Novation: A. B. Subrogation C. Delegacion D. Expromission

RFBT
TEST 1
1. It is a mode of extinguishing obligation wherein debitum pro debito.

A. Novation
B. Subrogation
C. Delegacion
D. Expromission
2. Compensation is not allowed in the following cases, except:

A. Assignment
B. Depositum
C. Commodatum
D. Support
3. This is essentially gratuitous and requires the acceptance by the obligor

A. condonation
B. confusion of rights
C. merger
D. payment
4. Isidro Aragon died on November 26, 2014, in the city of Manila, leaving a will. In
the will, the deceased made certain legacy in favor of his only child: Jose Aragon.
The soap factory together with the equipment was value at P1,000,000. However,
Isidro has a credit on favor of Iñigo Zobel amounting to P700,000.00
After the death of Isidro Aragon, some pieces of equipment that were attached to
the soap factory, such as a Buick jeetney, a Chevrolet truck and a Ford truck,
were sold by his heir on June 28, 2015. The value of this equipment amounts to
P300,000.00. The building in which the factory of soap was housed was leased by
Jose with a monthly rental of P10,000.00, so that he received a total of P200,000
as rental for twenty months, and when he later decided to reside in the building
he never paid any rental therefor as it was his duty to do.
Jose apparently had taken some steps to sell the property, perhaps with the
purpose of paying off Iñigo, but his efforts proved futile and so far he have not
paid any of his father’s loan, while the building is fast deteriorating and is
continuously menaced by destruction by fire without hope of recovery because it
has never been insured.
How much can Iñigo collect from Jose?
A. P500,000
B. P200,000
C. P300,000
D. P1,000,000
5. Base of the following information:

Loan 1: Jairah owes Olan P6,000 due on May 1, 2021
Loan 2: Olan owes Jairah P10,000 due on June 15, 2021
Loan 3: Jairah owes Olan P4,000 due on July 24, 2021
Jairah assigned the loan 2 to Monica on July 1 and notified Olan of the
assignment. May Olan set up compensation against Monica?
A. If Olan consented to the assignment, he must pay Monica P10,000.00
B. If Olan was not informed by Jairah, he may set up against Monica the P6,000.00
which Jairah owes him.
C. If Olan objected to the assignment, and he only finds out about it only on July 25,
compensation is not allowed.
D. If Olan was not informed by Jairah, he may pay Monica the P4,000.00 which
matures after the date of assignment
6. The following are the essential elements of a contract, except:

A. juridical tie
B. consent
C. subject matter
D. cause
7. The following are the stages of a contract, except:

A. duration
B. preparation
C. birth
D. death
8. It is a meeting of the minds between two persons whereby one binds himself,
with respect to the other to give something or to render some service.
A. contract
B. obligation
C. sale
D. law
9. The following are the classification of novation, except:

A. none of the choices
B. personal
C. real
D. express
10. These are the requisite that must concur for extinctive novation to take place,
except
A. The old obligation is not totally extinguished
B. The old obligation is valid
C. The must be an agreement of the parties concerned to the new contract
D. The new obligation is valid
11. Novation is equivalent or synonymous to alteration, modification or

amendment. Novation is never presumed.
A. First statement is false. Second statement is true
B. Second statement is false. First statement is true
C. Both are true
D. Both are false
12. For an implied novation to arise, it is essential that there is an incompatibility

between the old and new contract. Binding parties must declare in their new
executed contract that they agreed to extinguish the old one and that the former
is on every point incompatible with the latter.
A. Both are true
B. First statement is false. Second statement is true
C. Second statement is false. First statement is true
D. Both are false
13. It is a substitution of the old debtor is upon the proposal of the old debtor
himself and the proposal was accepted by the new debtor and the creditor
A. Expromision
B. Delegacion
C. Subrogation
D. Novation
14. If there is an agreement between the parties that even if the new obligation is
invalid, the old obligation shall still be extinguished in any, event, then the said
obligation shall be extinguished. If the new obligation is annulled, the old
obligation shall subsist and the novation shall be set aside.
A. First statement is false. Second statement is true
B. Second statement is false. First statement is true
C. Both are true
D. Both are false
15. The mother of the John Villarroel owed money from the spouses Estrada in
the amount of P1,000 payable after 7 years. When the spouses Estrada died,
leaving as sole heir Bernandino Estrada, Villaroel was made to sign a document
regarding the debt. Estrada then instituted an action to recover the P1,000 debt.
The Judge of Laguna decided in favor of Estrada, condemning Villarroel to pay
the full amount with legal interest of 12% per year. Has Estrada still the right to
recover?
A. No. The debt is already prescribed
B. Yes. There is a novation when Villarroel agreed to resume the obligation of his
mother in law.
C. Yes. Villarroel is estopped when he agreed to pay the obligation of his mother in
law.
D. No. The obligation is between the old debtor and creditor
16. A condition which if imposed on an obligation will be disregarded and will

therefore make the obligation immediately demandable
A. If Lulu will not rise from the dead
B. If Lala kills Lele
C. If Lili passed the CPA board exam
D. If Lolo commits suicide
17. This obligation is demandable at once

A. With a suspensive condition
B. When my means permit me to do so
C. With a period in diem
D. When it depends on the happening of a specified event
18. In an obligation to give a determinate thing, what rights are available to the
creditor? I. To compel specific performance II. To ask that the obligation be
complied at the expense of the debtor
A. First statement is true. Second statement is false
B. First statement is false. Second statement is true
C. Both statement are false
D. Both statement are true
19. This takes place when something is received when there is no right to
demand it, and it was unduly delivered through mistake
A. Negotiorum Gestio
B. Vinculum Juris
C. Prestation
D. Solutio Indebiti
20. Demand is not necessary to incur delay when
A. Creditor refuses the performance without just cause
B. Time is the controlling motive
C. The debtor is guilty of nonperformance
D. If the obligation bears interest
21. In what instance may be consider that there is no delay

A. In positive obligation
B. In obligation arising from a crime
C. In civil obligation
D. In natural obligation
22. In accion subrogatoria the creditor may exercise all of the rights and bring all
the action which the debtor may have against third person if
A. Creditor has the right of return against the debtor.
B. If the account is personal
C. The debtor’s acts are fraudulent
D. The debtor performed an act subsequent to the contract, giving advantage to
other person
23. In accion pauliana, rescission which involves the right of the creditor to attack
or impugn by means of rescissory action any act of the debtor which is in fraud
and to the prejudice of his right as creditor provided
A. The debtor performed an act subsequent to the contract, giving advantage to
other person
B. The debt is due and demandable
C. There is failure of the debtor to collect his own debt from third person either
through malice of negligence
D. The debtors assets are insufficient
24. When the thing deteriorates with the debtors fault, the creditor may choose
one of the following
A. Rescission
B. Mutual restitution
C. Suffer the deterioration
D. Institute an action for negligence
25. It is a future and certain event upon the arrival of which the obligation subject
to it either arises or terminated
A. Period
B. Fortuitous event
C. Condition
D. Date and Time
26. MULTIPLE CHOICE:

Which of the following is not correct in rescission?
A. Can be demanded by any of the contracting parties
B. Cannot be availed when the party who has been damaged has other legal
remedy
C. The person who seeks rescission must be able to return what he ought to return
D. The object of the contract is not in the possession of third person who have
acquired it in good faith
27. If an obligation is with a penal clause, I. Proof of actual damages suffered by

the creditor is not necessary in order that the penalty may be demanded. II. When
the debtor is guilty of fraud in the fulfillment of the obligation, the creditor can
demand payment of damages and interest in addition to penalty.
A. True, True
B. False, True
C. False, False
D. True, False
28. A, B and C solidary owe D and E P30,000. D remitted the entire obligation in
favor of A without the consent of E. The effect is
A. A cannot recover from B and C because remission in her favor extends to the
benefit of B and C
B. A can recover from B and C their respective share of the debt
C. The obligation is not extinguished until A collects from B and C
D. The obilgation is not yet extinguished until E paid by D of her share of the credit
29. If a third person pays an obligation. What are the rights, which are available to
him if he pays the obligation with the knowledge and consent of the debtor? I. He
can recover from the debtor the entire amount which he had paid. II. He is
subrogated to all the rights of the creditor.
A. True, True
B. False, True
C. False, False
D. True, False
30. If the law does not state the diligence which is to be observed in the
performance of an obligation, the obligor is to observe
A. Ordinary Diligence
B. Extraordinary Diligence
C. Diligence of a father of a good family
D. Utmost Cares
31. Facultative are distinguished from alternative obligation

A. The right of choice is given only to the debtor
B. Various things are due, but giving of one is sufficient
C. If one of the prestations is illegal, the others may be valid and the obligations
remains
D. If it is impossible to give all except one, that last one must still be given.
32. I. The loss or deterioration of the thing intended as a substitute through the
negligence of the obligor, does not render him liable. II. A person alternatively
bound by different prestation shall completely perform one of them.
A. True, True
B. False, True
C. False, False
D. True, False
33. I. When one of the parties has brought an action to enforce the instrument, he
cannot subsequently ask for its reformation. II. The injured party may seek
rescission, even after he has chosen fulfillment if the latter should become
impossible.
A. True, True
B. False, True
C. False, False
D. True, False
34. Culpa aquiliana as distinguished from culpa contractual

A. He source of liability is the defendant's negligent act or omission itself
B. Proof of due diligence in the selection and supervision of employees is not
available as a defense
C. Proof of the contract and its breach is sufficient prima facie to warrant recovery
D. The negligence of the defendant is merely an incident in the performance of the
obligation
35. If there is no stipulation and the undertaking is to deliver a determinate thing,

the payment shall be made
A. Wherever the thing might be at the moment the obligation was constituted
B. Wherever the thing might be at the moment the obligation is to be fulfilled
C. At the domicile of the debtor
D. At the domicile of the creditor
36. 1. A, B and C executed a promissory note binding themselves to pay P9000 to

X, Y and Z. The note is due and demandable. Can creditors proceed against A for
payment of the entire debt?
A. No, each creditor can collect only P1,000 from A.
B. No, each creditor can collect only P3,000 from A.
C. Yes, either X, Y and Z can collect P9,000 from A.
D. Yes, since the promissory note is silent with respect to the rights of the creditors,
the obligation is presumed to be solidary.

