BUSINESS LAW- POWER REVIEW

Obligations
1. All are sources of obligations except:
a. Obligation of parents to support their children
b. Obligation to pay taxes for all citizens
c. A debtor paying his obligations that has prescribed.
d. A driver’s negligence resulting to physical injury to a pedestrian.

2. All of the following are obligations of the debtor if the object is a determinate thing except:
a. To deliver the specific thing promised
b. To deliver the accession or its accessories even though not agreed upon.
c. To deliver the fruits from the perfection of contract
d. To take care of the thing promised pending delivery with due diligence.

3. Which is not a source of liability to pay damages?

a. Culpa contractual
b. Dolo incidente
c. Failure to deliver on the date agreed by the parties
d. Obligor violating the tenor of their agreement with the obligee.

4. All are remedies of the obligee in case of breach of obligation to deliver a generic thing except:
a. Right to compel specific performance
b. Right to ask a third person to do it at dr’s expense
c. Right to convert the obligation to its monetary value
d. Right to ask for another damages.

5. When the debtor’s property are not enough to pay all his debt in full. This condition is called:
a. Antichresis
b. Pactu commissorio
c. Insolvency
d. Suspension

6. Statement No. 1: D obliges himself to give C a specific ring, upon failure, to give C P5,000. This is a case of facultative
obligation.
Statement No. 2: D obliges himself to give C a specific ring. However, if he so desires, D may instead give C P5,000. This is an
example of an obligation with a penal clause.
Given these examples, which statement is correct?
a. Both obligations are valid but both are mislabeled as to their classification as obligations.
b. Both obligations are not valid.
c. Both obligations are valid and are properly labeled as to their classification as obligations.
d. Both statements are invalid and improperly labeled as to their classification as obligations.

7. Statement 1: “I will give you a specific car if you not marry X this year (2016). If by the end of 2016, both parties are alive and
no marriage has taken place, my obligation is extinguished.
Statement 2: “I will give you P10,000 if you cannot make a dead man alive. This is impossible condition, obligation not
demandable.
a. Both are true
b. Both are false
c. No. 1 is true, No. 2 is false
d. No. 1 is false, No. 2 is true

8. A, B and C jointly and severally borrowed P15,000 from X. to secure its payment, A pledge his ring, B his TV set, and C his
refrigerator. Based on the information provided, which of the following statements is correct:
a. The debtors are solidarily bound and the pledge on the three things are solidarily.
b. The debtors are jointly bound but the pledge on the three things are solidarily
c. The debtors are persons solidarily liable and the pledge on the three things is indivisible
d. The debtors are liable individually and the character of the three things pledged is divisible

9. In novation which of the following is incorrect?

a. If the new obligation is void, original obligation shall subsist
b. In expromission, the insolvency of the new debtor shall never revive, the action of the creditor-against the original debtor
c. If the original obligation is subject to a suspensive condition, the new obligation is subject to the same condition unless
stated
d. In Delegacion, insolvency of the new debtor will never revive the old obligation.

10. A is obliged to give B his only car on September 1, 2015. On the said date, A did not deliver. On September 2, 2015, an
earthquake completely destroyed the car. Is A still liable?
a. No. Considering that no demand to deliver was made by B and the specific thing was lost, due to fortuitous event, the
obligation is extinguished.
b. No. The obligation is extinguished, even if the debtor is already in default because the debtor can plead impossibility of
performance.
c. Yes. A is already in legal delay, thus the obligation to deliver the lost specific thing is converted into monetary claim for
damages.
d. Yes. The creditor can instead demand for a substitute of equivalent value from the debtor.

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11. A, B and C are solidarily debtors of X for P9,000. Later, C paid X the whole obligation. Which of the following is considered a
false statement as to the effects of C paying X the whole obligation
a. C becomes a creditor for reimbursement
b. After C paid X the whole obligation, the same is converted into a joint obligation of reimbursement
c. If the debtot A becomes insolvent C can collect from B P6,000
d. None of the above

12. W, X, Y, Z solidarily liable to A, B, C, jointly creditors for P30,000. How much can A and B collect from X?
a. P10,000
b. P2,500 only
c. P20,000
d. P30,000

13. On October 4, 2015, A is indebted to B for P50,000 for a 20-day period. A proposed to B that X will pay A’s debt and that A will
be free from all liabilities. B and X agree to the proposal. On October 25, 2015, X became insolvent. At the time of delegation,
X was already insolvent but this was not known to A. The insolvency is not public knowledge. So B sues A on the ground that
it was A who made then proposal that A guaranteed X’s solvency. Decide.
a. A is liable because he is presumed to have guaranteed X’s solvency.
b. A is not liable because he does not know the insolvency of X at the time of delegation and neither was the insolvency of
public knowledge.
c. A is liable because he did not exercise due diligence in determining the insolvency of X.
d. A is liable because X agree to the proposal to make himself solidarity liable for the obligation.

14. The minimum standard of care that person obliged to give something must observe in the preservation of the specific thing
subject matter of an obligation.
a. That diligence of a good father of a family
b. That diligence which the parties have stipulated on
c. That diligence which the law provides
d. All of the above

15. One is incorrect about extinguishment of obligation

a. Novation is not absolute but only a relative mode of extinguishment of an obligation
b. Dacion en pago and payment by cession are governed by the law on sale
c. A stockholder may not compensate what he owes the corporation with his present stockholdings.
d. Loss of a determinate thing due to fortuitous event will exempt the debtor even if he stole it but he later offered to return
and the owner refused to accept without valid cause.

16. Which is incorrect about damages?

a. In contracts and quasi contracts, obligor who acted in good faith is liable for the natural and probable consequences of
the breach of obligation whether foreseen or not
b. In letter A, but in case of fraud or bad faith, obligor is responsible for all damages reasonably attributable to the non
performance of the obligation
c. In crimes and quasi delicts, obligor is liable for all damages which are natural and probable consequences of the act or
omission whether or not foreseen
d. Indemnification for actual damages comprehends not only the value of the loss but also the profits the oblige failed to
obtain

17. Manuel bought the Nokia 7650 of Jess for P15, 000 by giving 50% earnest money although delivery of the cell phone would
be after 3 days later. Before delivery however the cell phone was lost due to flood brought by storm.
a. Manuel can recover the P7, 500 he paid to Jess
b. Manuel may ask for another cell phone at no additional cost because Jess is liable.
c. Obligation of Jess to deliver is extinguished by the force majeure event and Manuel cannot recover the amount paid.
d. The contract of sale should be rescinded.

