WWW - Mcnp.edu - PH Adminoffice@mcnp - Edu.ph: International School of Asia and The Pacific

INTERNATIONAL SCHOOL OF ASIA AND THE PACIFIC
Alimannao Hills, Peñablanca, Cagayan

Telefax No.: (078) 304-1010
Website: www.mcnp.edu.phE-Mail Address: adminoffice@mcnp.edu.ph
COLLEGE OF BUSINESS EDUCATION

ACCOUNTANCY DEPARTMENT
Subject Title : REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

Term : FINAL Examination
Semester : Second, Fiscal Year: 2020 – 2021
Platform Used : INSTRUCTIONAL LEARNING GUIDE or LEARNING
MANAGEMENT SYSTEM
Name: ______________________________Year and section: ____________________

Proctor: _____________________________________ Score: _____________________
DIRECTIONS: Read and analyze the questions carefully.

1. Ensure you have a strong and stable internet connection.
2. Do not open your notes during the exam. Scanning your notes during the exam will make
you lose time, remember the exam is time-bounded. Instead, review your lesson thoroughly
ahead of time.
3. Make sure you have viewed all your lessons in the learning management system or in your
instructional learning guide.
4. Ensure to finish your exam in the allotted time.
5. Keep the following in mind:
• Attempt – You have only one attempt to take on this exam
• Timing - You will need to complete your attempt in one sitting, as you are allotted 1
hour and 30 minutes for 100 items to finish the entirety of the exam.
6. To start, click the "Start Attempt Button". When you finish the exam click “Finish Attempt”
button, then the “Submit all and finish button”.
Materials Needed:
 Desktop PC or Laptop or Smart Phone or Tablet PC
-------------------------START OF EXAMINATION-------------------------
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1. A offered for sale to B 20 cavans of wagwag rice and fixed the price per cavan at P10 over
the price offered at Z’s store in Cainta Market. The price is
A. Not certain because the price at Cainta Market is not stated
B. Certain because it has got reference to another thing which is certain
C. Certain because there is a price ceiling for price of land
D. Not certain so court may fix the price
ANSWER: B
2. X sold his motor vehicle to V who bought it for P200,000. It turned out however, that X has
2 motor vehicles: Toyota valued at P230,000 and Lancer valued at P220,000. Which is correct?
A. There is no contract of sale between X and V
B. The parties may ask for interpretation or reformation
C. The parties can ask for annulment of the contract
D. V may choose between the Toyota or Lancer
ANSWER: A
3. X offers to V 100 electric fans for P80,000 payable in 60 days with 12% interest per
annum. V accepted the offer by telegram provided that interest is reduced to 6%. If there is
no further communication between X and V relating to the terms
A. The contract is perfected because of the acceptance by V
B. There is no contract yet between X and V because V made a counter offer
C. The contract is perfected under the terms of X
D. There is no contract yet unless v gives earnest money
ANSWER: B
4. X owns 50 mango trees bearing fruits, ready for harvest. She told all the fruits of all the
trees to V who paid P100,000. X told V that he can harvest her fruits anytime he likes and
pointing at the mango trees. For legal purposes, X has fulfilled her obligation to deliver the
mango fruits to V by
A. Traditio longa manu
B. Traditio brevi manu
C. Traditio constitutum possessorium
D. Execution of a public instrument
ANSWER: A
5. X sold her specific car to V for P200,000 payable in 5 equal installments. X delivered the car
to V but a mortgage was constituted on the car to answer for the unpaid installments. V paid
the first 2 installments but failed to pay the last 3 installments. X foreclosed the mortgaged
property and sold it at public auction for P100,000. Which is correct?
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A. X can recover from V the balance of P20,000 even if there is no stipulation to that effect
B. X can recover from V the balance of P20,000 if there is stipulation to that effect
C. X cannot recover the deficiency except if there is stipulation to that effect
D. X cannot recover the deficiency even if there is stipulation to the contrary
ANSWER: D
6. Ownership of the thing sold is

A. Retained by the seller in “sale or return
B. Transferred to the buyer upon constructive or actual delivery of the thing sold
C. Acquired by the buyer upon perfection of the contract
D. Transferred to the buyer upon acceptance of the price
ANSWER: B
7. X sold his horse to Y for P40,000. No payment has yet been made and the sales document
does not provide the date of delivery. Before delivery and payment the horse gave birth to a
baby horse, which is correct?
A. Y is entitled to the baby horse which was born after the perfection of the contract
B. X is entitled to the fruit (baby horse) as Y has not paid the price yet
C. X is entitled to the (baby horse) because it was born before his obligation to deliver arises
D. Y should pay additional amount for the baby horse to be entitled to it
ANSWER: A
8. A contract of sale is in the stage of conception when