X, Y and Z. The note is due and demandable. Suppose that C is insolvent, can A
and B liable for C's share in the obligation?
A. No, the debts are considered distinct from one another.
B. No, only A or B but not both will be liable.
C. Yes, but A and B will be liable proportionately.
D. Yes, the debt shall be presumed to be divided into as many equal shares as
there are debtors.

X, Y and Z. The note is due and demandable. Suppose that the obligation is about
to prescribe, but X wrote a letter to A demanding for payment of the entire debt.
Will this have the effect of interrupting the running of the period of prescription?
A. Yes, insofar as a is concern but not with regard to B and C.
B. No, because the demand should have been made to all the debtors.
C. Yes, because the demand made by X covers the entire debt and will therefor
inue to the benefit of the other creditors.
D. No, all creditors should have made the demand.

to prescribe, and prescription sets in, how much can Y collect from A?
A. P0.
B. P1,000
C. P3,000
D. P9,000
to prescribe, and prescription sets in, how much can X collect from A?
A. P1,000.
B. P0
C. P3,000
D. P9,000
41. In quasi-delict, the liability of a person who is held liable for the fault or
negligence of another person who is under his care or responsibility shall cease
if.
A. He observed ordinary diligence to prevent the damage.
B. He observed the diligence of a father of a good family.
C. There was contributory negligence on the part of the person injured.
D. He was not present at the time of the act, hence it was not possible to prevent
the damage.
42. What is the effect of the loss of the prestations in alternative obligation where
the right of choice belongs to the creditor and the loss is due to the fault of the
debtor? First Answer: If only one remains the obligation still subsists, but it
ceases to be alternative as it becomes a simple obligation. Second Answer:If two
or more objects remains the obligation still subsists and the choice is limited to
the remaining objects, Third Answer: In none remains, the obilgation is
extinguished because the debtor chose not to give anything
A. All answers are wrong
B. All answers are correct
C. Only one answer is correct
D. The first and second answer are correct
43. Within what period must recovery be made if the debtor did not know that
payment was not yet due
A. Before maturity with regard to what was paid and even after maturity with regard
to the interest
B. Before maturity with regard to both what was paid and the interest
C. Even after maturity with regard to both the interest and what was paid
D. Before maturity with regard to the interest and even after maturity with regard to
what was paid
44. An assignor of credit warrants

A. Existence and legality of credit
B. Solvency of the debtor
C. Collectibility
D. Assurance of payment
45. A passenger on a bus was hurt, but in a criminal case against the driver, said
driver was acquitted. The victim now sues the owner of the truck for culpa
contractual. May the suit still prosper?
A. Yes, it is sufficient for him to prove the existence of the contract of carriage and
the injuries suffered.
B. No, this will constitute double jeopardy
C. No, the acquittal means that the guilt of the accused was not proven by proof
beyond reasonable doubt
D. Yes, provided he can prove the negligence of the driver.
46. A lost PI 00,000 in a card game called pusoy, but he had no more cash to pay
in full the winner at the time session ended. A promised to pay B, the winner, two
weeks thereafter. A failed to pay despite the lapse of two months, so B filed in
court a suit to collect the unpaid amount. Will the collection suit against A.
prosper?
A. No, because pusoy is fundamentally a game of chance.
B. Yes, if A made a negotiable promissory note.
C. Yes, whether or not a negotiable promissory note was made by A.
D. No, if A has no property to pay the obligation.
47. N, R and J solidarily bound themselves to deliver to S a Honda motorcycle

valued at P60,000. The obligation was not fulfilled through the fault of J.
Thereupon, S filed an action in court against N and the court awarded P72,000 to
S representing the value of the motorcycle plus damages. Which of the following
situations is valid?
A. If S succeeds in collecting the P72,000 from N, N in turn can collect from J
P32,OOO.
B. If N pays S the P72,000, N can collect from R and J P24,OOO each.
C. S has to collect P24,000 each from N Rand J to satisfy the court's award of
P72,000.
D. N can refuse to pay the penalty because it should be charged against J, the
guilty party.
48. A borrowed PI0,000 from B on Dec. 25, 2020. The debt is evidenced by a
promissory note executed by A wherein she promised to pay as soon as she has
the money or as soon as possible. B made several demands upon A for payment
the first, an oral demand was made on May 2, 2021 and the last written demand
was dated September 25, 2021 but up to now, there is no payment of debt. B sued
A, will the case prosper?
A. No, the obligation is one with a period and the period has not arrived yet
B. No, the obligation is subject to a suspensive condition
C. Yes, A is in default since May 2, 2021
D. Yes, A is in default since September 25, 2021
49. Which of the following is an obligation not to do?

A. Obligation of landowner in easement of way
B. Obligation of seller in a contract of sale
C. Obligation of painter in a contract of service
D. Obligation of depository in a contract of deposit
50. It is a juridical relation whereby a person may demand from another the
observance of a determinative conduct, and in case of breach, may demand
satisfaction from the assets of the latter
A. Civil obligations
B. Natural obligations
C. Moral obligations
D. Contracts
TEST 2
1. The following are the essential elements of a contract, except:

A. juridical tie
B. consent
C. subject matter
D. cause
2. The following are the stages of a contract, except:

A. duration
B. preparation
C. birth
D. death
3. It is a meeting of the minds between two persons whereby one binds himself,
with respect to the other, to give something or to render some service.
A. contract
B. obligation
C. sale
D. law
4. Jerrico owned Sophia P10,000 and he cannot pay the amount. He decide to
offer Sophia the used Canon video camera, worth about P10,000, and Sophia
accepted it.
A. Dation in payment
B. Pactum Commissorium
C. Subrogation
D. Ratification
5. Heinz tells Ken, I will lend you P500 if you give me your watch worth P2,000 as
security. If you don't pay at the end of the month, the watch will be mine. This is
an example of:
A. Pactum Commissorium
B. Dation in payment
C. Subrogation
D. Ratification
6. Money is a medium of exchange on commercial transactions. All money is a

legal tender.
A. True False
B. False False
C. True True
D. False True
7. Legal tender is currency that in a given jurisdiction can be used for the
payment of debts, public or private. A check is a legal tender and the offer of the
check in payment of a debt is a valid tender of payment.
A. Only the first statement is true
B. Only the second statement is true
C. Both are true
D. Both are false
8. Tender of payment is the manifestation made by the debtor to the creditor of

his desire to comply with his obligation, with the offer of immediate performance.
A certified check is a valid tender of payment.
A. Both are true
C. Only the first statement is true
D. Both are false
9. Consignation is the abandonment of property of the debtor for the benefit of
his creditors in order that the latter may apply the proceeds thereof to the
satisfaction of their credit. Cession is payment of the obligation made to the
court, instead to the creditor.
A. Both are false
C. Only the first statement is true
D. Both are true
10. Audrey owns Jairah P200,000. Kurt, ex-boyfriend of Audrey, pays Jairah the
whole amount. But before paying, he inform Audrey his intentions. This is an
example of
A. Subrogation
B. novation
C. cession
D. consignation
whole amount. But before paying, he informs Audrey his intentions. This is an
example of
A. Subrogation
B. novation
C. cession
D. consignation
whole amount. But before paying, he informed Audrey his intention to pay it and
Audrey agreed. This is an example of
A. Subrogation
B. novation
C. cession
D. consignation
13. K brosas loaned Aravela Gonzales amounting to P7 million. It is stipulated in

their notarized contract that in the event of breach, K Brosas is entitled to
P1,000,000 by way of liquidated damages. There was a breach and K Brosas did
not really suffer any injury by reason of said breach. Is K Brosas entitled to the
said damages?
A. Yes. The parties already lay down the amount of damages that will be due in
case of breach at the inception of the contract.
B. No. K Brosas did not really suffer any injury by reason of said breach.
C. Yes. But the court may lower the damages because it is unconscionable.
D. No. K Brosas has to prove in the court that she has proof of evidence.
14. 1. A and B are solidary debtors of C for P100,000 which is due on August 1,
2021, Thinking that the obligation is already due, A paid C P100,000 on August 1,
2020. What rights will A have on February 1, 2021?
A. A can recover P100,000 from C plus interest from August 1, 2020 to February 1,
2021
B. A can recover P50,000 reimbursement from B without interest
C. A can recover P50,000 reimbursement from B plus interest from August 1, 2020
to February 1, 2021
D. A cannot recover yet from either B because the obligation is not yet due or C
because the payment was voluntary
15. 2. On January 15, 2019, A obliged himself to give to B his only cow or only
dog or his only cat on December 25, 2019. On July 4, 2019, the cow died after
giving birth to a young cow. Two months later, the cat died due to the fault of A.
And on November 1, 2019, the dog died due to a fortuitous event. Which of the
following is true?
A. The obligation is extinguished
B. B is entitled to the young cow having been born after the perfection of the
contract
C. A is liable for the value of cat plus damages
D. B can require A to replace the cat by another cat which is equally satisfactory
giving birth to a young cow. Two months later, the cat died due to the fault of A. If
the dog is still alive, which of the following is not correct?
A. The obligation of A is converted into a simple obligation
B. B can require A to deliver the dog but without damages
C. A is not liable for the death of the cow
D. B can require to pay the value of the cat plus damages
giving birth to a young cow. Two months later, the cat died due to the fault of A.
And on November 1, 2019, the dog died due to a fortuitous event. If the right of
choice belongs to B, which of the following is true?
A. A is liable for the value of cat plus damages
B. The obligation is extinguished
C. B is entitled to the young cow having been born after the perfection of the
contract
D. B can require A to replace the cat by another cat which is equally satisfactory
18. A is indebted to solidary creditors W, Y and Z for P90,000 due on August 1,