Contracts
18. One is incorrect about elements of contracts:
a. Absence of an essential element voids the contracts
b. Absence of natural or accidental elements may result to rescission and damages
c. In policitation, there is meeting of meetings but contract is incomplete hence needs refromation
d. In stipulation, pour autrui consent or acceptance of the third person involves is mandatory

19. All are essential characteristics of contracts except

a. Relativity of contract
b. Obligatoriness of contract
c. Autonomy of contract
d. Uniformity of contract or equality of contracting parties

20. Statement 1: The death, civil interdiction, insanity or insolvency of either offeror or offeree before acceptance is conveyed
makes the offer ineffective
Statement 2: The cause of a contract is the psychological or personal reason whereas motive is the objective or juridical
a. True; true
b. False; false
c. True; false
d. False; true

21. The following contracts must appear in a public instrument except:

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 a. Donation of immovable property
b. Agency to sell land
c. Partnership where immovable property or real rights are contributed
d. When limited partnership is formed

22. 1st statement : Rescission of contracts and rescission or resolution of reciprocal obligation are the same
2nd statement: In voidable contracts the defect is external whereas in rescissible contracts the defect is intrinsic
a. True, True c. False, True
b. False, False d. True, False

23. In void contract neither party may seek to enforce it, neither can they seek the aid of law. But recovery can be made by the
other party except.
a. The innocent party
b. The debtor who pays usurious interest
c. The party rejecting the void contract before illegal purpose is accomplished
d. In pari delicto parties

24. Which is most defective?

a. Both parties are incapacitated
b. One of the parties is a minor suffering lesion by more than ½ of the value of his property
c. Contracts entered by a debtor to defraud his creditor
d. Contracts involving very difficult service

25. In three of the following defective contracts, ratification cleanses the defects. Which is the exception?
a. Contracts entered into by a person who has been given no authority
b. Sale of a piece of land thru an agent the authority is oral
c. Sale of immovable property or interest orally entered into
d. Both parties are incapable of giving consent

26. Example No. 1: W 16 years old sold his house valued at P1M for P50,000 or a lesion by more than one-fourth of the value of
the said house.
Example No. 2: G, guardian of W, sold W’s house valued at P50,000 for P37,500 or a lesion of one-fourth of the value.
a. Voidable; Rescissible
b. Rescissible; voidable
c. No. 1 is rescissible; while No.2 is unenforceable
d. Voidable; valid perfectly

27. The following contracts should observe Statute of Frauds, except:

a. Lease of real property longer than one year
b. Representation as to the credit of a third person
c. Lease of personal property longer than one year
d. Guaranty

28. Which of the following contracts cannot be ratified?

a. Those whose cause or object did not exist at the time of the transaction
b. Unauthorized contracts
c. Those where both parties are incapable of giving consent
d. Those that fail to comply with the Statute of Fraud

29. All are incorrect about contracts except one

a. Voidable contracts are also called validable contracts
b. Stipulation pour autrui is an exception to mutuality of contracts
c. Fraud in inducement is a ground to nullify a contract
d. Void contracts are unenforceable but not vice versa

Sales, Agency Pledge and Mortgage

30. Which of the following statement is false:
a. In contract to sell, ownership is not transferred to the buyer even if there is delivery
b. Stoppage in transit can be exercised by unpaid seller if the buyer is insolvent and the vendor has not yet parted with the
thing sold
c. The price is considered certain ifI it is in reference to another thing certain
d. In a right to-resell it is not necessary that the original buyer is insolvent

31. B fraudulently induces S to sell to him (B) a masterpiece painting for P10,000. Subsequently, B sold it to X for P12,000, a
good faith purchaser. S is entitled to
a. Rescind the contract with B plus damages
b. Recover the painting from X but no damages
c. Recover damages from B
d. Rescind the contract between B and X

32. Which of the following statements is true

a. In a contract of sale the full payment of the price is in nature of suspensive condition for the transfer of ownership of the
thing sold
b. The selller need not be the owner of the thing sold at the perfection of the sale
c. Emptio spei speretae is an absolute sale.
d. Pacto de retro sale is a sale with suspensive condition.

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33. S agreed to sell to B his land and B agreed to pay P10,000 if X will pass the CPA Exams of 200A. X passed, Meantime,
interest earned is P1,200, while the fruits harvested is P2,000.
a. S will deliver the land to B
b. B will pay S the price of the sale
c. Combination of A and B
d. Combination of A and B, together with the fruits and interest

34. S owns a ring and sold it to B for P10,000. B paid S the price, but the latter promised to deliver the ring to X in a public
instrument and delivered the ring to X. In a contract of pledge:
Statement 1: Between B and X the latter has got a better right, because the contract of pledge appears in a public instrument
and there was delivery.
Statement 2: Some case above, but done through a private instrument.
a. Both statements are true
b. Both statements are false
c. No. 1 is true, No. 2 is false
d. No. 1 is false, No. 2 is true

35. P wrote A authorizing A to sell a piece of land on his behalf. The land was purchased by X but A kept the money. What can P
do?
a. P may refuse to surrender his land to X
b. P may require X to pay the agreed price again
c. P may recover the proceeds of the sale from A
d. P may recover his land to X thru court action

36. D, as owner of specific car and a parcel of land, properly mortgage the same to C to answer a principal obligation of P1 million.
Later, D sold the same land to W, while the car sold to Y without informing the creditor/mortgagee.
Statement 1: The sale made to W is unenforceable, valid only if ratified
Statement 2: The car sold to Y is valid and enforceable because this is a movable property, but D is liable
a. Both statements are true
b. Both statements are false
c. No. 1 is true, No. 2 is false
d. No. 1 is false, No. 2 is true

37. Statement 1: In a sale of goods, the fruits shall pertain to the vendee from the day the goods are delivered to the vendee.
Statement 2: In case of loss or deterioration of improvement of the thing before the arrival of the period term, the rules during
the pendency for the condition in conditional obligation shall be observed, the vendor being considered as the debtor.
a. Both statements are true
b. Both statements are false
c. No. 1 is true, No. 2 is false
d. No. 1 is false, No. 2 is true

38. Example 1: S sold to B in a private instrumental his land. Later B wanted to have the sale registered, but registration requires a
public instrument. In here B can compel S to execute the needed public instrument.
Example 2: Same case above but it was orally made with partial payment later, contract is still enforceable.
a. Both examples are false
b. Only No. 1 is true
c. Only No. 2 is true
d. Both examples are true

39. The Recto Law is not applicable

a. Sale of car on straight term
b. Sale of house on installment
c. Sale of car on installment where the buyer constituted a mortgage on his truck
d. All of the above

40. Not a characteristic of mutuum/ commodatum:

a. Bilateral contract
b. Principal contract
c. Gratuitous contract
d. Consensual contract

41. Not a characteristic of pledge/ mortgages:

a. Nominate contract
b. Onerous contract
c. Principal contract
d. Bilateral contract