A. There is meeting of the minds
B. Negotiations are in progress
C. The parties come to an agreement
D. The contract is perfect
ANSWER: B
9. A seller sold to a buyer a piece of jewelry at a price of P25,000. The contract provides that
the buyer will pay the seller cash, P20,000 and for the balance, the buyer will give the seller a
micro oven worth P5,000. What is the nature of the contract?
A. Sale
B. Partly sale partly barter
C. Barter
D. Commodatum
ANSWER: A
10. X, the guardian of V, sold V’s house and lot worth P480,0000 for P430,000
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A. The contract can be rescinded because of inadequacy of price
B. The contract cannot be rescinded because there is no fraud, mistake or undue influence
C. The contract cannot be rescinded because all the elements of a contract are present
D. The contract can be rescinded by X.
ANSWER: A
11. X leased to V a 5 Freezer for two years at a lease rental fee of P1,000 per month and
signed an option in favor of V to buy the freezers at the end of the term of the lease at
P50,000. All rental fee paid are to be considered as partial payment of the sale. After 12
months V was able to pay the rental fee for 9 months and was in arrears for three months. X
terminated the lease contract and repossessed the freezers. The consequence of the
transaction is
A. X can collect the rental fees for three months which are in arrears.
B. X can collect the rental fees for the unexpired 12 months of the lease contract.
C. When X took possession of the freezer, he has no further action against V
D. X in terminating the lease and repossessing the freezer is obliged to refund the 9 months
rental fee, paid by V even if there is a stipulation to the contrary.
ANSWER: C
12. X sold his car to Z for P60,000. No date was fixed for the performance of the obligation of
the seller and the buyer. The obligation of X is
A. To deliver the car immediately because the sale is a perfected contract
B. To deliver the car only after Z writes to X demanding the delivery of the car.
C. To deliver the car only after Z pays the P60,000
D. To rescind the contract because there is no time fixed for the delivery
ANSWER: C
13. I. The vendor need not be the owner at the time the sale is perfected. It is sufficient that
he is the owner at the time the thing sold is delivered.
II. The sale of a vain hope or expectancy is voidable.
A. First statement is true, second statement is false.
B. First statement is false, second statement is true.
C. Both statements are true.
D. Both statements are false.
ANSWER: A
14. I. There may be a contract of sale of goods, whose acquisition by the seller depends
upon a contingency which may or may not happen.
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II. If the consideration of the contract consists partly in money and partly in another thing, it
shall be considered a barter if the value of the thing given as a part of the consideration
exceeds the amount of the money or its equivalent.
D. Both statements are false
ANSWER: A
15. I. If the price is grossly inadequate, the sale is void.

