. Illegal Recruitment
137. Which court has the jurisdiction to issue bank inquiry order authoring Anti-Money Laundering Council to inquire bank accounts of
launderer or to issue freeze order involving bank accounts of launderer?
A. Regional Trial Court
B. Court of Appeals
C. Municipal Trial Court
D. Court of Tax Appeals
138. What is the maximum period given to Court of Appeals to resolve petition filed by Anti-Money Laundering Council for the issuance of
bank inquiry order involving bank accounts of suspected launderer or freeze order involving bank accounts of suspected launderer?
A. 12 hours
B. 24 hours
C. 36 hours
D. 48 hours
139. Which among the following is not a covered person under Anti-Money Laundering Law?
A. Money changers or remittance and transfer companies
B. Mutual funds or open-end companies, close-end investment, investment companies or issuers and other similar
C. Insurance companies or pre-need companies
D. Law firm or auditing firm if acting as independent legal professionals in relation to information concerning their clients
or where disclosure of information would compromise client confidences or the attorney-client relationship
140. It refers to a type of transaction that shall still be reported by a covered person to the Anti-Money Laundering Council even if the
transaction does not breach the quantitative threshold for reporting purposes by reason of the unusual nature of the transaction?
A. Suspicious transaction
B. Covered transaction
C. Arms length transaction
D. Related party transaction
141. What is the range of fines as punishment for issuance of worthless check with amount of P150,000?
A. P150,000 - P200,000
B. P200,000 - P500,000
C. P200,000 - P300,000
D. P150,000 - P300,000
142. Which of the following is not an element of violation of BP 22 for issuance of worthless check or no sufficient fund (NSF) check?
A. There must be making, drawing, and issuance of any check to apply for account or for value.
B. There must be knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit
with the drawee bank for the payment of the check in full upon its presentment.
C. There must be subsequent dishonor of the check by the drawee bank for insufficiency of funds or creditor dishonor for the same
reason had not the drawer, without any valid cause, ordered the bank to stop payment.
D. There must be criminal intent to defraud on the part of the drawer of the check.
143. Under BP 22, it shall be construed as an arrangement or understanding with the bank for the payment of such check.
A. Debit
B. Credit
C. Deposit
D. Account
144. What is the condition precedent before securities will be allowed to be sold or offered for sale or distribution within the Philippines?
A. It must be guaranteed by the Government of the Republic of the Philippines.
B. The securities must be risk-free.
C. The securities must be registered first before the Securities and Exchange Commission.
D. The securities must be profitable in all cases.
145. It refers to the application for the registration of securities required to be filed with the Securities and Exchange Commission before these
securities be allowed to be sold or offered for sale or distributed within the Philippines.
A. Certificate of registration
B. Application form
C. Registration statement
D. Articles of registration
146. It refers to the document made by or on behalf of an issuer, underwriter or dealer to sell or offer securities for sale to the public through
registration statement filed with the Securities and Exchange Commission. It describes the terms and conditions of the securities to be
offered to public.
A. Prospectus
B. Brochure
C. Table of specification
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D. Syllabus
147. Which of the following securities is required to be registered before the Securities and Exchange Commission?
A. Any security issued or guaranteed by the Government of the Philippines, or by any political subdivision or agency thereof, or by
any person controlled or supervised by, and acting as an instrumentality of said Government
B. Shares of stocks issued by a banking institution
C. Certificates issued by a receiver or by a trustee in bankruptcy duly approved by the proper adjudicatory body
D. Any security issued already registered and regulated by BSP, Insurance Commission, HLURB or BIR.
148. Which of the following securities is exempted from registration before Securities and Exchange Commission?
A. Insurance policy
B. Bond indenture
C. Share warrants and share options
D. Fractional undivided interest in oil or mineral rights
149. Which of the following securities sales transaction is not required to be registered with Securities and Exchange Commission?
A. The sale of securities by an issuer to more than twenty (20) persons in the Philippines during any twelve-month period
B. The exchange of securities by the issuer with the existing security holders exclusively, where commission or other remuneration
is paid or given directly or indirectly for soliciting such exchange
C. Broker’s transaction, executed upon customer’s orders, on any registered Exchange or other trading market
D. The sale of investment contracts by a networking company to the public
150. It means a publicly announced intention by an issuer to reacquire any of its own class of equity securities, or by an associate of such issuer
to acquire such securities and place the shares of stocks in treasury. This action of the issuer must be done only if the reacquisition of the
shares of stocks is supported by unrestricted retained earnings.
A. Tender offer
B. Insider trading
C. Fraudulent practices
D. Issuer tender offer
151. He refers to (a) the issuer; (b) a director or officer (or any person performing similar functions) of, or a person controlling the issuer; gives
or gave him access to material information about the issuer or the security that is not generally available to the public; (c) A government
employee, director, or officer of an exchange, clearing agency and/or self-regulatory organization who has access to material information
about an issuer or a security that is not generally available to the public; or (d) a person who learns such information by a communication
from any forgoing persons.
A. Insider
B. Outsider
C. Independent person
D. Suitably qualified external person
152. Which corporation is not covered by the Revised Code of Corporate Governance issued by Securities and Exchange Commission?
A. Corporation whose debt and equity securities are listed on an Exchange Market
B. Small and Medium Enterprise
C. Corporation that has assets in excess of Fifty Million Pesos and at least two hundred (200) stockholders who own at least one
hundred (100) shares each of equity
D. Corporation that is a grantee of secondary licenses or franchises from SEC
153. How many independent directors must be present in a corporation covered by Revised Code of Corporate Governance?
A. One independent director
B. Two independent directors
C. Three independent directors
D. Four independent directors
154. Under Revised Corporation Code, how many independent directors must be present in a corporation vested with public interest?
A. 20% of the directors
B. 10% of the directors
C. 5% of the directors
D. 25% of the directors
155. It refers to an executive committee with the responsibility to assist the Board of Directors in the performance of its oversight responsibility
for the financial reporting process, system of internal control, audit process, and monitoring of compliance with applicable laws, rules and
regulations.
A. Finance committee
B. Operation committee
C. Audit committee
D. External committee
156. Who shall be the chairman of the audit committee of a corporation?

