New Era University

College of Business Administration

Cooperative Management

Midterm Examination

October 10, 2022

Name: __ROBVIE P. GARCIA________________ Section:3FM-2____________________

Schedule: ______MW (1:00PM-2:30PM)________________ Score _______________

True or False. Write your answer on the space provided.

___TRUE_______ 1) Republic Act 9520 is an act amending the Cooperative Code of the Philippines to
be known as the “Philippine Cooperative Code of 2008”.

___TRUE_______ 2) A cooperative is an autonomous and duly association of persons with a common

bond of interest, who have voluntarily joined together to achieve their social, economic and cultural
needs and aspirations by making equitable contributions to the capital required, patronizing their
products and services and accepting a fair share of the risks and benefits of the undertaking in
accordance with generally accepted cooperative principle.

___TRUE_______ 3) In primary cooperative, members have equal voting rights of one-member, one
vote.

___TRUE_______ 4) The primary objective of a cooperative is to help improve the quality of life of its
members.

___TRUE_______ 5) A cooperative will teach members on the efficient ways of doing things in a
cooperative manner.

___TRUE_______ 6) A cooperative shall adopt bylaws not contrary to law, morals or public policy, to
amend, to repeal the same in accordance with the code.

___TRUE_______ 7) A cooperative can enter into division, merger or consolidation as provided in the
code.

___TRUE_______ 8) Cooperative Development Authority (CDA) is established under Republic Act

6939.
___TRUE_______ 9) A prospective member of a primary cooperative must have completed a Pre-
Membership Education Seminar (PMES).

___TRUE_______ 10) In terms of membership, a cooperative shall be categorized into primary,

secondary and tertiary.

Supply the missing words. Write the answers in the space provided.

A cooperative is an 1.) __autonomous_____________ and duly registered

2.) _ association______________ of persons with a common bond of interest, who have

3.) _voluntarily______________ joined together to achieve their 4.) __social_____________, economic

and cultural needs and 5.) ___ aspiration____________ by making equitable

6.) _contribution ______________ to the capital required, patronizing their

7.) _products ______________ and services and accepting a far 8.) _share______________ of the risk
and 9.) _benefits______________ of the undertaking in accordance with

10.) __generally accepted_____________ cooperative 11.) _____principles__________. Every

cooperative shall conduct its 12.) _____affairs__________ in accordance with Filipino

13.) __culture_____________, good values and 14.) __experiences_____________ and the universally
accepted principles of cooperative which include voluntary and

15.) ____open___________ membership. 16.) __democratic_____________ member control economic

17.) ____________participation___ 18.) _____Autonomy__________ and independence, education 19.)
___training____________ and information 20.) ____Cooperation___________ among cooperatives and
concern for 21.) ______community_________.

Words to choose from:

Autonomous Social Products

generally accepted Open Participation

Autonomy Training Cooperation

Association Aspiration Share

Principles Culture Democratic

Community Voluntarily Contribution

Benefits Affairs experiences

Identify the principles of cooperative described in the following sentences. Write the letter of the
correct answer in the space provided.

Open & voluntary membership__________ 1) Membership is open to all members regardless of social,
political or religious background or belief.

Solidarity__________ 2) Cooperative is ruled by the majority of its members.

Limited interest in capital__________ 3) Interest in share capital shall not exceed the normal
rate of return on investment and such interest shall be noncumulative.

_Equitable distribution of net surplus_________ 4) The net surplus arising out of the operation of a
cooperative belongs to its members and shall be equitably distributed for cooperative development,
common services, indivisible reserve fund and for limited interest on capital and/or patronage refund.

__Cooperative education________ 5) Cooperatives shall make provision for the education of

members, officers and employees of the cooperative.

_Cooperation among cooperatives_________ 6) Cooperatives shall actively cooperate with other

cooperatives at local, national and international levels.

_Democratic control_________ 7) Cooperatives must organize, regulate and help themselves with
government assistance only when necessary. This is the same as the principles of self-help and
autonomy.

_Self-help_________ 8) Members of the cooperatives must be able and willing to help

themselves.

Answers to choose from:

Equitable distribution of net surplus

Limited interest in capital

Democratic control

Open & voluntary membership Cooperative education

Cooperation among cooperatives

Solidarity

Self-help

Matching type. Match column A with column B. Write the word of the correct answer.

_MEMBER_________ 1) A person either natural or juridical who, adhering to the principles set
forth in the articles of cooperation, has been admitted by the cooperatives as member.