2020 while W owes A P90,000 due on August 1, 2020. On August 1, 2020
A. Both obligations are extinguished by compensation
B. A’s obligation is extinguished up to P30,000
C. Either Y or Z can demanded P60,000 from A
D. Either Y or Z can demanded P90,000 from W
19. The standard diligence to be observed in the absence of law or agreement

A. diligence of a good father of a family
B. extraordinary diligence
C. diligence of a father of a good family
D. None of the answer are correct
20. A,B and C are obliged to deliver a specific cow to W and Y on August 1, 2020.
If today is August 1, 2020, which of the following is true?
A. If the debtor A cannot fulfill his share in the obligation, the obligation of B and C is
converted into a monetary obligation to pay the corresponding portion of the
value of the cow without damages
B. If the debtor A is insolvent, the obligation of A, B and C is converted into a
monetary obligation to pay the corresponding portion of the value of the cow
without damages
C. A demand may by W against A, B and C constitutes a valid demand against all
debtors
D. A demand by W and Y against A will make the debtors in delay
21. Which of the following contracts is valid

A. Contract of sale between an insane person and a deaf mute who does not know
how to read and write
B. Contract of sale between a husband and his paramour
C. Contract of sale between husband and wife who are under the conjugal
partnership of gains
D. Contract of donation between a wife as donee and her former boyfriend as donor
22. Which of the following contracts is void

A. Written sale of a piece of land with oral authority from the owner
B. Written sale of a gold necklace made without authority from the owner
C. Oral sale of a piece of land made by the owner to an insane person
D. Lease of a piece of land by a minor without a written authority from his
parents(the owner)
23. Which of the following statement is not correct?

A. Action for fraud cannot be waived
B. The validity and compliance of a contract cannot be left to the will of one of the
parties
C. In case of foreclosure and the price of the sale of less than the amount due, the
pledgee cannot recover any deficiency
D. Person who are prohibited by law to enter into contract of donation cannot form
universal partnership
24. To be valid and enforceable, the following contracts should be in writing,

except
A. Contract of donation of real property
B. Contract to pay interest on loan
C. Contract giving authority to an agent to sell a piece of land
D. Contract made in consideration of marriage
25. The contract is without effect unless ratified

A. Marriage between first degree cousins
B. Contract of sale between a guardian and his ward
C. Contract of sale between two insane person
D. Donation between husband and wife
26. A contract which in a person literally contract with himself is

A. Adhesion contract
B. Accessory contract
C. Unilateral contract
D. Auto contract
27. The statement "Contract shall be obligatory in whatever form they have been
entered into provided all the requisited for their validity are presents" refers to
A. Real contract
B. Formal contract
C. Solemn contract
D. Consensual contract
28. The prenuptial agreement of H and W, husband and wife, provides for
complete separation of property. Later H, with violence and intimidation forced W
to sell him (H), W's pieces fo jewelry. The sale is
A. Rescissible, if W suffered a lesion of more than 1/4 of the value of property
B. Unenforceable, if the value is at least P500
C. Voidable, because consent is vitiated
D. Void, the husband and wife are not allowed to sell property to each other
29. A owes B P10,000 with 12% interest. B owes C P1,200. It was agreed between
A and B that A would give the interest of P1,200 to C and C communicated his
acceptance of the stipulation between A and B. There is
A. Pactum Commissorium
B. Stipulation pour autrui
C. Compensation
D. Assignment
30. Which of the following contracts is unenforceable?

A. Contracts whose object is outside the commerce of men
B. Contract of sale by which the guardian acquires the property of his ward without
the approval of the court
C. Contract of sale by which the city mayor acquires a portion of the city part
pursuance to a city ordinance enacted by qa city council
D. Those were both parties are incapable of giving consent
31. Which of the following contract is valid

A. Oral contract of sale of an immovable property entered into by an agent who was
given authority orally by the principal
B. Oral partnership agreement where immovable property is contributed
C. Oral contract of agency giving authority to an agent to sell the land belonging to
the principal
D. Oral agreement to answer all expenses for the wedding reception if A marries B
32. Legal compensation is allowed when one of the debts

A. Arises from a sale of real property made by a minor to a capacitated person
B. Arises from the obligation of a depository
C. Consist in civil liability arising from a penal offense
D. Arises from a claim for support by gratuitous title
33. This is not a void contract
A. Those which are relatively simulated
B. Those whose object are outside the commerce of men
C. Those whose cause, object or purpose is contrary to law, morals, good customs,
public order of public policy
D. Those were the intention of the parties relative to the principal object of the
contract cannot be ascertained.
34. In which of the following is reformation not allowed? A. When the real
agreement is void B. Wills C. Simple donation inter vivos when no condition is
imposed
A. A and B
B. A and C
C. A, B and C
D. B and C
35. A bought a car from B, a minor, for P100,000. One week later, A discovered
that B was a minor at the time of sale so he filed a complaint in the court to annul
the sale. Will the case prosper
A. No, the right to annul the sale is given to B
B. Yes, B being a minor is incapacitated to enter into contract
C. Yes, B cannot file the action to annul the sale because he is a minor
D. No, unless there is lesion of more than 1/4 of the value of property
36. This does not invalidate the contract

A. Inadequacy of cause
B. False cause
C. Want of cause
D. Unlawful cause
37. Which of the following statement is legally correct

A. An action to declare contract void is imprescriptible
B. An action for annulment of contract is imprescriptible
C. An action to enforce judicially a natural obligation is prescriptible
D. An action for rescission of a contract prescribe in four years counted form the
execution of the contract
38. Which is not a characteristic of void or inexistent contract

A. Defense of illegality of the contract is available to third person whose interest are
not directly affected
B. The right to raise a defense of illegality cannot be waived
C. The action or defense for declaration of the nullity of the nullity or inexistense of
the contract does not prescribe
D. Not subject for ratification
39. The following contracts are void, except

A. A stipulation in a contract of lease whereby the landlord can go to court to eject
the tenant in case of failure for the latter to pay the rent agreed upon
B. A contract whereby X promised to live as the common law wife of Y in
consideration of P1,000,000
C. An agreement whereby A is to render service as a servant to B without
compensation as long as A has not paid him.
D. A stole a car of B. Later they entered into contract whereby B would not
prosecute A in consideration of P100,000
40. A obliged himself to give B P100,000 is B places among the top 10 in the CPA
board exam. Subsequently they agreed that A will give B P100,000 if B merely
passes the CPA board exam. This is an example of
A. Personal Novation
B. Real Novation
C. Implied Novation
D. Mixed Novation
41. The action to annul a voidable contract shall be brought by

A. The incapacitated party upon reaching the age of maturity
B. The party whose consent is vitiated by one of the causes that vitiate consent
C. None of the choices
D. All of the choices
42. With respect to contract, it is the agreement of the will of one party with that
of another with respect to the object and consideration
A. Consent
B. Offer
C. Option
D. Invitation
43. A. Will you buy this watch for P1000? B. I am willing to buy your car.
A. Only B is an offer
B. Both are offers
C. Both are not offers
D. Only A is an offer
44. A. A donated to B a real property the donation is made orally B. A sold to B a

real property, the sale is made orally.
A. Only B is a valid contract
B. Both are valid contract
C. Both are void contract
D. Only A is a valid contract
45. The action to annul a contract where one of the parties are incapable of giving
consent to the contract is extinguished by
A. rescission
B. novation
C. Subrogation
D. ratification
46. MULTIPLE CHOICE:

A intimidated B to marry A's pregnant daughter. After a year B would like to file
an action for the annulment of marriage but could not do so because A was
around to intimidate him. The marriage was
A. Unenforceable
B. Valid
C. Voidable
D. Void
47. C had E kidnapped and tortured for refurung to sell his (E's) land to C. As E
could no longer bear the physical pain inflicted upon him, he sign a document in
favor of C. The contract was
A. Void
B. Unenforceable
C. Valid
D. Voidable
48. The action for the annulment of voidable contract due to vitiated consent
caused by mistakes of fraud is 4 years counted from
A. The date the contract is perfected
B. The date the mistake or fraud is committed
C. The date the contract is terminated
D. The date the mistake or fraud is discovered
49. The following contracts are void, except
A. That whose object is outside the commerce of men
B. That whose object did not exist at the time of transaction
C. That which is undertaken to defraud the creditors
D. That which contemplates an impossible service
50. Contracts which cannot be sued upon unless ratified, thus it is as if they have
no effect yet are
A. Unenforceable
B. Voidable
C. Valid
D. Void
TEST 3
1. X alleged that in 1977, he verbally entered into a partnership with Z in the
distribution of LPG in Manila. For business convenience, X and Z allegedly
register the business name of their partnership, Shellite, under the name of Z as a
sole proprietorship. The partnership allegedly had Z as manager. As
compensation, Z would receive a manager's fee of 10% of the gross profit.
Allegedly, from the time that Shellite opened for business on July 8, 1977, its
business operation was profitable. Upon Z's death in the later part of 1989, his
surviving wife, Y and particularly his daughter, V, took over the operations and
management of Shell Lite without X's consent. Despite X's repeated demands
upon Y and V for accounting and winding up of the partnership, Y and V failed to
comply. Did X and Y form a partnership?
A. No. It is a sole proprietorship
B. No. It is not registered in SEC
C. Yes. Noncompliance will not affect the partnership
D. Yes. X and Y knew of the contents of their contract.
2. X Y, and Z formed XYZ partnership. Q sold his only parcel of land to XYZ
partnership. In their contract of sale, it was agreed that the payment will come
from the annual profit of XYZ partnership. Is Q a partner in XYZ partnership?
A. No
B. Yes
C. Maybe
D. None of the answers are correct
3. X Y, and Z formed XYZ partnership. One of its creditors is W. The credit is