42. Not a characteristic of antichresis:

a. Consensual contract
b. Onerous contract
c. Nominate contract
d. Formal contract

43. Affidavit of good faith is required in this contract.

a. Real estate mortgage

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 b. Antichresis
c. Chattel mortgage
d. Pledge

44. In the following contracts, which is directly affected by Recto Law:

a. Real estate mortgage
b. Antichresis
c. Chattel mortgage
d. Pledge

45. Which of the following is not a source of Chattel Mortgage Law

a. Revised penal Code
b. Civil code
c. Chattel Mortgage Law
d. 1986 Consttution

46. D1, D2 and D3 borrowed from C P300,000 as a security, he mortgaged their undivided agricultural land to C, Subsequently, D1
paid C P100,000. Is the mortgage on D1’s share of the land extinguished?
a. No, because mortgages are considered indivisible, payment in part shall not extinguish the obligation secured by the
mortgage.
b. No. because the obligation is solidary, payment in part shall not extinguish the obligation secured by the mortgage.
c. Yes, the obligation of the debtors is joint, D1 is answerable only for P100,000.
d. Yes, because the obligation of D1 on the debt is only P100,000.

47. Personal properties that can be mortgaged under the Chattel Mortgage Law
a. shares of stock
b. ungathered fruits or products
c. interest in business
d. all of the above

48. Statement 1: There can be a case of the mortgage appropriating for himself the mortgaged object should the debtor/mortgagor
fail to pay the principal obligation.
Statement 2: A thing put up by way of pledge may be sold to another person even without extinguishing the contract of pledge
previously entered into by the seller with his pledge creditor
a. Both statements are true
b. Both statements are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

49. Which of the following statements is true

a. If a principal appoints an agent in writing with respect to the sale of a piece of land and the latter sold it to a buyer orally,
the contract between the agent and the buyer is void.
b. A contract of agency is generally gratuitous.
c. To lease personal property to another person for more than one year does not require a special power of attorney.
d. The insolvency of the principal but not agent shall extinguish the agency.

50. D borrowed from C P10,000 and as security he pledged his ring to C. by common agreement D remains in possession of the
ring pledged, and a private instrument was executed to that effect, on the date of maturity, D failed to pay, which of the
following statement is correct:
a. D may go to a Notary Public and caused the sale of the ring because of failure to pay the obligation
b. There is no contract of pledge because the ring remains in the possession of D
c. The contract of pledge between D and C is not valid because it did not appear in a public instrument
d. The contract is unenforceable unless it will be ratified by the parties

51. A seller sold to a buyer a television set at a price of P20,000. At that time the buyer has only P5,000 cash and he offered a
diamond ring worth P15,000 which the seller accepted as payment of the price. The nature of the contract is
a. Sale
b. Barter
c. Partly sales and partly barter
d. Commodatum

52. Statement 1: In sale or return, the risk of loss is on the vendor; In sale or trial, the risk of loss is on the vendee.
Statement 2: In sale or return, ownership passes to the vendee upon the delivery of the goods; in sale on trial, ownership does
not pass to the vendee until he accept the goods
a. Both statements are true
b. Both statements are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

53. Three of the following are considered elements of contract of pledge and mortgage, which is the exception?
a. Accessory contract
b. Pledgor or mortgagor must be absolute owner
c. Thing pledged may be appropriated if debtor cannot pay
d. Pledgor or mortgagor must have a free disposal of the thing pledged

54. D pledge his ring to C for P10,000. D failed to pay his obligation on time. C sold it at public auction for P8,000.

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 a. C can recover die deficiency even without stipulation
b. C cannot recover the deficiency even there is a stipulation
c. C cannot recover the deficiency
d. C can recover the deficiency

55. Statement 1: If the thing pledged is returned to the pledgor, the principal obligation is extinguished.
Statement 2: A contract of pledge is consensual which is perfected from the time the thing pledged is placed in the possession
of the creditor, or of a third person by common agreement.
a. Both statements are true
b. Both statements are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

56. Which of the following statements is incorrect?

a. Warranty against hidden defect is a natural element
b. The seller need not be owner of the thing sold at the perfection of the sale
c. There a may be a transfer of ownership over the thing even if the seller has not delivered the thing sold to the buyer
d. Warranty against eviction is waivable impliedly

57. S sold his car to B payable in ten (10) equal monthly installments and with a mortgage constituted on the same property (car).
For B’s failure to pay a month’s installment, which statement is correct?
a. S may foreclose the mortgage on B’s car but he no longer has the right to recover the balance should it (the
car) be sold for an amount lower than what he claims from B.
b. S may seek the cancellation of the sale made to B.
c. S may seek the cancellation of the same and later on foreclose the mortgage should he find it impossible to collect from
B.
d. S may seek fulfilment of the obligation of B to pay the amount due.

58. Araneta wrote a letter to Bascon wherein in he offered to sell a piece of land. In Araneta’s letter he gives Bascon a period of
two months within which to pay the price of P500,000. After 50 days Araneta told Bascon that he is increasing the price of the
land to P700,000. Can Bascon compel Araneta to accept P500,000 first offered by Araneta and execute the deed of sale?
a. No, for Bascon did not signify his acceptance of the offer
b. Yes, because the period of 2 months has not yet expired
c. Yes, because Araneta is already estopped by his signed letter
d. Yes, because there was actual meeting of minds of the parties

59. A sold to B a parcel of land for P30,000. The sale is evidenced by a memorandum of agreement of sale written in Cebuano
dialect. One week later, A sold the same parcel of land to C for P40,000 which was evidenced by a formal deed of sale. Upon
buying the property, C, who was aware of the first sale, immediately took possession of the land and registered the deed of
sale in her favor with the Register of Deeds. When informed of the second sale, B subsequently registered an adverse claim to
the property. The parcel of land shall belong to
a. B, because she got older title
b. C, because the sale was made on formal deed of sale
c. C, because she is the first to register the deed of sale
d. C, because she is the first to take possession of the land

60. One of the following is not an alternative remedy available to a seller of personal property on installment if buyer defaults
a. To go to court and ask the court to order deliver of the property
b. To foreclose the chattel mortgage
c. To sue for specific performance
d. To take possession of the property and forfeit the amount paid by buyer

61. Mr. Gamboa sold his car for P200,000 to Mr. Ramos. There was no fixed period for the performance of the obligation of both
parties. The obligation of Mr. Gamboa as vendor is:
a. To wait for Mr. Ramos to pay P200,000 and deliver the car
b. To deliver the car immediately as this is a perfect contract
c. To deliver the car immediately because the seller’s obligation is pure
d. To rescind the contract because no time or date is fixed for the performance of their respective obligations