A. Chairman of the Board of Directors
B. Independent director
C. President of the Corporation
D. Secretary of the Corporation
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Telephone : (043) 723 8412
157. He refers to a corporate officer who must monitor compliance by the corporation with Revised Code of Corporate Governance and the
rules and regulations of regulatory agencies and, if any violations are found, report the matter to the Board of Directors and recommend the
imposition of appropriate disciplinary action on the responsible parties and the adoption of measures to prevent a repetition of the violation.
A. Independent director
B. Compliance officer
C. Controller
D. Treasurer
158. To whom shall the compliance officer report directly?

A. President of the corporation
B. Chairman of the board of directors
C. Independent director
D. Chairman of the audit committee
159. Under Revised Corporation, which corporation elect a compliance officer?

A. Corporation vested with public interest
B. Close corporation
C. Family owned corporation
D. Closely held coporation
160. Under the 1987 Constitution, what is the minimum Filipino ownership before a domestic corporation may own private land in the
Philippines?
A. 100%
B. 30%
C. 40%
D. 60%
161. Under the 1987 Constitution, what is the maximum foreign investment in an advertising company?
A. 100%
B. 30%
C. 40%
D. 60%
162. Under the 1987 Constitution, what is the minimum Filipino ownership in an educational institution?
A. 70%
B. 30%
C. 40%
D. 60%
163. Under the 1987 Constitution, what is the maximum foreign investment in a public utility?
A. 100%
B. 30%
C. 40%
D. 60%
164. Under the 1987 Constitution, what is the minimum Filipino ownership in corporation engaged in the exploration, development and
utilization of natural resources?
A. 100%
B. 30%
C. 40%
D. 60%
165. Which of the following may become the subject matter of patent application?
A. Scientific theories and mathematical methods
B. Schemes, rules and methods of performing mental acts and playing games or doing business
C. Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or
animal body
D. Machine or Laser that can remove scar
E. Plant varieties and animal breeds
166. Which of the following is non-patentable?
A. Computer programs
B. Salt lamp technology
C. Car driven by water-engine
D. Microorganisms
167. Which of the following works is not copyrightable?

A. Philippine Financial Reporting Standards (PFRS)
B. Computer programs
C. Drawings
D. Lectures or Sermons
168. Which of the following works is copyrightable?