P100,000 with a stipulation as to interest of 6% per annum. It was agreed between
XYZ partnership and W that the payment of interest will come from the annual net
profit of XYZ partnership. Is W a partner in XYZ partnership?
A. No
B. Yes
C. Maybe
4. X, Y, and Z, are brother and sisters, who are co-owners of certain lots which
were then being leased to SHELL Co. They agreed to open and operate a gas
station thereat to be known as XYZ Shell Service Station with an initial investment
of P950,000 to be taken from the advance rentals due to them from SHELL for the
occupancy of the said lots owned in common by them. A joint affidavit was
executed by them which was prepared by Atty. W. Y and Z agreed to help their
brother X by allowing him to operate and manage the gasoline service station of
the family. They negotiated with SHELL. For practical purposes and in order not
to run counter to the company's policy of appointing only one dealer, it was
agreed that X would apply for the dealership. Y helped in managing the business.
For some time, X submitted financial statements regarding the operation of the
business to Y and Z, but thereafter X failed to render subsequent accounting.
Hence, a demand was made on X to render an accounting of the profits.
Thereafter, Y and Z filed a complaint. Does a partnership exist between members
of the same family arising from their joint ownership of certain properties?
A. No. It is a sole proprietorship
B. No. It is a co ownership
C. Yes. Though they are siblings they form partnership
D. Yes. This is attested by testimonies of Y and Atty. W and X submitted to Y and Z
periodic accounting of the business.
5. H, I, and J formed HIJ partnership. Subsequently, H died survived by his

widow, W. It was agreed between I, J, and W that W will receive 5% of the annual
net income of the partnership pending liquidation. Will W become a partner?
A. No
B. Yes
C. Maybe
6. X, Y and Z formed XYZ partnership. V is the accountant of the partnership. In

the contract of employment between XYZ partnership and V, V will receive 15% of
the net profit of the partnership. Is V a partner?
A. Yes
B. Maybe
C. No
7. A partnership named ABC Co. earned a net profit of P100,000 for the first year
of operation. X is a creditor of ABC Co. in the amount of P5,000. Later, ABC Co.
paid the P5,000 to X and this amount was taken from its net profit for the year. Is
X a partner in the ABC Co.?
A. No
B. Yes
C. Maybe
8. X and Y are recipients of a gift consisting of an undivided parcel of land from Z.

Are X and Y partners?
A. Yes
B. Maybe
C. No
9. A, B and C formed the ABC partnership. A contributed P500,000, B contributed

land, and C contributed nothing. Is there a partnership?
A. No. C contributes nothing, therefore there is no partnership.
B. Yes. C might be an industrial partner
C. Yes. C might be a silent partner
D. No. There is no common fund.
10. Mr. A contributed his car in the XYZ partnership and they set up a universal
partnership. He maintains that since it is his contribution, the car is his. Is Mr. A
correct?
A. No. The car will become a property of the partnership and not on the particular
partner even though he’s the one who contributed it.
B. Yes. If the partnership is a limited partnership
C. Yes. Since it is silent, the partnership is a universal partnership of profits.
D. No.Once a partner contributed something, the thing that was contributed will be
now under the name of the partnership since the partnership is a juridical person
11. Mr. A presented himself as a partner in the BCD partnership even though he is
not. The partnership incurred losses and Mr.A was being held liable. He contends
that he is not really a partner and therefore should not be held liable. What kind of
partner is Mr. A?
A. Partner by estoppel
B. Silent partner
C. He is not a partner
D. Dormant Partner
12. Mr. A presented himself as a partner in the BCD partnership even though he is
not. The partnership incurred losses and Mr.A was being held liable. He contends
that he is not really a partner and therefore should not be held liable. Should A be
held liable for partnership liabilities?
A. Yes. It can be assumed that Mr. A is only being recognized by the partnership
because there is a loss that is incurred, and he can be liable for such loss
B. Yes. Mr. A can be held liable with the specific losses jointly or pro-rata with the
other partners that is incurred on the transactions that he represented that he is a
partner.
C. No. If ever Mr. A is a partner by estoppel, he is still not liable for partnership
liabilities, not all liabilities to be exact.
D. No. He can’t be liable for such loss because at the first place, there is no consent
from the other partners for him to be recognized as a partner
13. A capitalist-Industrial partner is one who contributes industry, labor, skill,

talent or service. A limited partner is one whose liability to third persons extends
to his separate private property.
A. Both are true
B. Both are false
C. First statement is true. Second statement is false.
D. First statement is false. Second statement is true.
14. Managing partner is one who manages actively the business of the
partnership. Ostensible partner is one who takes active part in the management
of the firm and is known to the public as a partner in the business
A. Both are true
B. Both are false
15. A partner by estoppel is not really a partner but is liable as such for the
protection of innocent third persons. Subpartner is one who does not take active
part in the management of the not known to the public as a partner
A. Both are true
B. Both are false
16. Surviving partner is the one to be taken as a member into an existing

partnership; Retiring partner is the one withdrawing from the partnership
A. Both are true
B. Both are false
17. Silent partner is the one who takes active part in the management of the
business but whose connection with the partnership is concealed or unknown to
the public. Dormant partner is both a silent and a secret partner..
A. Both are true
B. Both are false
18. Partner by estoppel one who is not really a partner, not being a party to the
partnership agreement, but is made liable as a partner for the protection of
innocent third persons. Industrial partner is one who contributes in cash (money
or property).
A. Both are true
B. Both are false
19. Which of the following is not included in the attributes of juridical capacity?
A. Juridical capacity is inherent in every natural person and therefore it is not
acquired
B. Juridical personality is lost through death
C. Juridical capacity is the fitness to the subject of legal relations
D. Juridical capacity cannot exist without capacity to act
20. A, B, C and D are partners in Y & Co., a limited partnership contributing

P10,000, P20,000, P30,000 and P40,000, respectively. A, C and D are general
partners while B is the limited partner. The partnership failed and the partners
decided to dissolve the partnership. At the time of liquidation, the unpaid
obligation amounted to P100,000 distributed as follows: To partnership creditor Y
Php 50,000 To partner A -30,000 To partner B-20,000. If the remaining cash
amounting to P20,000 was given to Y ar partial payment, which of the following is
correct?
A. Y can collect P10,000 each to A, C and D.
B. Y can collect 7,500 each from the separate properties of the partners
C. Y can collect P30,000 from A, C or D but not from B
D. B is not liable to Y because B is also a creditor of the partnership
21. A and B entered into a universal partnership of all present property. No

stipulation was made regarding future property. After the perfection of the
contract, A inherited a parcel of land and B acquired a car as remuneration for
services rendered. The properties acquired after the perfection of the contract
belong to
A. Land-A Car- B
B. Land-A Car- Partnership
C. Land-Partnership Car- B
D. Land-Partnership Car- Partnership
22. In partnership, the liability of the partners shall be joint and solidary
I. Obligations in favor of partnership supplies by virtue of sales contract.
II Obligation in favor of a partnership client for return of deposit misappropriated
by one of the partners.
III. Obligations in favor of a pedestrian hit by the delivery van driven by one of the
partners in the course of partnership business
A. I and II
B. I and III
C. II and III
D. I, II and III
23. A,B and C are partners who contributed P30,000, P15,000 and industry ,
respectively. After payment of all liabilities and expenses only P18,000 remain as
partnership assets, A will get
A. P12,000
B. P9,000
C. P6,000
D. P5,000
24. A,B and C are partners who contributed P30,000, P15,000 and industry ,
respectively. After payment of all liabilities and expenses only P60,000 remain as
partnership assets, B will get
A. P15,000
B. P18,750
C. P20,000
D. P22,500
25. A, B and C are general partners in a merchandising firm. They contributed

amounts to the capital and also agreed on equal distribution of whatever net
profit is realized per fiscal period. After 3 years of operation, however, C conveys
her whole interest in the partnership to D, without the knowledge and consent of
A and B. Which of the following is not correct?
A. The partnership is dissolved
B. D cannot interfere or participate in the management or administration of the
partnership business or affairs
C. D shall receive the net profits to which C would have otherwise been entitled
D. The conveyance by C of his whole interest in the partnership did not make D a
partner
26. Q A: Can a husband and wife form a limited partnership in real estate
business with the wife being a limited partner? Q B: Can two corporations
organize a general partnership?
A. Yes only to question A
B. Yes only to Question B
C. Yes to both questions
D. No to both questions
27. A, B, C and D organized a general partnership with A and B as industrial

partners and C and D as capitalist partners. C contributed P 200,000 and D
contributed P100,000 to the common fund. By a unanimous vote of the partners,
A and B were appointed as managing partners without any specification of their
respective power and duties. Later, W applied for the position of secretary and Y
applied for the position of accountant of the partnership. The hiring of W was
decided upon by A and B but was opposed by C and D. The hiring of Y was
decided by A and D but was opposed by B and C. Who can be hired by the
partnership?
A. W
B. Y
C. Both W and Y
D. Neither W nor Y
28. The following are the effects of unlawful partnership, except

A. The contract is void ab initio and the partnership never existed in the eyes of the
law
B. The contributions of the partners shall be confiscated in favor of the government
C. The profits shall be confiscated in favor of the government
D. The instruments, or tools and proceeds of the crime shall be forfeited in favor of
the government
29. A person cannot be admitted into the partnership without the consent of
A. Majority of the partners
B. two-third of the partners
C. Partners representing the controlling interest
D. All the partners
30. On April 1, 2019, A and B entered into a contract of partnership for the
purpose of buying and selling textbooks, with the former as capitalist partner and
the latter as industrial partner. It was agreed that A shall contributed P100,000 to
the common fund on May 2, 2019. Upon the arrival of the designated date, A failed
to deliver the contribution he promised. As a result
A. B should make a demand upon A for the delivery of his contribution to render A
in default
B. B can compel A to deliver his contribution with interest and damages without the
necessity of demand
C. The contract of partnership becomes void because A failed to give his
contribution to the common fund
D. The contract of partnership was never perfected because there was no delivery
of contributions by the partners
31. When a real property is contributed to the partnership