62. Mr. Almando Romero owes the BIR P100,000 in delinquent taxes and penalties. In order to evade the payment of the said
liability, he executed a deed of sale of his parcel of land for P200,000 in favor of his brother, Pablo, who paid the purchase
price but the BIR has evidence that said price had never been paid, the purpose of the sale being to prevent the BIR to levy
upon the land to satify the tax liability of Mr. Almando Romero. In this case:
a. The BIR may not levy upon the land because the sale is valid
b. The BIR, without annulling the sale, may levy upon the land of Romero pursuant to the provisions of the National Internal
Revenue Code
c. The BIR should first annual the sale before it may levy upon the land pursuant to the provisions of the National Internal
Revenue Code
d. Answer is not given

63. A legal writ authorizing a sheriff to take into custody property in litigation belonging to a defendant until he complies with orders
of the court
a. Foreclosure
b. Dacion en pago
c. Sequestration
d. Counterclaim

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 e. Garnishment

64. The unpaid seller of goods loses his lien thereon except:
a. When the buyer or his agent lawfully obtains possession of the goods
b. When a seller delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without
reserving the ownership of the goods.
c. By waiver thereof
d. When the goods are in transit

65. A owes B P100,000 guaranteed by X and secured by a real estate mortgage over a parcel of land. B assigns the credit to C
who notified A. Later A defaulted in the payment of the loans. Which of the following is incorrect?
a. C is subrogated to the rights of B?
b. C can foreclose the mortgage
c. C can also sue X after exercising the right of excussion
d. C can not sue X if he has decided to foreclose the mortgage

Partnership
66. A, B, and C, capitalist partners, contributing P30,000, P20,000 and P10,000 respectively, and D, the industrial partner,
contributed his services. Suppose X, a customer, is the creditor of the firm to the amount of P180,000. How can X recover the
P180,000?
a. X must sue the firm and get P60,000. X can still recover the balance of P120,000 from the four partners jointly, that is
P30,000 each
b. X can recover from the firm P60,000. X can still recover the balance of P120,000 from the capitalist partners only
c. X can recover from the firm P60,000. X can still recover the balance of P120,000 from the capitalist solidarily
d. X can recover from the firm P60,000 and can no longer recover the balance of P120,000.

67. A, B and C formed a general partnership with a gross capital of P90,000. They agreed that the profit and loss sharing is: A –
50%; B – 25%; C – 25%. Upon dissolution and after exhausting the partnership capital, X has still a collectible amount of
P30,000 from the firm. How much can X collect from C alone?
a. P7,500
b. P15,000
c. P30,000
d. P10,000

68. Which of the following provision in Partnership Law is/are considered mandatory and not directory.
a. If the capital is P3,000 or more it must appear in a public instrument.
b. The partnership contract must be recorded with the SEC if limited partnership
c. If immovable properties is contributed it must appear in a public instrument.
d. B and C.
e. A and B

69. Unless otherwise provided in a general partnership, which of the following is correct when a partner dies?
Deceased partner’s
administrator would His estate would be free The partnership is
automatically become from any liabilities automatically dissolved
partner
a. Yes Yes Yes
b. Yes No No
c. No Yes No
d. No No Yes

70. A, B and C partners. Their contributions are as follows: A=P60t, B=P40t, C=services. A P10t loss shall be distributed as follows:
a. A, P6,000; B, P4,000; C, nothing
b. A, P3,000; B, P2,000; C, P5,000
c. A, P3,500; B, P2,500; C, P3,000
d. A, P3,000; B, P2,000; C, P4,000

71. One is mode of dissolving partnership that requires decree of court

a. Death of partner
b. When a specific thing promised by a partner is lost before delivery
c. Business can only be carried on at a loss
d. Accomplishment of the purpose

72. X, Y and Z formed a general partnership decided to contribute P200, 000 each. The partnership has started its operations
although X was able to contribute only P140, 000. They also agreed that X and Y be exempted from losses. Upon dissolution
there was an outstanding obligation to Mr. A in the amount of P720, 000.A exhausted the capital of P540, 000, leaving a
P180, 000 balance. Which statement based on the foregoing is true?
a. The share of X is nothing based on the agreement
b. The share of X is 1/3 of P180, 000 or P60, 000 being a general partner.
c. Z will have to absorb the whole P180, 000 per agreement minus X’s share of P60, 000
d. X is liable for P60, 000 to the partnership and P40, 000 to Mr. A

73. Which of the following is not correct? In a limited partnership composed of A, B and C, the contribution may be as follows:

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 a. A property (limited partner); B – services (general partner); C – cash (general partner)
b. A cash (limited partner); B – property (general partner); C – services (general partner)
c. A services (limited partner); B – cash (general partner); C – services (genral partner)
d. A cash (limited partner); B – cash (general partner); C – services (genral partner)

74. Which of the following statements is correct?

a. A partnership contract is not covered by Statute of frauds
b. A limited partnership is one having at least one general partner or one limited partner and the limited partner shall not be
liable for the obligation of the partnership
c. A limited partner who contributed industry to the firm becomes liable as a general partner
d. The contract of partneship is void if it contains a stipulation which excludes a partner from sharing in the profits of the firm

75. Which of the following statements is (are) usually correct regarding general partner’s liability
I. All general partners are jointly and severally liable for the partnership torts
II. All general partners are liable only for those partnership obligations they actually authorized
a. I only
b. II only
c. Both I and II
d. Neither I nor II

76. 1st statement: The arrival of the term of a partnership with a fixed term or period shall not dissolve the partnership but such
partnership may be terminated anytime dependent on the will of the continuing partners.
2nd statement: The general rule is that the loss of the specific thing contributed to the partnership dissolves the partnership
when only the use of the thing is contributed by the partner.
a. Both statements are false
b. Both statements are true
c. 1st statement is true but 2nd statement is false
d. 1st statement is false but 2nd statement is true

77. A partner who does not participate in the management of the affairs of the partnership and whose connection with it is not
made known to the public is called:
a. Silent-secret partner
b. Nominal partner
c. Dormant partner
d. Silent-ostensible partner

78. A, B and C are partners in X Partnership. The partnership is dissolved by A’s death. B therafter transact business with D, a
third person
Statement 1: If the transaction is designed to complete trasactions began but unfinished at the time of dissolution, the
partnership is bound.
Statement 2: On dissolution, the partnership is not terminated but continues until winding up of partnership affairs is
completed.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

79. Statement 1: A person admitted as a partner into a existing partnership is not liable for obligations of the partnership contracted
before his admission
Statement 2: The partner who caused the dissolution is still allowed to be liquidating partner.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

80. A, B and C formed a limited Partnership, each contributing, P10,000. However, the articles of partnership was not recorded or
registered with the SEC. Which of the following is an incorrect statement?
a. Not valid as a limited partnership
b. It is considered as a general partnership
c. The partnership still possesses juridical personality distinct and separate from the partners.
d. The partnership is void.

