REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

DECEMBER 17, 2021

1:00PM – 4:00PM
Compiled By: 11 Supernova

DISCLAIMER: Not of all these questions are the exact questions itself on the said
CPALE but the concept behind those questions, exists HERE. The importance of the
concept/rationale is important. Padayon, future CPA’s!

P.S. Wag maniniwala sa chismis (BOA yern). Always believe in your preparation and
your efforts will never betray you. ^^

1. Which of the following statements is the best description of a ‘condition

subsequent’?
a. A term in a contract, the consequences of breach of which cannot be determined
until after the breach has occurred and the seriousness of the effects of the breach
can be ascertained. - condition
b. A term in a contract which provides that the contract will terminate on the
happening of a particular event.
c. A term which must be satisfied before a contract can come into existence. –
condition precedent
d. A term in a contract not essential to the main purpose of the contract, non-
performance of which will not entitle the plaintiff to rescind the contract.

2. Two parties had an agreement to buy and sell a thing. Before delivery but after
the agreement, the thing was lost due to fortuitous event making it impossible for
the performance of the contract of sale. What do you call this loss? (non-verbatim)
a. Supervening loss - An unanticipated event outside the control of the contracting
parties
b. Antecedent loss
c. Prevenient loss
d. Impossible loss

3. A wrote a check to B. B used the said check to pay his obligation to C. C did
not encash it for several years. Eventually, the bank went bankrupt and A died. How
is the obligation of B extinguished?
a. Prescription
b. Impossibility of performance
c. Carelessness
d. It was not extinguished.

4. D borrowed P3,000 from C. In order to secure the fulfillment of the contract of

loan. D pledged and delivered his specific laptop to C as collateral for his
obligation. At the maturity date of the loan, D defaulted in the payment of the
obligation. At the maturity date of the loan, D and C voluntarily agreed that the
said laptop shall be used in full settlement of the secured loan. Which is correct?
a. The said agreement is pactum commissorium and therefore null and void.
b. Ownership of the laptop was acquired by C and the contract of loan is fully
extinguished by dacion en pago.
c. Ownership of the laptop was acquired by C by reason of pactum commissorium.
d. The contract of loan is extinguished only if the value of the laptop is equal
to the amount of the loan.

5. A applied for a life insurance with Sun Life Company. During the medical
examination, A sent his healthy twin brother. Based on the result of the medical
examination, Sun Life Company approved the life insurance applied by A. What is the
remedy available to Sun Life Company upon discovery of the substitution?
a. File an action for damages because A is guilty of incidental fraud or dolo
incidente.
b. File an action for annulment of contract because A is guilty of causal fraud
which vitiated Sun Life’s consent.
c. File an action for declaration of nullity because of the want of consent.
d. File an action for rescission of contract because it is intended to defraud
creditor.

6. In which of the following instances are the goods still in transit which allow
the unpaid seller to exercise his right of stoppage in transitu in case of insolvency
of the buyer?
a. If the buyer obtains delivery of the goods before arrival at the appointed
destination.
b. If the carrier or other bailee acknowledges to the buyer or his agent, that he
is holding the goods in his behalf, after arrival of the goods at their appointed
destination.
c. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer
or his agent.
d. If the goods are rejected by the buyer, and the carrier or other bailee continues
in possession of them, even if the seller has refused to receive them back.

7. What is the prescriptive period of the right to file an action based on breach
of warranty of sale of immovable against non-apparent and unregistered burden or
servitude?
a. 40 days from the date of contract of sale or from the discovery of burden.
b. 6 months from the date of contract of sale or from the discovery of burden.
c. 1 year from the date of contract of sale or from the discovery of burden.
d. 3 days from the date of contract of sale or from discovery of burden.

8. D borrowed P100,000 from C and entered into a chattel mortgage involving his
land to secure the payment of his loan. D failed to pay the loan at maturity date.
Which of the following statements is correct?
a. The contract of chattel mortgage is null and void in so far as the contracting
parties are concerned because the subject matter is a land.
b. C cannot foreclose the chattel mortgage over the land because the subject matter
must be a movable property.
c. C may still foreclose the chattel mortgage on the land on the basis of doctrine
of estoppel.
d. Third person directly affected by the contract of chattel mortgage is not allowed
to file an action for declaration of nullity

9. T is indebted for P5,000 to MACE trading company, a partnership managed by M to

whom T also owes P10,000. The two debts which are both demandable are unsecured. T
remits P4,500 to M in payment of his debt to him. Accordingly, M issues a receipt
for his own credit. To which credit should the payment be applied?
a. To M’s credit because the payment made by T is intended for his debt to M who
issues his own receipt.
b. To both the partnership credit and M’s credit proportionately at P1,500 and
P3,000, respectively.
c. To M’s credit because its amount is greater than that of the partnership credit.
d. To the partnership credit because the managing partner should not prefer his own
interest to that of the partnership.

10. MAGIC Company is a partnership composed of M, A, G, I, and C, with M as manager

who is authorized to collect the credits of the partnership. T owes M P4,000 which
is due on December 10, 2050. She also owes MAGIC Company P6,000 which is due on
December 20, 2050. On December 15, 2050, T tendered payment in the amount of P4,000
to M in payment of her debt to the latter. M issued her own receipt acknowledging
the payment. Which is correct?
a. The payment will be applied proportionately to the credits of MAGIC Company and
M in the amount of P1,600 and P2,400, respectively.
b. The payment will be applied in its entirety to M’s personal credit.
c. The payment will be applied in its entirety to MAGIC Company’s credit.
d. The payment will be applied equally to the two debts of T.