A. A real contract is perfected
B. A written instrument is required
C. A partner can make important alteration if beneficial to the partnership
D. A public instrument complete with inventory is required
32. A, B, C and D are general partners contributing P20,000, P30,000, P50,000 and
industry, respectively. At the time of liquidation, the partnership is indebted to Y
for P50,000, to partner A for P 30,000 and to partner B for P 20,000. If the asset of
the partnership amount only to P20,000, which of the following is correct?
A. Y can collect P20,000 from the partnership and from partners A, B, and C at
P10,000 each
B. Y can collect P20,000 from the partnership and P30,000 from either partners A or
B or C or D
C. If Y succeeds in collecting the P30,000 from the separate properties of the
partners concerned, partners A, B and C will be required to make additional
contribution
D. After exhausting the assets of the partnership amounting to P 20,000, Y can
collect from partners A, B, C and D at P7,500 each
33. In case a managing partner collects a demandable debt from his debtor who
also owes the partnership a demandable debt, which of the following is not
correct if payment is not enough to cover the two debts?
A. The sum collected shall be applied to the partnership credit
B. It shall be applied to the two credits in proportion to their amounts
C. The debtor has the right to have the payment applied to his debt to the partner if
it should be onerous to him
D. The partner cannot apply the payment to his own credit
34. A,B and C are partners in a joint venture engaged in real estate and land
development. A without the knowledge of B and C offered to sell to D all the
remaining unsold lots at a price very much higher than the prevailing market
prices. Later, A bought out B and C from the partnership and thereafter finally
sold all the lots at very big profits. Statement A: When A bought out B and C from
the partnership, the partnership was dissolved so B and C have no more share in
the profit of the sale. Statement B: The sale of the lots between A and D is void
because it was without the knowledge and consent of B and C
A. True, True
B. True, False
C. False, True
D. False, False
35. A, B, C and D are partners contributing P20,000, P30,000, P50,000 and

industry, respectively. The partnership failed and the partners decided to dissolve
the partnership. At the time of liquidation, the unpaid obligation amounted to
P100,000 distributed as follows: To partnership creditor Y Php 50,000 To partner
A -30,000 To partner B-20,000. If the remaining cash amounting to P10,000 was
given to Y ar partial payment, which of the following is correct?
A. A as industrial partner, D is not liable to Y
B. A, B and C are liable to Y in proportion to their capital contribution
C. A, B and C are liable to Y at P13,333 each
D. Y can collect P10,000 from the separate property of D
36. A, B, C and D are partners contributing P20,000, P30,000, P50,000 and

industry, respectively. The partnership failed and the partners decided to dissolve
the partnership. At the time of liquidation, the unpaid obligation amounted to
P100,000 distributed as follows: To partnership creditor Y Php 50,000 To partner
A -30,000 To partner B-20,000. If Y succeeds in collecting the deficiency from the
partners concerned, which of the following is not correct?
A. D is entitled to get reimbursement from A, B and C
B. Only C will be able to the other partners
C. A and B will not make additional contribution
D. C will pay P35,000 to his partners
37. A and B are co-owners of a parcel of land from where they share the profits
equally as co-heirs in their inheritance. Is there a partnership?
A. There is a prima facie presumption of partnership because of the equal sharing
of profits
B. There is no partnership because co-ownership by itself does not establish a
partnership despite the sharing of profits
C. There is no partnership since in partnership, division of profits is not always
necessary among partners
D. There is a prima facie presumption of partnership by being co-owners and co-
possessors
38. A and B are partners in AB partnership. While A was performing his duties as
a partner in the course of business, he negligently caused damage to X, a third
person. Who shall be liable to X and up to what extent?
A. Both A and B shall be liable solidarily to X
B. Only A shall be liable for he is only one at fault
C. A, B and Partnership are all liable solidarily to X
D. Only the partnership shall be liable it being a juridical person separate and
distinct form the partners
39. Mara, Jennifer and Grace formed a general partnership with a capital of
P100,000 and the partners contributing 50%, 30% and 20%, respectively. Orange
claim of P160,000 against the partnership. If Orange files a suit to collect her
claim, which of the following is not correct?
A. All the partners are liable to the extent of their separate property
B. The personal liability if the partners is merely joint and not solidary
C. All the partners shall be liable pro rata with all their property only after the
partnership assets have been exhausted
D. After exhausting the assets of the partnership, Mara, Jennifer and Grace shall be
liable 50%, 30% and 20% respectively to Orange for the unpaid claim
40. Pepe, Pipi and Popo are partners in an import and export business.
Customers desiring to place an order form imported articles are always required
to make a deposit of 25% of the total cost of the order. Pupu, a regular customer,
deposited $2,000 to Pepe for his order. Pepe instead of turning over the said
amount to partnership, misappropriated it. As a result, one is not correct?
A. Pupu may institute a claim against the partnership and all the partners
B. All the partners shall be liable solidarily with the partnership for everything
chargeable to the partnership
C. The personal liability if the partners is merely joint and not solidary
D. The partnership is bound to make good of the loss where one partner acting
within the scope of his apparent authority
41. A, B, C and D are partners in Y & Co., a limited partnership with A as general
partners while B is the limited partner and C as an industrial partner. The
partnership failed and the partners decided to dissolve the partnership. At the
time of liquidation,after disposing all its assets to pay its partnership debts, there
still remains a note payable in the sum of P15,000. Against whom can the creditor
demand payment of the note of P15,000
A. A, B and C are liable to pay P5,000 each
B. A and C are liable to pay P7,500 each
C. A and B are liable to pay P7,500 each
D. Only A is liable to pay the P15,000 indebtedness
42. A and B are partners. On January 2, 2020, C was admitted as a new partner. At
the time of C's Admission, the partnership creditors were M for P50,000 and N for
P30,000. After January 2, 2020, the partnership borrowed from O-P20,000 and
P40,000 from P. On May 15, 2020, the partnership became insolvent leaving and
obligation amounting to P140,000 and partnership assets amounting to P30,000.
The creditors are going after the separate properties of the partners to satisfy
their remaining claims. How are creditors' claims satisfied? Statement A: M and N
can go after the separate properties of A and B but C's separate properties are
not answerable to their claims. Statement B: O and P can go to the separate
properties of A,B and C
A. True, True
B. True, False
C. False, True
D. False, False
43. A, B, C and D are partners in AB & Co., contributing P20,000, P30,000 and
P50,000 and industry, respectively. Due to financial reverses, they decided to
dissolve the partnership. At the time of dissolution only P10,000 is left but the
obligation to creditor Y Php 50,000 To partner B -30,000 To partner C-20,000
remain unpaid. Which of the following is correct if there is no profit and loss
sharing agreement?
A. Y can collect P12,500 each from partners A, B, C and D
B. The partnership A,B,C and D will pay Y P10,000 each
C. D is exempt from loss, hence only A, B, C and D will bear the P90,000 loss in
proportion to their capital contribution
D. Only partner A will make additional contribution because partners B and C can
claim legal compensation
44. A, B and C are partners in AB & Co. LTD. Where C is the limited partner,
contributing A-P40,000, B-P60,000 and C-services. After exhausting the
partnership assets, the partnership still owes creditor Y -P30,000. Which of the
following is correct, if there is no profit or loss sharing agreement?
A. Y can collect P10,000 each to A, B and C.
B. Y can collect P15,000 each to A and B.
C. Y can collect P30,000 from either A or B.
D. Y can collect P12,000 from A and P18,000 from B.
45. A, B, C and D are partners in Y & Co., a limited partnership contributing
P10,000, P20,000, P30,000 and P40,000, respectively. A, B and D are general
partners while C is the limited partner. The partnership failed and the partners
decided to dissolve the partnership. At the time of liquidation, the unpaid
obligation amounted to P100,000 distributed as follows: To partnership creditor Y
Php 50,000 To partner B -30,000 To partner C-20,000. If the remaining assets
amounting to P30,000 remains, which of the following is correct if there is no
profit and loss sharing agreement?
A. Y collects P30,000 from the partnership and the balance of P20,000 will be
collected from A, B and D in equal share
B. The P20,000 obligation if the partnership to C can be used to offset C's capital
deficiency
C. Y collects P30,000 from the partnership and P5,000 will be collected from A, B,C
and D
D. C is exempt from loss, hence he can recover P20,000 obligation of the
partnership to him from either A, B or D
46. When a partner has been appointed manager in the articles of partnership,
which of the following is not correct?
A. If with just or lawful cause, his appointment can be revoked by the majority vote
of the partners
B. He may execute all acts of administration despite the opposition of his partners
unless he acts in bad faith
C. His power is irrevocable without just or lawful cause
D. If without just or lawful cause, his appointment can be revoked only with the
consent of all the partners including the managing partner
47. A, B, C and D are partners in AB & Co. A parcel of land in the name of the
partnership was sold by A in the name of AB & Co. but without the express
authority to Y, which of the following is correct?
A. AB & Co. may recover the land from Y because the sale made by A to Y is
unenforceable
B. AB & Co. may recover the land if it is not engaged in selling of land
C. If Y donated the land to W, AB & Co. can no longer recover such land
D. Title to the property passes to Y even if AB & Co. is not engaged in buying and
selling of land if Y acted in good faith
48. A partnership records a partner’s investment of assets in the business at