Corporation
81. Majority Vote “ By the Board of Directors” and approved by not less than 2/3 of all stocks, outstanding and entitled to vote are
the prescribed vote in three of the following, which is the exception?
a. Adoption of new by-laws
b. Declaration of stock dividends
c. To incur, create or increase bonded indebtedness
d. To amend the articles of incorporation

82. 1st statement: No cash dividends can be declared out of principal surplus as this could amount to declaration of dividend of
capital
2nd statement: If the surplus profits of the stock corporation exceeded the level equal to its paid up capital, SEC may compel
the corporation to declare dividends otherwise it will be liable for a surtax on improperly accumulated profits. Which of the
following is correct?
a. 1st statement is false but 2nd statement is true

8
 b. Both statements are true
c. Both are false
d. 1st statement is true but 2nd statement is false

83. A corporation cannot be an incorporator, because only natural persons may become incorporators, except
a. Cooperative as incorporator of Rural Bank
b. Eleemosynary corporations
c. Charitable organization incorporated under the Philippine Laws
d. Corporations Sole

84. Statement No. 1: When liquidation is done by receivership or trusteeship, the settling of corporate affairs may go beyond 3
years.
Statement No.2: Trustee of non-stock but educational institutions cannot exceed 15 persons and shall be in multiple of 5
a. True; true
b. False; false
c. True; false
d. False; true

85. Directors or officers of the corporation are solidarily liable for damages suffered by the corporation and its stockholders and
creditors in any of the following except one:
a. When they willfully and knowingly voted or approved a patent unlawful act involving the corporation
b. When they are guilty of bad faith in directing the affairs of the corporation
c. When they are guilty of negligence in directing the affairs of the corporation
d. When they are acquire personal or pecuniary interest in conflict with their duties

86. All are requirements of derivative suit except:

a. A wrongful act done involving or against the corporation
b. Complaining stockholder applied for redress to the board and majority stockholders
c. Complaining stockholder must be stockholder of record when wrongful act occurred
d. The action is brought on behalf of the corporation and complaining stockholder

87. For valid ratification of an ultra vires act. The following requisite must concur except:
a. The act must be consummated not executory
b. The state is not prejudiced
c. No creditor is prejudiced
d. Majority of stockholders must give their consent

88. Statement 1: The trustee of a voting trust can be elected to the board of directors
Statement 2: The grantor/trustor of a voting trust who is director can retain his position even if he entrusted all his shares thru a
VTA
a. True; true
b. False; false
c. True; false
d. False; true

89. Statement 1: The trustee of voting trust is entitled to receive dividend also.
Statement 2: A corporation can still legally exist before SEC without a corporate name
a. True; true
b. False; false
c. True; false
d. False; true

90. The following are requirements for a valid transfer of stock, except:
a. There must be a delivery of stock certificates
b. It must be endorsed by the owner or his legal representative
c. It must be transferred for a valuable consideration
d. To be valid against third persons, must be recorded in the corporate books

91. Statement 1: When by laws provides, pre-emptive rights in favor of the corporation only, it is null and void
Statement 2: waiver of a pre-emptive right in the subscription agreement is not allowed
a. True; true
b. False; false
c. True; false
d. False; true

92. To delegate to the board of directors or trustees the power to amend or repeal the by-laws or adopt new by-laws
a. Majority of the outstanding capital stock or of the members
b. Majority vote of the board and of the outstanding capital stock or of the members
c. 2/3 of the outstanding capital stock or of the members
d. Majority of the quorum of the board and 2/3 of the outstanding capital stock or of the members

93. Statement 1: Management of a corporation may be delegated to an executive committee, composed of not less than 3
members of the board to be appointed by the board provided the creation of such executive committee is provided in the by-
laws.
Statement 2: Stockholders or members meeting shall be held in the city or municipality where the principal office of the
corporation is located and if practicable, in the principal office of the corporation

9
 a. Both are true
b. Both are false
c. No.1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

94. Shares deposited by the seller or his agent with a bank or third party to deliver to the buyer or subscriber only upon the
fulfillment of the stipulated suspensive condition
a. Promotion shares
b. Founders shares
c. Redeemable shares
d. Escrow shares

95. 1st statement: Membership in a non-stock corporation, and all rights arising there from cannot be transferred even if provided in
the articles of incorporation or by laws, because membership and the right arising there from are personal and non-
transferable
2nd statement: Treasury stock sold for less than their par or issued value are considered “watered stock” and as such prohibited
by law. Which is correct?
a. Both are true
b. Both are false
c. 1st statement is true; 2nd statement is false
d. 1st statement is false; 2nd statement is true

96. The assets of the corporation as represented by its capital stock are to be maintained unimpaired that there can be no
distribution of such assets among the stockholders without provision being first made for the payment of corporate debts.
a. Doctrine of corporate fiction
b. Doctrine of corporate opportunity
c. Trust fund doctrine
d. Doctrine of limited capacity

97. A corporation where vacancies in the board of Directors are filled only by the remaining members of the boards is:
a. Open corporation
b. Corporation sole
c. Eleemosynary corporation
d. Close corporation

98. Statement 1: All the issued stocks, exclusive of treasury stocks, of a close corporation shall be held of record by not more than
20 stockholders
Statement 2: Foreign corporations transacting business in the Philippines without license may not sue but may be sued in our
courts
a. Both are true
b. Both are false
c. 1st statement is true; 2nd statement is false
d. 1st statement is false; 2nd statement is true

99. Statement 1: Stock issued by a corporation in excess of the amount prescribed or limited by its Articles of Incorporation are
void except in the hands of a bonafide purchaser for value.
Statement 2: Treasury shares are part of the outstanding capital stock of a corporation.
a. Both are true
b. Both are false
c. 1st statement is true; 2nd statement is false
d. 1st statement is false; 2nd statement is true

100. Statement 1: A contract entered by the corporation with any of its officers or directors is prohibited
Statement 2: If the interest of an interlocking director in one of the contracting corporations is substantial while his interest in
the other is merely nominal, the contract between the said corporations with interlocking directors shall be valid
a. True; true
b. False; false
c. False; true
d. True; false

101. Appraisal right may be exercised in any of the following except:

a. Shorten corporate term
b. Conversion of corporation from stock to non-stock
c. Investment of corporate funds to another purpose other than primary
d. Corporate voluntary dissolution

102. In the following cases, even non voting shares may vote except:
a. Amendment of by-laws and corporate charter
b. In case of merger or consolidation
c. In case of management contracts entered by the corporation with another corporation
d. Corporate voluntary dissolution