A. news of the day and other miscellaneous facts having the character of mere items of press information
B. any idea, procedure, system, method or operation
C. concept, principle, discovery or mere data as such
D. Dissertation of Thesis
169. What is the legal term of trademark or service mark under Intellectual Property Code of the Philippines?
A. Life of the right holder plus 50 years after his death
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Telephone : (043) 723 8412
B. 20 years
C. 10 years but subject to unlimited renewal
D. 5 years
170. What is the legal life of a patent under Intellectual Property Code of the Philippines?
A. Life of the right holder plus 50 years after his death
B. 20 years
C. 10 years but subject to unlimited renewal
D. Indefinite life
171. Which intellectual property is created or protected from the moment of registration with Intellectual Property Office?
A. Patent, Trademark, Tradename and Copyright
B. Patent and Trademark
C. Tradename and Copyright
D. Patent, Trademark and Copyright
172. It refers to a government agency which is considered an independent body entrusted to administer and implement the provisions of Data
Privacy Act, and to monitor and ensure compliance of the country with international standards set for data protection.
A. National Telecommunication Commission
B. National Privacy Commission
C. National Economic Commission
D. National Power Corporation
173. He refers to an individual whose personal information is processed.

A. Data subject
B. Subject matter
C. Subject matter information
D. Humanity
174. He or it refers to a person or organization who controls the collection, holding, processing or use of personal information, including a
person or organization who instructs another person or organization to collect, hold, process, use, transfer or disclose personal information
on his or her behalf.
A. Personal information processor
B. Personal information controller
C. Personal information holder
D. Personal information collector
175. He or it refers to any natural or juridical person qualified to act as such under Data Privacy Act to whom a personal information controller
may outsource the processing of personal data pertaining to a data subject.
A. Personal information processor
B. Personal information collector
C. Personal information holder
D. Personal information custodian
176. It refers to any and all forms of data which under the Rules of Court and other pertinent laws constitute privileged communication. They
are considered inadmissible as evidence in any proceedings.
A. Confidential information
B. Sensitive information
C. Personal information
D. Privileged information
177. Which of the following is considered a sensitive personal information?

A. Information about an individual’s race, ethnic origin, marital status, age, color, and religious, philosophical or political
affiliations
B. Information about an individual’s business, company, business venture and profitable transactions
C. Information about an individual’s facebook public profile picture and display photo
D. Information about an individual’s instagram public account and public twitter account
178. Which of the following is not considered a sensitive personal information?

A. Information about an individual’s health, education, genetic or sexual life of a person, or to any proceeding for any offense
committed or alleged to have been committed by such person, the disposal of such proceedings, or the sentence of any court in
such proceedings
B. Information issued by government agencies peculiar to an individual which includes, but not limited to, social security numbers,
previous or current health records, licenses or its denials, suspension or revocation, and tax returns
C. Information specifically established by an executive order or an act of Congress to be kept classified
D. Information about the platform of a candidate for national elective position that is discussed in a public debate televised
in national television network
179. Which of the following is not a general data privacy principle?

A. Transparency
B. Legitimate purpose
C. Proportionality
D. Immorality
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Telephone : (043) 723 8412
180. Which of the following is not a right of Data Subject under Data Privacy Act?
A. Right to be informed whether personal information pertaining to him or her shall be, are being or have been processed
B. Right to be furnished the information indicated hereunder before the entry of his or her personal information into the processing
system of the personal information controller, or at the next practical opportunity
C. Right to suspend, withdraw or order the blocking, removal or destruction of his or her personal information from the personal
information controller’s filing system upon discovery and substantial proof that the personal information are incomplete,
outdated, false, unlawfully obtained, used for unauthorized purposes or are no longer necessary for the purposes for which they
were collected
D. Right to access the information and communication system of the personal information controller and personal
information processor in order to obtain trade secrets.
181. It refers to the process or transaction between applicants or requesting parties and government offices or agencies involving applications for
any privilege, right, reward, license, clearance, permit or authorization, concession, or for any modification, renewal or extension of the
enumerated applications or requests which are acted upon in the ordinary course of business of the agency or office concerned.
A. Social service
B. Government service
C. Public service
D. Private service
182. It refers to time consumed by an LGU or national government agency (NGA) from the receipt of an application or request with complete
requirements, accompanying documents and payment of fees to the issuance of certification or such similar documents approving or
disapproving an application or request.
A. Lead time
B. Set-up time
C. Waiting time
D. Processing time
183. What is the maximum period for the processing and approval of licenses, clearances, permits, certifications or authorizations for the
installation and operation of telecommunication, broadcast towers, facilities, equipment and services in so far as those issued by barangays,
Local Government Units or National Government Agencies?
A. a total of seven (7) working days
B. a total of five (5) working days
C. a total of three (3) working days
D. a total of ten (10) working days
184. What is the effect if the approving government agency fails to approve or disapprove an application for a license, clearance, permit,
certification or authorization within the prescribed processing time of a total of seven (7) working days?
A. Said application shall be deemed approved.
B. Said application shall be deemed denied.
C. The applicant shall file another application.
D. The applicant shall go to the proper court of law to file an action for mandamus.
185. If the licenses, clearances, permits, certifications or authorizations for the installation and operation of telecommunication, broadcast
towers, facilities, equipment and services require approval by appropriate local legislative body such as the Sanggunian, what is the
prescribed period for the approval of the said application?
A. a nonextendible period of twenty (20) working days
B. a nonextendible period of ten (10) working days
C. a nonextendible period of thirty (30) working days
D. a nonextendible period of forty (40) working days
186. Which of the following statements is false about de jure corporation and de facto corporation?
A. A de jure corporation is one that was able to comply substantially with all the requirements of the law for its incorporation.
B. A de facto corporation is one that was able to make colorable compliance of the legal requirements for its incorporation.
C. A de jure corporation’s existence can be attacked in a quo warranto proceeding.
D. None of the above.
187. Which of the following is a characteristic of a de facto corporation?