_GENERAL ASSEMBLY_________ 2) The full membership of the cooperative duly assembled for the
purpose of exercising all the rights and obligations pertaining to cooperatives.

_BOARD OF DIRECTORS_________ 3) The body entrusted with the management of the affairs of the
cooperative.

_COMMITTEE_________ 4) Refer to the body entrusted with specific functions and responsibilities
under the by-laws or resolution of the general assembly or the board of directors.

_ARTICLES OF COOPERATION_________ 5) Means the articles of cooperation registered under the

code and includes a registered amendment thereof.

_BY-LAWS_________ 6) Means the by-laws registered under the code and includes amendments
thereof.

_REGISTRATION_________ 7) The operative act granting juridical personality to a proposed

cooperative and is evidenced by a certificate of registration.

COOPERATIVE DEVELOPMENT AUTHORITY__________ 8) The government agency in charge of

the registration of cooperatives.

_UNIVERSALLY ACCEPTED COOPERATIVE PRINCIPLES _________ 9) The body of cooperative

principles adhered to worldwide by cooperatives in other countries.
_R.A. 6938_________ 10) The basic law on cooperatives.

Words to choose from:

R.A. 6938 Registration

R.A. 6939 Committee

Universally accepted cooperative principles Board of directors

By-laws Member

General assembly Cooperative development authority

Articles of cooperation

Enumeration. Answer the following questions.

1-4. What are the essential requirements for the organization of a cooperative.

To apply for a cooperative, there are certain documentary pre-requisites that you

need to prepare, such as:

? Four copies of Economic Survey

? Four copies of Duly notarized Articles of Cooperation and By-Laws

? A surety bond of accountable officers

? Treasurer’s Affidavit

? Approved Cooperative Name Reservation Slip

? Certificate of PMES

REQUIREMENTS FOR ORGANIZING A COOPERATIVE

1. Forms for membership

2. Share capital

3. Articles of cooperation

4. Bylaws

5-10. Give at least 6 types of cooperatives

5. Credit Cooperative is one that promotes and undertakes savings and lending

services among its members. It generates a common pool of funds in order to provide

financial assistance and other related financial services to its members for productive

and provident purposes;

6. Consumers Cooperative is one the primary purpose of which is to procure and

distribute commodities to members and non-members;

7. Producers Cooperative is one that undertakes joint production whether agricultural

or industrial. It is formed and operated by its members to undertake the production

and processing of raw materials or goods produced by its members into finished or

processed products for sale by the cooperative to its members and non-members.

Any end product or its derivative arising from the raw materials produced by its

members, sold in the name and or the account of the cooperative, shall be deemed

a product of the cooperative and its members;

8. Marketing Cooperative is one which engages in the supply of production inputs to

members and markets their products;

9. Service Cooperative is one which engages in medical and dental care,

hospitalization, transportation, insurance, housing, labor, electric light and power,

communication, professional and other services;

10. Multipurpose Cooperative is one which combines two (2) or more of the business
activities of these different types of cooperatives;

11-13. What are the three categories of cooperative according to membership and territorial
consideration.

11. Primary - The members of which are natural persons;

12. Secondary - The members of which are primaries;

13. Tertiary - The members of which are secondary cooperatives:

14-21. What are the eight parts of the Articles of Cooperation.

14. The name of the cooperative which shall include the word ‘cooperative’;

15. The purpose or purposes and scope of business for which the cooperative is to

be registered;

16. The term of existence of the cooperative;

17. The area of operation and the postal address of its principal office:

18. The names, nationality, and the postal addresses of the registrants:

19. The common bond of membership:

20. The list of names of the directors who shall manage the cooperative: and

21. The amount of its share capital, the names and residences of its contributors and

a statement of whether the cooperative is primary, secondary or tertiary in

accordance with Article 23 hereof.

22-25. Explain the principle of patronage refund

Patronage refunds are a significant source of funding for cooperatives.

Members frequently choose to leave a percentage of their return in the cooperative to help maintain its
operations running smoothly. The percentage of the patronage refund that is preserved is allocated to
the member's equity account and paid out at a later date.

A cooperative's unique character and purpose places the obligation for

financing the firm on its member-users. The benefits are dependent on how they are used. These
advantages do not increase the value of stock or other equity investments. As a result, the incentives
that drive people to buy shares in other companies do not exist with cooperative stock. As a result, the
cooperative's members must furnish the majority of its equity capital, either via direct investment or
through retained patronage allocations.

Prepared By: Professor Ester S. Distor, MBA, DBA Candidate