A. The market value of the assets invested.
B. Any value, depending upon the partnership agreement.
C. A special value set by the partners.
D. The partner’s book value of the assets invested.
49. When property other than cash is invested in a partnership, at what amount
should the noncash property be credited to the contributing partner’s capital
account?
A. Contributing partner’s original cost.
B. Assessed valuation for property tax purposes.
C. Fair value at the date of contribution.
D. Contributing partner’s tax basis.
50. A partnership formed for the exercise of a profession which is duly registered
is an example of
A. Universal partnership of all present property
B. Universal partnership of profits
C. Partnership by estoppel
D. Particular Partnership
TEST 4
1. X Corp operates a call center that received order for pizza on behalf of Y Corp.
which operates a chain of pizza restaurants. The two companies have the same
set of corporate officers. After two years, X Corp dismissed its call center agents
for no apparent reason. The agents file a collective suit for illegal dismissal
against both X and Y Corp based on the doctrine of piercing the veil of corporate
fiction. The latter set up the defense that the agents are employees of X Corp,
which is a separate juridical entity. Is the defense appropriate?
A. Yes, it is not shown that one company completely dominated the finances,
policies and business practices of the other
B. No, since the doctrine would apply, the two companies having the same set of
corporate officers
C. No, the real employer is Y Corp, the pizza company with X Corp, serving as an
arm for receiving its outside orders for pizza
D. No, the real employer is Y Corp, the pizza company with X Corp, serving as an
arm for receiving its outside orders for pizza
2. The articles of incorporation of ABC Corporation provides for 7 directors. In the

monthly meeting of the board of directors held on April 8, 2019, Directors B, C, D
and E where present and the following resolutions were approved: A. A
resolution for the purchase of a delivery truck form E Trading, a sole
proprietorship owned by E. B, C, D and E voted for the resolution. B. A resolution
appointing T as the new corporate secretary where B, C, D and E voted for the
resolution. Which is correct?
A. Resolution A needs stockholders approval. Resolution B is valid.
B. Both resolutions are valid and do not need stockholders approval
C. Both resolutions are valid but need stockholders approval
D. Resolution A is valid. Resolution B needs stockholders approval.
3. This vacancy in the board of directors may be filled by the board of directors if
the remaining directors still contribute to the quorum
A. Removal of a director
B. Increase in the number of director
C. Death of a director
D. Expiration of the term of a director
4. Any director of a corporation may be removed from office by a vote of

A. 2/3 of the outstanding capital stock entitled to vote
B. Majority of the outstanding capital stock entitled to vote
C. Majority of stockholders present
D. 2/3 of the stockholders present
5. As regards to cash dividend, which of the following is correct?

A. Declared by the board by majority vote and need not be ratified by the
stockholders
B. Declared by the board by majority vote and need not be ratified by the
stockholders
C. Declared by the board by majority vote and ratified by the stockholders by 2/3
vote of the outstanding capital stock
D. Declared by the board by 2/3 vote and ratified by the stockholders
6. As regards the corporate by-laws, which of the following is true?

A. To revoke the power delegated to the board to adopt, amend or repeal new by-
laws-2/3 vote of the outstanding capital stock
B. To adopt, amend or repeal-majority vote of the outstanding capital stock
C. To adopt, amend or repeal-2/3 vote of the outstanding capital stock is needed
D. To delegate to the board of directors the power to adopt, amend or repeal new
by-laws, majority vote of the outstanding capital stock
7. A subscribed to 1,000 voting shares of stock of X Corp, she paid 25% of the
said subscription. During the stockholder meeting, can A vote all her subscribed
shares?
A. Yes, because unpaid shares not delinquent can be voted
B. No because the subscription has not been fully paid
C. No, because A shares have become delinquent which cannot be voted
D. Yes, as to the paid percentage of subscription
8. In the matter of management of the corporation, this is supreme:

A. Board of Directors
B. President
C. Chairman of the board of directors
D. Stockholders
9. Mukasa Kho, Farrah Smith, John Hitmore, Nick Collins and Sue Perry formed
AFAM Corp and submitted their articles of incorporation to the SEC.
Inadvertently, through an oversight, the SEC approved the articles and issued a
certificate of incorporation, Thereafter, it was discovered that they have not
completed their required period of residency in the Philippines. As a result, which
of the following is not correct?
A. The corporation shall be considered as a de facto corporation and shall be
allowed to function as a corporation under the law
B. The right to exercise corporate powers, shall not be inquired into collateral in any
private suit to which the corporation maybe a party
C. The right to exercise corporate powers, shall not be inquired into collateral in any
private suit to which the corporation maybe a party
D. If there is a suit filed against the corporation for breach of contract, she can
alleged that the corporation has no legal personality and therefore all
incorporators shall be held personally liable for damages.
10. Statement 1: A director is removed from the office by a vote of a stockholders

holding or representing at least 2/3 of outstanding capital stock. The vacancy
occasioned by such removal can be filled by the vote of at least a majority of the
remaining directors if still constituting a quorum.
Statement 2: Treasury shares sold for less than par or issued value are
considered watered stock and as such are prohibited by law.
A. True, True
B. True, False
C. False, True
D. False, False
11. One of the following is a ground for the suspension or revocation of the
certificate of incorporation by SEC
A. If the corporation has commenced its business transactions and afterwards
ceased operations continuously for a period of at least 5 years
B. If the corporation fails to commence and start to operate and the failure to
operate is due to causes beyond its control
C. If the incorporation does not formally commence its business operation or
transactions within two years from the date of incorporation
D. If the corporation has commenced its operations and subsequently become
continuously inoperative for two years.
12. Which of the following does not bring about corporate dissolution?
A. Failure to formally commence within 2 years from issuance of certificate of
incorporation
B. By legislative dissolution
C. By insolvency of the incorporators
D. By expiration of corporate term
13. May not require stockholders approval

A. Declaration of stock dividend
B. Amendment of by laws
C. Management contract
D. Removal of directors
14. Which of the following statement is not correct?

A. A stockholder is entitled to cash such number of votes as the number of shares
outstanding entitled to vote in his name times the total number of directors to be
elected
B. A stockholder may accumulate his vote for one candidate or may distribute them
among as many candidates but he cannot cast more than the outstanding shares
in his name times the number of directors to be elected
C. Members of the board of director are voted by stockholders by means of
cumulative voting
D. Outstanding shares although with voting rights but have not been fully paid
cannot be voted
15. In case the member of the board of directors of a corporation still constitute a
quorum, and there are vacancies, who will fill up such vacancies?
A. Stockholders-Removal, Expiration of Terms, Increase in the number of directors
Board-Resignation
B. Stockholders-Removal, Expiration of Terms Board-Resignation, Increase in the
number of directors
C. Stockholders-Removal Resignation Board- Expiration of Terms, Increase in the
number of directors
D. Stockholders-Removal Resignation Board, , Increase in the number of directors
Board- Expiration of Terms
16. Statement 1: Unless the by laws provides, the chairman of the board presides
the meeting of the board
Statement 2: Unless the by laws provides, the president presides the meeting of
the stockholders.
A. True, True
B. True, False
C. False, True
D. False, False
17. Will require stockholders 2/3 approval

A. Granting authority to the board to amend the by laws
B. Amendment of by laws
C. Election of corporate officers
D. Election of the members of the board
18. The following statements pertain to a voting trustee, except

A. It is good only for the meeting for which it is intended
B. The representative acquires legal title to the shares
C. It is generally irrevocable and the representative may vote even in the presence
of the stockholder
D. The agreement giving the representative the power to vote must be duly
notarized and a copy thereof must be submitted to SEC to be effective and
enforceable
19. When by law adopted and filed prior to incorporation, which of the following is
correct?
A. Approved by the stockholders representing at least 2/3 of the outstanding capital
stock
B. Approved by the stockholders representing at least a majority of the outstanding
capital stock
C. Approved and signed by all the incorporators
D. Approved and signed by at least 2/3 of the incorporators
20. When by law adopted and filed after the incorporation, which of the following
is correct?
A. Approved and signed by all the incorporators
B. Approved by the stockholders representing at least 2/3 of the outstanding capital
stock
C. Approved and signed by at least 2/3 of the incorporators
D. Approved by the stockholders representing at least a majority of the outstanding
capital stock
21. If par value shares are now treasury shares, the following rules are applicable,
except one
A. They shall have no voting right as long as they remain in the treasury
B. They are not part of subscribed stock and not considered as outstanding shares
C. They are not entitled to dividends
D. They may be again disposed of for a reasonable price even below par
22. Assumed that the unpaid subscription of S for 10 shares with a par value of
P100 each is P400 and the expenses, interest and cost of sales amount to P50.
Who is the highest bidder if the bids are as follows:
A. P400 for 5 shares
B. P450 for 6 shares
C. P450 for 7 shares
D. P400 for 4 shares
23. The member of the board of directors may be given compensation by any of
the following acts, except
A. If approved by the vote of the stockholders representing majority of the
outstanding capital stock
B. If provided in the by laws
C. If approved by the board of directors if the salary given is not more than ten
percent of the net income before income tax during the preceding year
D. If approved by the board of directors giving them a reasonable per diem
24. The ratification of director’s or trustee’s contract with the corporation requires
the vote of
A. 2/3 of outstanding capital stock of voting and nonvoting shares or 2/3 of the
members entitled to vote
B. 2/3 of outstanding capital stock of voting shares or 2/3 of the members entitled to
vote
C. Majority of outstanding capital stock of voting shares or majority of the members
entitled to vote
D. Majority of outstanding capital stock of voting and non voting shares or majority
of the members entitled to vote
25. Subscription as distinguished from purchase of stock

A. Governed by the statute of fraud if the price is at least P500.00
B. May be made before or after the incorporation
C. Can vote only on the shares he has paid
D. Does not become a shareholder until he has paid the purchase price
26. The by laws as distinguished from the article of incorporation

A. The amendment may no longer require ratification if delegated by the
stockholders to the board of directors
B. Submitted to the SEC before the issuance of certificate of incorporation
C. A condition precedent in the acquisition by a corporation of a juridical personality
D. Majority of the outstanding stock of voting shares id required for its ratification
27. Dividends on shares of stocks can only be declared out of unrestricted

retained earnings of the corporation.
Statement 1: True, dividend whether cash or stock can be validly declared only
out of unrestricted retained earnings
Statement 2: False, during the receivership, the asset and properties of the
corporation are being gathered for conversion into cash in preparation for
distribution to creditors.
A. True, True
B. True, False
C. False, True
D. False, False
28. At the annual meeting if stockholders, a resolution was approved empowering

the president of the corporation to enter into a contract with a New York firm. Can
the president validly act by virtue if such resolution.
Statement 1: Yes, the action of the stockholders was approved during the
stockholders meeting
Statement 2: No, the power to contract for and in behalf of the corporation
resides primarily in the board of directors
A. True, True
B. True, False
C. False, True
D. False, False
29. If there are 9 member of the board and the by laws provide the creation of an
executive committee, the minimum number of its members is
A. 3
B. 4
C. 5
D. 7
30. The executive committee shall act by