103. One is not a ground of SEC under Involuntary dissolution:

a. Refusal to adopt by laws
b. Too numerous ultra vires acts
c. Error in the paid capital during incorporation

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 d. Five year non-user rule

104. An Executive Committee has no power to do the following except:

a. Amend by-laws
b. Amend Board Resolution
c. Approve acts requiring stockholders’ approval
d. Declare cash dividends

105. A shareholder’s option to subscribe to allotment of shares in proportion to his holdings of outstanding shares, before new
shares are offered to others
a. Voting right
b. Pre-emptive right
c. Ultra vires act
d. Appraisal right

106. Qualification of trustee on non stock corporation:

a. Trustee must be member of the corporation
b. Majority of the trustees must be resident of the Philippines
c. Trustees of non stock corporation may be more than 15 members
d. All of the above

107. Features of transfer restriction of shares in the close corporation

a. For the restriction on the right to transfer, the same be stated in the Articles of Incorporation, By-laws and Certificate
of Stock
b. The restriction shall not be more onerous than granting the existing stockholders with such reasonable terms,
conditions or period stated therein
c. The transfer therefore, shall only be made to the close corporation or to the stockholders of the close corporation
d. All of the above

108. To revoke the power granted to the board to make by laws.

a. Majority vote of the board and of the outstanding capital stock of the members
b. 2/3 of the outstanding capital stock of the members
c. Majority of the quorum of the board and 2/3 of the outstanding capital stock or of the members
d. Majority of the outstanding capital stock or of the members

109. A corporation officer or director cannot take advantage for their personal benefit, a business opportunity which the
corporation is financially able to undertake
a. Doctrine of corporate fiction
b. Trust fund doctrine
c. Doctrine of corporate opportunity
d. Doctrine of limited capacity

110. This group of persons may not form a corporation and be incorporators in a corporation in the Philippines
a. Fifteen Spanish citizens who are residents of Manila
b. Ten resident aliens and four aliens in Singapore
c. Eleven Filipinos who are resident of San Francisco, California
d. Seven Americans residing in the Philippines and two Filipinos, residents of Hawaii

111. The following are the requisites, except one, for valid declaration and/or issuance of stock dividend
a. Existence or original and unissued shares
b. Dividend declaration is made by the Board of directors and approved by 2/3 of the outstanding capital stock
c. It is issued to increase the authorized capital
d. Existence of unrestricted earnings

112. To secure an obligation of P10,000, D pledged 100 shares of stock in S corporation in favor of C. Because D defaulted, C
sold at public auction the said shares of stock previously delivered to him by D. In the auction sale, the shares were sold to
B for P15,000. It turned out, however, that after the pledge, but before the auction sale, D had executed deed of sale
transferring the shares to X,
Statemnet 1: B acquires ownership of the stock, because he was the buyer at the auction sale.
Statement 2: The excess of P5,000 shall belong to the debtor (D) unless otherwise stipulated
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

113. Place of meeting of stockholders and members. Which one is correct?

a. Stockholders: City or municipality where the principal office of the corporation is located
b. Members: Any place even outside the principal office of the corporation if stated in the by-laws must be within the
Philippines and stated in the notice of meeting
c. Members: Any place even outside the principal office of business if stated in the by-laws but must be within the
philippines even if not stated in the notice of meeting
d. Stockholders: Meeting held outside the principal place of business is valid except if all stockholders are present or
represented.

114. Any profit which it may earn shall be used for the furtherance of the purpose for which the corporation was organized as
such profit is not distributable to its members

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 a. Close corporation
b. Stock corporation
c. Private educational corporation
d. Non-stock corporation

115. All cannot be a close corporation except:

a. Banks
b. Insurance companies
c. Multi-national companies
d. Educational institutions

Negotiable Instruments Law

116. Which is not correct? The acceptor by accepting the instrument
a. Admits the existence of the drawer, the genuineness of signature and his capacity and authority to draw the
instrument
b. Admits the existence of the payee and his capacity to indorse
c. Engages that he will pay it according to the tenor of his acceptance
d. Admits the existence of the endorser, the genuineness of his signature and his capacity and authority to draw the
instrument

117. “I promise to pay to the order of Pedro San Pedro only the sum of $10,000”. (Sgd.) M. The words “Pedro San Pedro only”
are written in the handwriting of M. The instrument is
a. Negotiable, convert dollars into legal tender
b. Non-negotiable, because the instrument is payable in dollars
c. Non-negotiable, endorsement is restrictive
d. Non-negotiable, payable only to a specified person

118. Which of the following is not a characteristic of a Bill of Exchange

a. Original parties are the drawer, drawee and payee
b. Acceptance is generally required
c. Drawer is primarily liable
d. Contains an unconditional order

119. Statement 1: Where a negotiable instrument is endorsed conditionally, the person liable on the instrument may disregard
the condition and legally pay the same
Statement 2: An instrument which is negotiable in origin continues to be negotiable unless restrictively indorsed or
discharged by payment
a. Both statements are false
b. First statement is false, second statement is true
c. Both statement are true
d. First statement is true, second statement is false

120. Statement 1: A holder for value is an endorsee who has both the legal and beneficial interest to the instrument and is
subject to both real and personal defense available against him.
Statement 2: A holder in due course is one possesses both the legal and beneficial interest to the instrument but is subject
to personal defenses.
a. Both statement are false
b. First statement is false, second statement is true
c. Both statement are true
d. First statement is true, second statement is false

121. In the renunciation by the holder of his rights against any party to the instrument, which of the following statements is false?
a. If the instrument is delivered to the person primarily liable without collecting it constitutes oral renunciation
b. If renunciation is made in favor of any party secondarily liable, all parties subsequent to him are discharged from
liability
c. Renunciation will not affect the rights of a holder in due course
d. If the renunciation is made in favor of the party liable it must be made before, at or after maturity date

122. Every person negotiating an instrument by delivery or by qualified endorsement warrants the following. Which does not
belong to the warranties?
a. That the time of his endorsement the instrument is valid and subsisting
b. That the instrument is genuine and in all respect what it purports to be
c. That he has good title to it and that all prior parties have capacity to contract
d. That he has no knowledge of any fact which would impair the validity of the instrument or render it valueless

123. “A issued a promissory note payable to “B” or bearer. “A” delivered note to “B”. “B” indorsed the note to “C”. “C” placed the
note in his drawer, which was stolen by the janitor “X”. “X” indorsed the note to “D” by forging “C’s’ signature. “D” indorsed
the note to “E” who in turn delivered the note to “F”, a holder in due course, without endorsement. Which of the following
statement is false?
a. A is liable to F despite the forgery committed because F is a holder in due course.
b. B is liable to F because as an indorse he warrants that the instrument is genuine.
c. C cannot set up forgery because the instrument is payable to bearer negotiable only by delivery, the forged
signature of “X” is not necessary
d. Forgery here is a real defense for A, B & C