II. Whenever option money is given in a contract of sale, it shall be considered as part of the
price and a proof of the perfection of the contract.
ANSWER: D
16. I. Earnest money and option money both apply to perfected sale.
II. In a contract of sale of personal property the price of which is payable in installment, the
vendor may cancel the sale should the vendee fail to pay.
ANSWER: D
17. I. Should the vendee’s failure to pay, cover two or more installments, the vendor may
foreclose the chattel mortgage on the thing sold but he shall have no further action against
the purchaser to recover any unpaid balance of the price, except if there is an agreement to
the contrary.
II. Sale is a consensual contract; therefore, delivery or payment is not essential for perfection.
ANSWER: B
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18. I. The ownership of the thing sold shall be transferred to the vendee upon perfection of
the contract.
II. An unaccepted unilateral promise to buy or to sell a determinate thing for a price certain is
binding upon the promissory.
ANSWER: D
19. I. The husband and the wife cannot sell property to each other, as a rule.
II. The sale of a piece of land or interest therein when made thru an agent is void unless the
agent’s authority is in writing even if the sale itself is in s public instrument and has been
registered.
ANSWER: C
20. I. The expenses for the execution and registration of the sale shall be borne by the
vendee, unless there is a stipulation to the contrary.
II. If the same thing should have been sold to different vendees the ownership shall be
transferred to the person who may have taken possession thereof in good faith.
ANSWER: D
21. I. Any stipulation exempting the vendor from the obligation to answer for eviction shall
be void.
II. The vendor is responsible to the vendee for any hidden faults or defects in the thing sold
only if he was aware thereof.
ANSWER: D
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22. I. If the animal sold should die within three (3) days after its purchase, the vendor shall
be liable to the vendee.
II. The fixing of the price can never be left to the discretion on one of the contracting parties.
However, if the price fixed by one of the parties is accepted by the other, the sale is perfected.
ANSWER: B
23. I. Option money is considered as part of the purchase price while earnest money is not.
II. The Maceda Law refers to the sale of personal property by installments while the Recto Law
refers to the sale of real property by installments.
ANSWER: D
24. I. If two or more animals are sold together, whether for lump sum or for a separate price
for each of them, the redhibitory defect of one shall give rise to the redhibition of the others.
II. There is no warranty against hidden defects of animals sold at fairs or at public auctions or
of livestock sold as condemned.
ANSWER: B
25. I. The ownership in the thing shall not pass to the purchaser until he has fully paid the
price.
II. If at the time the contract of sale is perfected, the thing which is the object of the contract
has been partially lost, the contract shall be without effect.
ANSWER: D
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26. I. Where the seller of goods has a voidable title thereto, but his title has not been
avoided at the time of the sale, the buyer acquires a good title to the goods.
II. If the vendee has renounced the right to warranty in case of eviction, and eviction should
take place, the vendor shall only pay the value which the thing sold had at the time of sale.
ANSWER: A
27. I. Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by
installment.
II. In case of doubt, a contract purporting to be an equitable mortgage shall be construed as a
sale with a right to repurchase.
ANSWER: A
28. I. The creditors of the vendor cannot make use of the right of redemption against the
vendee, until they have exhausted the property of the vendor.
II. Sale is a real contract because delivery is necessary to transfer ownership to the buyer.
ANSWER: A
29. I. Where goods are put up for sale by auction in lots, each lot is the subject of a separate
contract of sale.
II. A right to bid may be reserved expressly by or on behalf of the buyer, unless otherwise
provided by law or by stipulation
ANSWER: A
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30. I. A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.
II. An accepted unilateral promise to buy or to sell a determinate thing for a price certain is
binding upon the promisee if the promise is supported by a consideration distinct from the
price.
ANSWER: A
31. It is a unilateral promise or offer to sell or to buy a thing which is not accepted creates no
juridical effect or legal bond. Such unaccepted imperfect promise or offer is called______.
A. Offer
B. Policitation
C. Option
D. Order
ANSWER: B
32. I. If the thing is lost before perfection, the seller and not the one who intends to purchase
it bears the loss in accordance with the principle that the thing perishes with the owner (res
perit domino).
II. If the thing is lost at the time of perfection, the contract is void or inexistent.
ANSWER: C
33. I. If the thing is lost after perfection but before its delivery, that is, even before the
ownership is transferred to the buyer, the risk of loss is shifted to the buyer as an exception to
the rule of res perit domino.
II. If the thing is lost after delivery, the buyer bears the risk of loss following the general rule
of res perit domino.
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ANSWER: C
34. It occurs where a seller sells things as being of a particular kind, the buyer not knowing
whether the seller’s representations are true or false, but relying on them as true.
A. Sale by sample
B. Contract for a piece of work
C. Installment sale
D. Sale by description
ANSWER: D
35. Something of value given by the buyer to the seller to show that the buyer is really willing,
and to bind the bargain.
A. Option Money
B. Earnest Money
C. Order Money
D. Auction Money
ANSWER: B
36. The vendor of personal property payable in installments may exercise any of the following
remedies, except:
A. Elect fulfillment upon the vendee’s failure to pay.
B. Cancel the sale, if the vendee shall have failed to pay two or more installments.
C. Foreclose the chattel mortgage, if one has been constituted, if the vendee shall have failed
to pay two or more installments.
D. None of the above
ANSWER: D
37. I. The expenses for the execution and registration of the sale shall be borne by the
vendee, unless there is a stipulation to the contrary.
II. Expenses incurred subsequent to the transfer of title are to be borne by the buyer, unless
caused by the fault of the seller.
ANSWER: B
38. I. The expropriation of property for public use is governed by special laws.
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II. Expropriation must be decreed by competent authority and for public use and always upon
payment of just compensation.
ANSWER: C
39. Such incapacity exists only with reference to certain persons or a certain class of property.
A. Absolute Incapacity
B. Partial Incapacity
C. Selective Incapacity
D. Relative Incapacity
ANSWER: D
40. I. Necessaries are those things which are needed for sustenance, dwelling, clothing,
medical attendance, education and transportation according to the financial capacity of the
family of the incapacitated person.
II. Generally, the contracts entered into by a minor and other incapacitated persons (e.g.,
insane or demented persons, deafmutes who do not know how to write), are void.
ANSWER: A
41. As to the character of the offense, “Money Laundering” is