A. 2/3 vote
B. ¾ vote
C. majority vote
D. unanimous vote
31. These powers cannot be exercise by the executive committee, except
A. enter into contract for the supply of goods needed by the corporation
B. To fill up the vacancy of the board
C. To distribute cash dividend
D. To increase the minimum number of shares needed before a shareholder may
qualify to be a member of the board
32. In a meeting to elect the officers only 9 out of 11 members of the board
attended. How many votes will be needed to elect the president of the corp?
A. 4
B. 5
C. 6
D. 9
33. Shares of stock cannot be issued if the consideration received is (are)

A. money
B. Property
C. promissory notes
D. previous services rendered
34. He must be resident citizen

A. secretary
B. president
C. treasurer
D. chairman of the board
35. He must be a member of the board

A. secretary
B. treasurer
C. Incorporator
D. president
36. He cannot be the secretary of the corporation

A. president
B. chairman of the board
C. treasurer
D. incorporator
37. He must be a natural person

A. subscriber
B. incorporator
C. stockholder
D. highest bidder
38. Should not be more than 15

A. incorporator
B. stockholder
C. subscriber
D. highest bidder
39. Corporate acts performed outside of its express, incidental or implied powers
A. illegal acts
B. intra vires acts
C. legal acts
D. ultra vires acts
40. Statement 1: Treasury shares shall have no voting rights as long as such
stocks remain in treasury
Statement 2: Shares of stock shall not be issued in exchange for future services
A. True, True
B. True, False
C. False, True
D. False, False
41. Regular meetings of stockholders or members shall be held

A. weekly
B. monthly
C. Quarterly
D. annually
42. Unless the by-laws provide otherwise regular meeting of the board of
directors or trustees shall be held
A. weekly
B. Monthly
C. quarterly
D. annually
43. The articles of incorporation if ABC Transport Co. a public utility, provides for
10 members in its board of directors. What is the prescribed minimum number of
Filipino Citizens in its board?
A. 5
B. 6
C. 7
D. 10
44. It is settled that neither par value nor book value is an accurate indicator of
the fair value of a share of stock of a corporation. As to unpaid subscription to its
shares of stock, as they are regarded as corporate assets, they should be
included in the
A. Book Value
B. Capital Value
C. Par Value
D. Market Value
45. In the elections for the Board of Trustees of non-stock corporations, members
may cast as many votes are there are trustees to be elected but may not cast
more than one vote for one candidate. This is true
A. Unless set aside by the members in plenary session
B. In every case even if the board of trustees resolves otherwise
C. In every case even if the majority if the members decide otherwise during the
election.
D. Unless otherwise provided in the articles of incorporation or in the by laws
46. The rule is that the valuation if the shares if a stockholder who exercises his
appraisal rights is determined as of the day prior to the date on which the vote
was taken. This is true
A. Regardless of any appreciation in the share’s fair value
B. Regardless of any depreciation in the share’s fair value
C. Regardless of any depreciation or appreciation in the share’s fair value
D. Only if there is no depreciation or appreciation in the share’s fair value
47. EFG Foundation Inc. a non profit organization, schedules an election for its 6
member board of trustees. X, Y and Z, who are minority members of the
foundation, wish to exercise cumulative voting in order to protect their interest,
although the foundation’s articles and by laws are silent on the matter. As to each
of the three, what is the maximum number of votes that he can cast
A. 3
B. 6
C. 9
D. 12
48. The board of directors of XYZ Corp unanimously passed a resolution

approving the taking steps that in reality amounted to willful tax evasion. On
discovering this, the government files tax evasion charges against all the
company’s members of the board of directors. The directors invoked the defense
that they have no personal liability, being mere directors of a fictional being. Are
they correct?
A. No, since are a rule only natural persons like the members of the board of
directors can commit corporate crimes
B. Yes, since it is the corporation that did not pay the tax and it has a personality
distinct form its directors
C. Yes, since the directors officially and collectively performed acts that are
imputable only to the corporation
D. No, since the law makes directors of the corporation solidary liable for gross
negligence and bad faith in the discharge of their duties.
49. T Corp has a corporate term of 20 years under its articles of incorporation or
from June 1, 2010 to June 1, 2030. On June 1, 2021 it amended its Articles of
Incorporation to extend its life by 15 years from June 1, 2010 to June 1, 2045. The
SEC approved this amendment. On June 1, 2041, however, T Corp decided to
shorten its term by 1 year or until June 1. 2044. Both the 2021 and the 2041
amendments were approved by the majority vote of its board of directors and
ratified in a special meeting by its stockholders representing at least 2/3 or its
outstanding capital stock. The SEC however, disapproved the 2041 amendment
on the ground that it cannot be made earlier than 5 years prior to the expiration
date of the corporate term, which is June 1, 2044. Is the SEC disapproval correct?
A. No, since the 5 year rule on amendment of corporate term applies only to
extension, not shortening of term
B. Yes, any amendment affecting corporate term cannot be made earlier than 5
years prior to the corporation’s expiration date
C. No, since a corporation can in fact have a corporate life of 50 years
D. Yes, the amendment to shorten corporate term cannot be made earlier than 5
years prior to the corporation’s expiration date
50. Several American doctors wanted to set up a group clinic in the Philippines so
they could render modern medical services. If the clinic is to be incorporated
under our laws, what is the required foreign equity participation in such a
corporation
A. 0
B. 0.4
C. 0.6
D. 0.7
TEST 5
1. I No merger or consolidation shall be valid unless approved by a 3/4 vote of all

the members with voting rights, present and constituting a quorum of each of the
constituent cooperatives at separate general assembly meetings. II. The merger
or consolidation shall be effective upon the issuance of the certificate of merger
or consolidation by the CDA.
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
2. A cooperative which combines 2 or more of the business activities of these
different types of cooperatives.
A. Advocacy cooperative
B. Single line cooperative
C. Multipurpose cooperative
D. Agrarian Reform cooperative
3. A cooperative organized for the primary purpose of providing medical, dental

and other health services.
A. Financial service cooperative
B. Fishermen cooperative
C. Electric cooperative
D. Health service cooperative
4. A cooperative organized for the primary purpose of engaging in savings and

credit services and other financial services.
B. Health service cooperative
C. Single line cooperative
D. Electric cooperative
5. A cooperative organized for the primary purposed of undertaking power

generations, utilizing renewable energy Sources, including hybrid systems,
acquisition and operation of Subtransmission or distribution to its househOld
members.
B. Electric cooperative
C. Health service cooperative
D. Single line cooperative
6. A cooperative organized by marginalized fishermen in localities whose

products are marketed either as fresh or processed products
A. Electric cooperative
B. Financial service cooperative
C. Fishermen cooperative
D. Single line cooperative
7. A cooperative organized by marginal farmers majority of which are agrarian

reform beneficiaries.
A. Agrarian Reform cooperative
C. Electric cooperative
D. Financial service cooperative
8. A primary cooperative which promotes and advocates cooperativism among its

members and the public through socially-oriented projects, education and
training, research and communication, and other similar activities to reach out to
its intended beneficiaries,
A. Agrarian Reform cooperative
B. Advocacy cooperative
D. Electric cooperative
9. A cooperative organized for the primary purpose of providing a wide range of

financial services to cooperatives and their members,
B. Cooperative Bank
D. Credit Cooperative
10. A cooperative whose members are engaged in the production of fresh milk
which may be processed and/or marketed as dairy products,
A. Dairy cooperative
D. Agrarian Reform cooperative
11. A cooperative organized for the primary purpose of owning and operating
licensed educational institutions.
A. Multipurpose cooperative
B. Multipurpose cooperative
C. Education Cooperative
D. Workers Cooperative
12. It refers to a cooperative the members or which are registered cooperatives

and/or federations organized purposely to represent the interest and welfare of all
types of cooperatives at the provincial, city, regional, and national levels
A. Cooperative union
B. Federation of cooperatives
C. Cooperative branch
D. Cooperative satellite
13. It refers to a cooperative the members of which are primary cooperatives
doing the same line of business.
A. Federation of cooperatives
B. Cooperative union
C. Cooperative branch
D. Cooperative satellite
14. It refers to a union of two or more existing cooperatives belonging to the

same category whereby the surviving cooperative, retaining its identity, absorbs
one or more constituent cooperative so
A. Merger
B. Consolidation
C. Combination
D. Acquisition
15. It refers to cooperative which are parties to the merger/ consolidation

A. None of the above
B. Consolidated cooperatives
C. Surviving cooperatives
D. Constituent cooperatives
16. It refers to the new cooperative created after the termination of the old
cooperative in case of consolidation.
A. Consolidated cooperatives
B. Constituent cooperatives
C. None of the above
D. Surviving cooperatives
17. A cooperative that promotes and undertakes savings and lending services
among its members.
A. Cooperative Bank
B. Financial service cooperative
C. Credit Cooperative
D. Multipurpose cooperative
18. A cooperative organized to assist or provide access In liil benefit of its regular
members who actively participate in the saving program for housing.
A. Housing Cooperative
B. Transport cooperative
C. Insurance cooperative
19. A cooperative engaged in the business of insuring life and poverty of

cooperatives and their members.
A. Insurance cooperative
B. Credit Cooperative
D. Financial service cooperative
20. A cooperative which includes land and sea transportation, limited to small
vessels.
A. Transport cooperative
B. Housing Cooperative
21. A cooperative organized to own, operate and manage water systems for the
provision and distribution of potable water for its members and their households.
A. Water Service Cooperative
B. Agrarian Reform cooperative
22. A cooperative where the primary purpose of which is to procure and distribute
commodities to members and non-members.
A. Marketing cooperative
B. Producers cooperative
C. Credit Cooperative
D. Consumers cooperative
23. A cooperative that undertakes joint production whether agricultural or

industrial.
A. Consumers cooperative
B. Marketing cooperative
C. Producers cooperative
24. A cooperative organized to render public services as authorized under a

franchise or certificate of public convenience and necessity duly issued by the
appropriate government agency
A. Public Service cooperative
C. Consumers cooperative
D. Workers Cooperative
25. A cooperative which engages in the supply of production inputs to members

and markets their products.
A. Marketing cooperative
C. Consumers cooperative
26. A cooperative which engages in medical and dental care, hospitalization,

transportation, insurance, housing, labor, electric light and power,
communication, professional and other services
A. Service Cooperative
B. Multipurpose cooperative
C. Producers cooperative
D. Consumers cooperative
27. It refers to a duly registered cooperative to which a Laboratory Cooperative is

affiliated with
A. Laboratory cooperatives
B. Principal cooperative
C. Subsidiary cooperative
D. Guardian cooperative
28. A laboratory cooperative shall be organized for any or all of the following
purposes
A. To serve as a training ground for its members to prepare them for membership in
regular cooperatives
B. To teach the values of thrift and saving mobilization among its members.
C. To instill Cooperative values, principles, financial discipline, business skills and
leadership skills among its members
29. I. A Guardian Cooperative may supervise more than 1 laboratory cooperative.