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124. Where in a bill the drawer and the drawee are the same person or where the drawee is a fictitious person, or a person not
having capacity to contract, the holder, at his option, may treat the instrument as
a. Dishonored
b. Bill of exchange
c. Promissory note
d. Either a bill of exchange or a promissory note

125. A executed a bill of exchange in favor of B for P10,000, B later altered the amount to P100,000 and presented the bill to C,
the drawee who accepted the bill. Thereafter the bill negotiable by B to D. Which is correct?
a. The acceptor is liable up to P10,000 only
b. The acceptor is not liable because of alteration
c. The acceptor is liable only up to P10,000 except if D is a holder in due course in which case A is liable up to
P100,000
d. The acceptor by accepting the bill is liable according to the tenor of his acceptance, that is P100,000

126. Which is not correct?

a. A check, even if good when offered, maybe refused by a creditor in satisfaction of his demand because it does not
meet the requirements of legal tender
b. The Phil. Peso bills when attempted to be exported, as when carried in excess of that allowed by the Central Bank
maybe deemed to have been taken out of domestic circulation as legal tender and thus maybe treated as
commodity
c. If the obligation of a debtor is to pay in dollars it shall be discharged in Phil. Currency measured at the prevailing
rate of exchange at the time the obligation is incurred
d. Payment of the debtor’s obligation maybe made by a third person even without the knowledge and consent of the
debtor

127. Under the Negotiable Instrument Law which of the following requirements must be met for a person to be a holder in due
course of a promissory note?
a. The note must be payable to bearer
b. All prior holders must have been holders in due course
c. The holder must be payee of the note
d. The holder received it for value

128. Statement 1: “I promise to pay B the sum of P20,000, three(3) days from date.” Sgd. A (The instrument is not dated)
Statement 2: “I promise to pay to the order of B or C the sum of P50,000. Sgd. A
a. Both are negotiable
b. Both are not negotiable
c. First is not negotiable while second is negotiable
d. First is negotiable while second is not

129. Identify the following indorsement

“Pay to A, without recourse” Sgd. P
a. Qualified
b. Blank
c. Special and qualified
d. Qualified and restrictive

130. Under the Negotiable Instrument Law. Which of the following requirements must be met for a transferee of order paper to
become a holder?
I. Transferee in possession of the note
II. Indorsement of transferor and delivery to the transferee
a. I only
b. II only
c. I and II
d. None of the above

131. A person whose signature does not appear on an instrument is not liable thereon, except
a. Where a duly authorized agent signed for him
b. Where he forges the signature of another person
c. When he signs in an assumed or trade name
d. All of the above

132. M makes a negotiable note in favor of P payable on December 25, 200A, with the following successive indorsements. P to
A, A to B, B to C, C to D. on the due date M is paying D, but D extends the payment up to December 25, 200B. Which of the
following is incorrect?
a. If M become insolvent on December 25, 200B, P, A, B, C are discharged of their obligation
b. “If the indorsers consented to the extension of time, and M become insolvent the indorsers are still liable.
c. If before the extension date, D cancels the signature of P as indorser, P, A, B, C and the instrument are discharged
d. None of the above

133. Statement 1: The referee in case of need is liable on the instrument and if he refuses to pay he maybe sued in the court
Statement 2: The avalista is liable on his written obligation and if he refuses to pay he maybe sued in the court
a. True; true
b. True; false
c. False; true
d. False; false

13
134. A is the maker of a promissory note for P100,000payable to the order of B who negotiated the same in favor of C. C lost the
note and is found by X who forges the signature of C and pretending to be C negotiated the note to D, D to E, E to F to G
who is a holder in due course. Under the circumstances which of these is not an incorrect statement?
a. Being holder in due course, G can recover from maker A
b. The signature of C being forged, it becomes inoperative and payment cannot be enforced as against him
c. E is not liable to F precisely because he was not the one who forged the signature of C
d. X is not liable to any party to the instrument since his name does not appear thereon

135. Holder H, perfectly altered the amount of a negotiable note from P10,000 to P100,000 then negotiated the note to P. Which
is correct?
a. If P is a holder in due course, he can require the maker to pay P110,000
b. If P is not a holder in due course, he can require the maker to pay only the original sum of P10,000
c. P cannot require the maker to pay because of alteration whether or not he is a holder in due course
d. If P is a holder in due course, he can require the maker to pay P10,000

136. The following are all requisites of an acceptance for honor. Choose the exception
a. That the bill must have been previously dishonored by non-acceptance or protested for better security
b. That the bill is already overdue
c. That the acceptance for honor must be with the consent of the holder
d. That the acceptor for honor must not be a party already liable on the instrument

137. Identify the following indorsement.

“Pay to A if he completes work today, without recourse.” Signed P
a. Qualified indorsement
b. Special and qualified indorsement
c. Restrictive and qualified
d. Special, conditional and qualified indorsement

138. Statement 1: A check must be presented for payment within a reasonable time after its last negotiation
Statement 2: A Bill of Exchange must be presented for payment within a reasonable time after its last negotiation
a. True; true
b. True; false
c. False; true
d. False; false

139. Under the Negotiable Instrument Law, which of the following requirements must be met for a transferee of bearer paper to
become a holder?
I. Delivery by the holder only to the transferee
II. Endorsement of transfer and delivery to the transferee
a. I only
b. II only
c. Both I and II
d. Neither I and II

140. C issues a bill payable to the order of R without endorsing the bill transfer for a consideration said bill to M. The following
except one, are the valid effects of the transfer
a. M becomes a holder
b. M requires the right to have the endorsement of R
c. The transfer vests in M such title as R had thereon
d. The bill is merely assigned and not negotiable

141. Item 1: “To X: Pay to P on demand the amount of P5,000,000 and reimburse yourself from the proceeds of the sale of my
car which is still in your possession. “Sgd. Drawer”
Item 2: “I promise to pay X the amount of P5,000 on demand.”Sgd. M
a. Both items are negotiable
b. Both items are non-negotiable
c. Item No. 1 is negotiable, while item No. 2 is non-negotiable
d. Item No. 1 is non-negotiable, while item No. 2 is negotiable

142. Discharge of promissory note. Which is the exception?

a. If the holder intentionally shredded and burned the instrument
b. If the instrument is paid to the holder by the party accommodated
c. If the instrument is paid to the holder by the accommodation maker
d. If the maker of the instrument became the holder thereof