A. There is a bona fide attempt to comply with the requirements of the law in organizing the corporation.
B. There is an actual exercise of corporate powers in good faith.
C. Both A and B
D. Neither A nor B
188. Which of the following is covered by the term "Intellectual Property Rights" under Intellectual Property Code of the Philippines?
A. Lay-out Designs (Topographies) of Integrated Circuits
B. Protection of Undisclosed Information.
C. Both A and B
D. Neither A nor B
189. Which of the following inventions will be afforded patent protection under Intellectual Property Code of the Philippines?
A. A therapeutic machine that heals and eliminates scars and blemishes on any part of the skin.
B. Computer program
C. Mere combination of different strains of bacteria
D. Procedures for computing net profit from business ventures
Mobile : 0927 283 8234
Telephone : (043) 723 8412
190. Which of the following is covered by the term "Author" of original work as applied to copyright law under Intellectual Property Code of
the Philippines?
A. Sculptor
B. Choreographer
C. Both A and B
D. Neither A nor B
191. Which of the following exclusive or economic rights has been granted by "Trade-Related Aspects of Intellectual Property Rights" (TRIPS)
Agreement of WTO to author of original work?
A. Right of rental
B. Right of reproduction
C. Right of performance
D. Right of transmission
192. Which of the following are considered moral rights of author of original work under Intellectual Property Code of the Philippines?
A. To have authorship of his work attributed to him
B. To make alterations of his work
C. Both A and B
D. Neither A nor B
193. Which installment sale is covered by Maceda Law also known as Realty Installment Buyer Protection Act?
A. Installment sale of condominium dwelling units
B. Installment sale of commercial buildings
C. Installment sale of industrial lots
D. Installment sale of agricultural lands to tenants under the Agrarian Reform Program
194. Where the installment buyer of residential real property was able to pay less than two years of installment, what is the grace period earned
by him to pay without additional interest?
A. 30 days
B. 60 days
C. One month
D. Two months
195. Where the installment buyer of residential real property was able to pay two years or more of installment, what is the grace period earned
by him to pay without additional interest?
A. 30 days for every year of installments paid
B. 60 days for every year of installments paid.
C. One month for every year of installments paid.
D. Two months for every year of installments paid.
196. B purchased a residential lot of S for P1,000,000 on installment under the following terms: P200,000 downpayment on January 2, 2001;
P100,000 every year thereafter until fully paid. Assume that B defaulted on the very first installment due on January 2, 2002. What is the grace
period to pay without additional interest and cash surrender value earned by B?
A. 60 days and P0, respectively
B. 60 days and P100,000, respectively
C. 30 days and P100,000, respectively
D. No grace period and no cash surrender value
197. Assume the same facts in preceding number, except that B defaulted on the installment due on January 2, 2008. What is the grace period to
pay without additional interest and cash surrender value earned by B?
A. 6 months and P440,000
B. 7 months and P540,000
C. 8 months days and P620,000
D. 5 months and P530,000
198. The sale of securities requires SEC registration where the qualified buyer is a:
A. Bank
B. Investment company
C. Insurance company
D. None of the above
199. Which act of an insider is unlawful?

A. The insider communicates material nonpublic information about the issuer or the security to any person, knowing, or
believing that such person will buy or sell the security of the issuer by reason of the information.
B. The insider proves that the information was not gained from his relationship with the issuer of the securities.
C. The insider has reason to believe that the other party who is identified is also in possession of the information.
D. The insider shows that the information is not material non-public information.
200. X borrowed the certificate of stock to Y to be used as security for a loan. Thereafter, the marker price of the shares zoomed up and X sold
the said shares in the trading market. X returned the amount equivalent to the par value of the shares to Y and pocketed the profit he made from
the sale. What is the term for this transaction?
A. Wash sale
B. Short sale
C. Insider trading
201. In which of the following cases is piercing the veil of corporate entity not applicable?
A. The corporation operates for the benefit of a single individual who exercises complete control over its funds.
Mobile : 0927 283 8234
Telephone : (043) 723 8412
B. The corporation controls the majority stock of another corporation.