II. The dissolution of the guardian cooperative shall result in the revocation of the
certificate of recognition of the Laboratory Cooperative. .
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
30. I. The death or insanity of a member in a primary cooperative may be

considered valid grounds for termination of membership. II. The insolvency or
dissolution of a member in a secondary or tertiary cooperative may be
considered valid grounds for termination of membership
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
31. Membership in the cooperative may be terminated by a vote of the majority of

all the members of the board of directors for any of the following causes, except:
A. When a member has not patronized any of the services of the cooperative for an
unreasonable period of time as may be previously determined by the board of
directors;
B. When a member has continuously failed to comply with his obligations;
C. When a member has acted in violation of the articles of incorporation
D. For any act or omission injurious or prejudicial to the interest or the welfare of the
cooperative
32. A cooperative may have 2 kinds of members, to wit:

A. Regular members
B. Associate members
C. All of the choices
D. None of the choices
33. It is one who has complied with all the membership requirements and entitled
to all the rights and privileges of membership.
A. Regular members
B. Associate members
34. It is one who has no right to vote nor be-voted upon and shall be entitled only
to such rights and privileges as the bylaws may provide
A. Associate members
B. Regular members
35. I. A cooperative organized by minors shall be considered a laboratory

cooperative and must be affiliated with a registered cooperative II. An associate
who meets the minimum requirements of regular membership, continues to
patronize the cooperative for 3 years, and signifies his/her intention to remain a
member shall be considered a regular member
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
36. I. The general assembly may by a three-fourths (3/4) vote of all its members
with voting rights, present and constituting a quorum, delegate some of its
powers to a smaller body of the cooperative. II. A regular meeting of the board of
directors shall be held annually by the general assembly on a date fixed in the
bylaws, or if not so fixed, on any date within ninety (90) days after the close of
each fiscal year.
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
37. I. A quorum shall consist of at least 25% of all the members entitled to vote. II.
The quorum requirement for general assembly meetings in case of cooperative
banks, whether special or regular, shall be one half plus one of the number of
voting shares of all the members in good standing.
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
38. It refers to the termination of the juridical personality of the cooperative

through appropriate judicial proceedings, or by an order of the COA, or through
its own initiative.
A. Dissolution
B. Liquidation
C. Termination
D. Delisting
39. I. The dissolution of a cooperative may either be voluntary or involuntary II.
Dissolution is voluntary if it is initiated through the voluntary decision of the
members of cooperatives
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
40. I. Dissolution is voluntary if it is ordered by the CDA or a competent court

having jurisdiction over the cooperatives on grounds as specified by law and
after due process. . II. The dissolution of a cooperative, whether voluntary or
involuntary terminates the right of the cooperative to continue the business or
purposes for which it was established and is bound to wind up its affairs within
the period as specified by law
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
41. I. Liquidation refers to the various activities undertaken by a dissolved

cooperative, through its duly constituted Both of Liquidators. II. The dissolved
cooperative shall continue to exist for 3 years from the issuance of the Order of
Dissolution.
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
42. It shall refer to the act of striking out or deleting the registered cooperative
name from the Registry of Existing Cooperatives after its certificate of
Registration has been ordered canceled.
A. Dissolution
B. Liquidation
C. Termination
D. Delisting
43. I. No member of a primary cooperative other than the cooperative itself shall
own or hold more than 5% or the share of the cooperative . II. Where a member of
a cooperative dies, his heir shall be entitled to the shares of the decedent.
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
44. The financial audit shall be conducted by an external auditor who satisfies all
the following qualifications: I. He is independent of the cooperative or any of its
subsidiary that he is auditing. II. He is a member in good standing of the PICPA
and is accredited by both the Board of Accountancy and the CDA.
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
45. I. Cooperatives registered under the Philippine Cooperative Code shall be

subject to an annual financial, performance and social audit. II. The social audit
shall be conducted by an independent social auditor accredited by the CDA.
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
46. An independent CPA accredited by the CDA, whose relationship to the client
is to express an opinion on the financial statements.
A. Cooperative Internal Auditor
B. Cooperative External Auditor
C. Cooperative Inspector
D. Cooperative Examiner
47. In a Cooperative Banks: I. The quorum requirement for general assembly

meetings, whether special or regular, shall be one half plus one of the number of
voting shares of all the members in good standing. II. The quorum requirement
for board of director meetings, whether special or regular, shall be one half plus
one of the number of all the members of the Board of Directors.
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
48. In a Cooperative Banks: I. The quorum requirement for amendments of

articles of cooperation and bylaws, shall be one half plus one of the number of
voting shares of all the members in good standing. II. Cooperative banks shall be
under the supervision of the BSP
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
49. In a Cooperative Banks: I. Membership shall be either regular or associate II. It

shall be allowed to foreclose lands mortgaged to it subject to the provisions of
RA 8791.
A. Both are true
B. Both are false
C. Only I is true
D. Only II is true
50. The credit cooperative may organize chapters or subsidiaries, or join leagues
and federations for the purpose of providing commonly needed essential
services including the following
A. Education and Training
B. Professional and technical assistance
C. Research and development

Novation: A. B. Subrogation C. Delegacion D. Expromission

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RFBT

1. It is a mode of extinguishing obligation wherein debitum pro debito.

2. Compensation is not allowed in the following cases, except:

3. This is essentially gratuitous and requires the acceptance by the obligor

5. Base of the following information:

6. The following are the essential elements of a contract, except:

7. The following are the stages of a contract, except:

9. The following are the classification of novation, except:

11. Novation is equivalent or synonymous to alteration, modification or

12. For an implied novation to arise, it is essential that there is an incompatibility

16. A condition which if imposed on an obligation will be disregarded and will

17. This obligation is demandable at once

21. In what instance may be consider that there is no delay

26. MULTIPLE CHOICE:

27. If an obligation is with a penal clause, I. Proof of actual damages suffered by

31. Facultative are distinguished from alternative obligation

34. Culpa aquiliana as distinguished from culpa contractual

35. If there is no stipulation and the undertaking is to deliver a determinate thing,

36. 1. A, B and C executed a promissory note binding themselves to pay P9000 to

37. 2. A, B and C executed a promissory note binding themselves to pay P9000 to

38. 3. A, B and C executed a promissory note binding themselves to pay P9000 to

39. 4. A, B and C executed a promissory note binding themselves to pay P9000 to

44. An assignor of credit warrants

47. N, R and J solidarily bound themselves to deliver to S a Honda motorcycle

49. Which of the following is an obligation not to do?

1. The following are the essential elements of a contract, except:

2. The following are the stages of a contract, except:

6. Money is a medium of exchange on commercial transactions. All money is a

8. Tender of payment is the manifestation made by the debtor to the creditor of

13. K brosas loaned Aravela Gonzales amounting to P7 million. It is stipulated in

18. A is indebted to solidary creditors W, Y and Z for P90,000 due on August 1,

19. The standard diligence to be observed in the absence of law or agreement

21. Which of the following contracts is valid

22. Which of the following contracts is void

23. Which of the following statement is not correct?

24. To be valid and enforceable, the following contracts should be in writing,

25. The contract is without effect unless ratified

26. A contract which in a person literally contract with himself is

30. Which of the following contracts is unenforceable?

31. Which of the following contract is valid

32. Legal compensation is allowed when one of the debts

36. This does not invalidate the contract

37. Which of the following statement is legally correct

38. Which is not a characteristic of void or inexistent contract

39. The following contracts are void, except

41. The action to annul a voidable contract shall be brought by

44. A. A donated to B a real property the donation is made orally B. A sold to B a

46. MULTIPLE CHOICE:

3. X Y, and Z formed XYZ partnership. One of its creditors is W. The credit is

5. H, I, and J formed HIJ partnership. Subsequently, H died survived by his

6. X, Y and Z formed XYZ partnership. V is the accountant of the partnership. In

8. X and Y are recipients of a gift consisting of an undivided parcel of land from Z.

9. A, B and C formed the ABC partnership. A contributed P500,000, B contributed

13. A capitalist-Industrial partner is one who contributes industry, labor, skill,

16. Surviving partner is the one to be taken as a member into an existing

20. A, B, C and D are partners in Y & Co., a limited partnership contributing

21. A and B entered into a universal partnership of all present property. No

25. A, B and C are general partners in a merchandising firm. They contributed

27. A, B, C and D organized a general partnership with A and B as industrial

28. The following are the effects of unlawful partnership, except

31. When a real property is contributed to the partnership

35. A, B, C and D are partners contributing P20,000, P30,000, P50,000 and