143. Which of the following examples is not negotiable?

a. “To X: PLEASE pay to the order of Y P5,000 on demand.” Sgd: D
b. “To X: Pay to the order of yourself the amount of P50,000 in two EQUAL MONTHLY INSTALLEMENTS beginning
May 31, 2015.” Sgd: D
c. Pay to P or bearer the amount of P50,000 on June 25, 2015 or deliver to him ten (10) dogs AT HIS ELECTION.”
Sgd: D
d. “I promise to pay X or order P5,000 AS SOON AS I HAVE THE MONEY.” Sgd: M

144. Which of the following can be a partnership?

a. Karen and Sharon form a charitable organization in which they received donations to give to their favorite charities

14
 b. Frank and Pablo are members of a union at work that has 150 members
c. Janice and Stanley form a club to encourage health among members
d. None of the above

145. Which of the following statements is correct with respect to a limited partnership?
a. A limited partner may not be an unsecured creditor of the limited partnership
b. A general partner may not also be a limited partner at the same time
c. A general partner may be a secured creditor of the limited partnership
d. A limited partnership can be formed with limited liability for all partners

146. Sydney, Bailey and Calle form a partnership. During the first year of operation, the partners have fundamental questions
regarding the rights and obligations of the partnership as well as the individual partners. Which of the following questions
can correctly be answered in the affirmative?
I. Is the partnership allowed legally to own property in the partnership’s name?
II. Do the partners have a joint and several liability for breaches of contract of the partnership
III. Do the partners have joint and several liability for tort actions against the partnership?
a. I only
b. I and II only
c. II and III only
d. I, II and III

147. In a general partnership, which of the following acts must be approved by all the partners?
a. Dissolution of the partnership
b. Admission of a partner
c. Authorization of a partner
d. Conveyance of real property owned by the partnership

148. Which of the following is (are) true of a limited partnership?

I. Limited partnership must have at least one general partner
II. The death of a limited partner terminates the partnership
a. I only
b. II only
c. Neither I nor II
d. Both I and II

149. Which of the following is (are) true concerning corporations?

a. Directors owe a fiduciary duty to the corporation
b. Officers owe a fiduciary duty to the corporation
c. Both of the above are true
d. Both of the above are false

150. McGarry is an officer of Norton Corporation. McGarry has committed a tort while acting for Norton Corporation within the
scope of his authority. Which of the following is (are) true?
a. McGarry is liable for the tort committed
b. Norton Corporation is liable for the tort committed
c. Both McGarry and Norton are liable for the tort committed
d. Neither McGarry nor Norton are liable for the tort committed

151. The apparent authority of a partner to bind the partnership in dealing with third parties
a. Will be effectively limited by a formal resolution of the partners of which third parties are aware
b. Will be effectively limited by a formal resolution of the partners of which third parties are unaware
c. Would not permit as partner to submit a claim against the partnership to arbitration
d. Must be derived from the express powers and purposes contained in the partnership agreement

152. Which of the following is not true of a general partnership?

a. Ownership by the partners may be unequal
b. It is a separate legal entity
c. An important characteristic is that the partners share in the profits equally
d. Each partner has an equal right to participate in management

153. Which of the following is not a power of the board of directors?

a. May select the officers of the corporation
b. May declare the dividends to be paid to the shareholders
c. May amend the Articles of Incorporation
d. To amend by-laws of the corporation

154. The Monetary Board is composed of:

a. 5 officials
b. 4 officials
c. 7 officials
d. 6 officials

155. The Anti-Money Laundering Council is composed of:

a. 4 officials
b. 3 officials
c. 5 officials

15
 d. 7 officials

156. The Chairman of PDIC Board is:

a. BSP Governor
b. Secretary of Finance
c. BIR Commissioner
d. SEC Commissioner

157. Transactions covered by AMLA is:

a. P500,000 within one banking day
b. Over P500,000 within one banking day
c. P300,000 within one banking day
d. Over P300,000 within one banking day

158. The Chairman of AMLC is:

a. BSP Governor
b. Secretary of Finance
c. Chairman of SEC
d. SEC Commissioner

159. Majority of this body is required by law to be lawyers:

a. Monetary Board
b. PDIC
c. AMLC
d. SEC

160. Period within which the depositor can recover his bank deposit from PDIC:
a. Within one year from takeover by the receiver
b. Within two years from takeover by the receiver
c. Within six months from takeover by the receiver
d. Within 18 months from takeover by the receiver

161. R.A 1405 is popularly known as:

a. PDIC Law
b. Secrecy of Bank Deposit Law
c. New Central Bank Act
d. Anti-Money Laundering Law

162. The law that punishes the issuance of bouncing checks:

a. BP 68
b. BP 22
c. R.A 3591
d. R.A 9160

163. Escheated bank deposits which were not claimed for over 10 years are remitted to:
a. Bureau of Internal Revenue
b. Central Bank
c. PDIC
d. Bureau of Treasury

164. Voluntary dissolution of a cooperative requires the approval of:

a. Majority of the Board and 2/3 of the members
b. Majority of the Board and 3/4 of the members
c. Majority of the Board and Majority of the members
d. Majority of the Board only

165. The minimum paid up capital in a cooperative is:

a. P5,000
b. P10,000
c. P15,000
d. P100,000

166. To remove the Board Director under the Cooperative Code requires the approval of:
a. 2/3 of the members
b. 3/4 of the members
c. Majority of the members
d. All members

167. The quorum needed for a valid General Assembly for cooperatives::
a. Majority of the members
b. 25% of the members
c. 2/3 of the members
d. 3/4 of the members

168. Cooperatives can legally exist for:

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 a. 50 years extendible for another 50 years
b. 50 years extendible for another 25 years
c. 50 years extendible for another 20 years
d. It depends on the term provided in the Cooperative Charter

169. The KYC Rule can be found in this Law:

a. Secrecy of Bank Deposit Law
b. PDIC Law
c. Anti Money Laundering
d. General Banking Law

170. Under the New Central Bank Act, the BSP Governor must be:
a. At least 35 years old
b. At least 40 years old
c. At least 45 years old
d. At least 50 years old

171. 1st statement: The first major function of PDIC is to act as liquidator of closed banks.
2nd statement: The principal function of AML Council is to act as financial intelligence unit.
a. True, True
b. False, False
c. False, True
d. True, False

172. 1st statement: Voluntary Insolvency is filed by 1 creditor only.

2nd statement: Minors can open any bank account if at least 7 years, can read and write and with sufficient discretion.
a. True, True
b. False, False
c. False, True
d. True, False

173. The DOSRI Rule can be found in this Law:

a. Anti-Money Laundering Law
b. General Banking Law
c. Secrecy of Bank Deposit Law
d. Insolvency Law

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