A. Civil
B. Criminal
C. Political
D. Natural
ANSWER: C
42. Suspicious transactions shall be reported by covered persons. Which of the following is
least likely considered as a covered person?
A. Bank or banking institution
B. Insurance company
C. Jewelry dealer in precious metal
D. Lawyer acting as independent legal counsel
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ANSWER: D
43. To which specific body shall covered persons report the occurrence of suspicious
transactions?
A. Commission on Audit
B. Bangko Sentral ng Pilipinas
C. Anti-Money laundering Council
D. Philippine Deposit Insurance Commission
ANSWER: C
44. Within how many days shall covered persons report to the AMLC the occurrence of
suspicious transactions?
A. 1 working day
B. 3 working days
C. 5 working days
D. 7 working days
ANSWER: C
45. The Sogod Hotel chain reproduces DVD’s, distributes the copies thereof to its
hotels and makes them available to hotel guests for viewing in the hotel
guest rooms and charges a separate fee for the use of the DVD players. Is
Sogod Hotel liable for infringement?
A. Yes, because the reproduction of the DVD’s violate the copyright or economic
rights of the owner of the film. The hotel charge fees for the use of DVD
player as well as there are room charges, they earn gain from the use of the DVD
because it entice the guests to check-in in their hotel.
B. No, the DVD viewing is done privately in the hotel guest rooms.
C. None of the choices
D. No, the DVD viewing is part of the hotel services and it is the use of the DVD
players that is charged and not the cost of the DVD.
ANSWER: A
46. It shall refer to the financial condition of a debtor that is generally unable to pay its or his
liabilities as they fall due in the ordinary course of business or has liabilities that are greater
than its or his assets.
A. Bankrupt
B. Insolvent
C. Indebted
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D. Dissolved
ANSWER: B
47. Voluntary proceeding differs from involuntary proceeding in that it is initiated by the
A. Court
B. Insolvent debtor
C. Creditors
D. Receiver
ANSWER: B
48. Involuntary proceedings are initiated by the

A. Court
B. Insolvent debtor
C. Creditors
D. Receiver
ANSWER: C
49. An insolvent debtor may initiate involuntary proceeding by filing a petition for rehabilitation
with the court only if with the prior approval of the following (choose the incorrect one):
A. The owner in the case of a sole proprietorship
B. The majority of the partners in the case of a partnership
C. The vote of at least 2/3 of the members of a non-stock corporation, in a member’s meeting
called for the purpose
D. The majority of the vote of the board of directors or trustees and authorized by the vote of
the stockholders representing at least majority of the outstanding capital stock, in a meeting
called for the purpose
ANSWER: C
50. Which of the following creditor or group of creditors may initiate involuntary proceeding
against the debtor by filing a petition for rehabilitation with the court?
A. A creditor with a claim of ₱500,000
B. Group of creditors with aggregate claim of ₱750,000
C. A creditor with a claim of ₱800,000
D. Group of creditors with aggregate claim of ₱1,000,000
ANSWER: D
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INTERNATIONAL SCHOOL OF ASIA AND THE PACIFIC

Alimannao Hills, Peñablanca, Cagayan

COLLEGE OF BUSINESS EDUCATION

Subject Title : REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

Name: ______________________________Year and section: ____________________

DIRECTIONS: Read and analyze the questions carefully.

COLLEGE OF BUSINESS EDUCATION

COLLEGE OF BUSINESS EDUCATION

6. Ownership of the thing sold is

8. A contract of sale is in the stage of conception when

COLLEGE OF BUSINESS EDUCATION

COLLEGE OF BUSINESS EDUCATION

15. I. If the price is grossly inadequate, the sale is void.

COLLEGE OF BUSINESS EDUCATION

COLLEGE OF BUSINESS EDUCATION

COLLEGE OF BUSINESS EDUCATION

COLLEGE OF BUSINESS EDUCATION

COLLEGE OF BUSINESS EDUCATION

COLLEGE OF BUSINESS EDUCATION

41. As to the character of the offense, “Money Laundering” is

COLLEGE OF BUSINESS EDUCATION

COLLEGE OF BUSINESS EDUCATION

48. Involuntary proceedings are initiated by the

COLLEGE OF BUSINESS EDUCATION

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