C. The corporation is a mere alter ego of another corporation.
D. The corporation is organized to evade an outstanding legal obligation.
202. 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.
203. Which is the following is not a feature of a preferred stock?

A. It cannot vote, unless expressly granted in the articles of incorporation.
B. It is only preferred as to dividends in the absence of stipulation.
C. It is always a par value stock.
D. It may be classified as redeemable stock.
204. Which is not a characteristic of treasury share?

A. It is an issued share but is not classified as outstanding share.
B. It has no voting right.
C. It may be sold at less than par value.
D. It may be distributed as a stock dividend.
205. Which of the following defects would make the corporate a de facto corporation?
A. The corporate name which resembles the name of a pre-existing corporation is likely to deceive the public but the
certificate of registration has already been issued by SEC.
B. Failure to file the articles of incorporation with the SEC.
C. Absence of certificate of incorporation or registration from SEC.
D. Continuing business operations despite the discovery of the defect or defects after incorporation without any action to correct
them.
206. Under Old Corporation Code, which is false about the by-laws of a corporation?
A. Post-incorporation by-laws shall be submitted for approval to SEC not later than one (1) month from receipt of official notice of
the issuance of certificate of incorporation.
B. Any amendment or repeal of by-laws requires at least majority vote of the board of directors/trustees and at least 2/3 vote
of the outstanding capital stock/members.
C. It is not binding on third persons, unless they have actual or constructive knowledge thereof.
207. Which is true about the corporate board meetings of a corporation?

A. It is held on a monthly basis.
B. It must be held within the Philippines.
C. It cannot be done through teleconferencing or videoconferencing.
D. It may be attended by means of a proxy.
208. Which is true about the meetings of corporate stockholders or members?

A. It is always held on any day of April of each year.
B. It can be conducted anywhere in the Philippines.
C. It may be attended by means of proxy.
D. It cannot be called on a special basis.
209. Which corporate act requires at least majority vote of the board of directors and at least 2/3 of the outstanding capital stock?
A. Approval of management contract
B. Amendment of by-laws
C. Issuance of stock dividends
D. None of the above
210. Which corporate act requires at least majority vote of the board of directors and at least 2/3 of the outstanding capital stock?
A. Adoption of by-laws
B. Plan of merger or consolidation
C. Management contract
D. Fixing of issue price of no-par
211. 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
-Nothing Follows-

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No. 125 Brgy.

iCARE Accountancy Review

1. Which of the following phrases means that the obligation is solidary?

12. The debtor and creditor are indebted to each other.

13. The old obligation is replaced by a new obligation.

19. Which of the following obligations may be subject to legal compensation?

C. Obligation arising from crime or delict

35. Which of the following contracts is not covered by statute of fraud?

39. Which of the following is not a characteristic of a contract of sale?

43. Sale is valid between spouses,

A. A may ask for the return of the laptop.

60. What is the nature of a limited partner’s interest in a limited partnership?

67. When a new partner is admitted,

B. The corporation is ipso jure dissolved by legislative enactment.

105. Which of the following is a mode of discharging a negotiable instrument?

107. What is the maximum foreign investment allowed by law in a cooperative?

127. Which of the following is not covered by Unclaimed Balances Law?

133. Which of the following is not a predicate crime of Money Laundering?

134. Which of the following is a predicate crime of Money Laundering?

156. Who shall be the chairman of the audit committee of a corporation?

158. To whom shall the compliance officer report directly?

159. Under Revised Corporation, which corporation elect a compliance officer?

167. Which of the following works is not copyrightable?

168. Which of the following works is copyrightable?

173. He refers to an individual whose personal information is processed.

177. Which of the following is considered a sensitive personal information?

178. Which of the following is not considered a sensitive personal information?

179. Which of the following is not a general data privacy principle?

187. Which of the following is a characteristic of a de facto corporation?

199. Which act of an insider is unlawful?

B. The corporation controls the majority stock of another corporation.

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

203. Which is the following is not a feature of a preferred stock?

204. Which is not a characteristic of treasury share?

207. Which is true about the corporate board meetings of a corporation?

208. Which is true about the meetings of corporate stockholders or members?

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

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