11. Which of the following will not cause the automatic dissolution of a general
partnership?
a. Death of a partner
b. Insolvency of a partner
c. When the partnership business becomes unlawful
d. Insanity of a partner

12. Which right is not available to an assignee of a limited partner?

a. The receipt of the assignor’s share of the profits.
b. The receipt of the assignor’s other compensation by way of income.
c. The return of the assignor’s contribution.
d. The inspection of partnership book or account of partnership transactions.

13. Equitable-PCI Bank and BDO Unibank entered into business combination which will
result to BDO Unibank absorbing all the net assets of Equitable-PCI Bank. What type
of business combination is present in this case?
a. Consolidation
b. Merger
c. Dissolution
d. Spin-off

14. Under the old and revised corporation code, which corporate officer is required
to be resident-citizen of the Philippines?
a. President, Secretary and Treasurer
b. Secretary and Treasurer only
c. Secretary only
d. None of the above

15. Which member in a cooperative may invest in the common stocks of the cooperative?
a. Associate member
b. Regular member
c. Provisionary member
d. Temporary member

16. A is indebted to the partnership for P9,000. B is the managing partner and C
is another partner, to whom A is also indebted for P3,000. A paid the P3,000 to C
and C receipted the payment in his own name. Which is correct?
a. The payment of A is fully applied to the obligation of C.
b. The payment of A shall be applied as follows: P2,250 to partnership’s credit and
P750 to C’s credit.
c. The payment of A shall be applied as follows: P750 to partnership’s credit and
P2,250 to C’s credit.
d. The payment is fully applied to the obligation to the partnership.

17. What is the maximum period given to Court of Appeals to resolve petition filed
by AMLC for the issuance of bank inquiry order involving bank accounts of suspected
launderer or freeze order involving bank accounts of suspected launderer?
a. 12 hours
b. 24 hours
C. 36 hours
d. 48 hours

18. It refers to the document to be used to obtain information and/or estimates of

hidden costs incurred by applicants or requesting parties to access government
services which may include, but is not limited to, bribes and payment to fixers.
The result of the survey shall also become basis for the grant of awards, recognition
and/or incentives for excellent delivery of services in all government agencies.
a. Report Card Survey
b. Feedback mechanism
c. Business one stop shop
d. Automatic approval mechanism

19. M made a promissory note payable to P or bearer. P specially indorsed the note
to A. A also specially indorsed it to B. X stole the note from B and delivered it
to C without any indorsement. Who may be held liable to C?
a. X only
b. M and X only
c. M, P, A, and X only
d. M, P, A, B and X

20.* M made a promissory note payable to P’s order. X stole the note and forged P’s
signature as indorser to A. A indorsed the note to B as follows: “Pay to B sans
recourse, (Sgd.)A.” Who among the parties shall be liable to B?
a. X, M and P only
b. X and A only
c. X and M only
d. X only

21. Removal of directors by the stockholders may be with or without cause provided
that removal without cause may not be used to deprive the minority stockholders of
their
a. Appraisal right
b. Pre-emptive rights
C. Right to file derivative suit against the majority stockholders
d. Right of representation to which they maybe entitled under the law.

22. Under Revised Corporation Code, in case the by-laws is silent, what is the
minimum number of days of giving notice in case of meeting of stockholders or board
of directors?

Regular meeting of Special meeting of Meeting of Directors

stockholders stockholders
a. At least two weeks At least one week At least one day
b. At least three days At least two days At least five days
c. At least 21 days At least one week At least two days
d. At least four days At least five days At least six days

23. Which of the following statements relative to infringement and unfair

competition is correct?
a. Infringement of trademark is the act of passing off one’s goods as those of
another.
b. Fraudulent intent is essential in an action for unfair competition.
c. Registration of the tradename is necessary in an action for infringement of
tradename.
d. None of the above.
24. Under the Intellectual Property Code, which of the following cases will result
into the cancellation of a mark?
a. Lack of funds
b. Abandonment due to voluntary cessation of business operations
c. Abandonment due to government order
d. None of the above.

25. One of the following is a feature of a shares of stock

a. It makes the stockholders a creditor of the corporation
b. It is an incorporeal right
c. It represents property of the corporation
d. It requires a certificate of stock to vest ownership.

26. X is a director owning 20% of the outstanding capital stock of ABC Corporation
and 40% of RST Corporation. The two corporation entered into a contract whereby ABC
Corporation sold its commercial lot to RST Corporation. The contract was approved
as follows; ABC Corporation – 4 out of 5 directors voted in the affirmative,
including X; RST Corporation – 5 out of 7 directors voted in the affirmative,
including X. The contract entered into by the two corporation is:
a. Valid
b. Voidable
c. Unenforceable
d. Void

27. Which of the following statements relative to corporate stockholders or members

meetings is true?
a. It is always held on any day of April each year.
b. It can be conducted anywhere in the Philippines.
c. It may be attended by means of proxy.
d. It cannot be called on a special basis.

28. X entered into a voting trust agreement with Y whereby the former transferred
the legal title of all his shares of stock to the latter.
a. X is qualified to run for a seat in the board of directors.
b. X has the right to collect the dividends.
c. X and Y have the right to inspect corporate books.
d. X and Y have the right to vote in the election of the board of directors.

29. X subscribed for 1,000 shares of P500 par value common stock for P500,000. He
was able to pay only P200,000 and so the 600 unpaid shares declared delinquent.
Accrued interest to date amounted to P21,000 and expense for the public sale
amounted to P4,000. The following bids were offered:

A - P325,000 for 800 shares

B - P325,000 for 600 shares
C - P250,000 for 600 shares
D - P200,000 for 400 shares

What is the consequence of the sale to the highest bidder?

D shall own 400 shares and X shall retain 600 shares.
A shall own 800 shares and X shall retain 200 shares.
B shall own 600 shares and the corporation shall own 400 shares.
B shall own 600 shares and X shall retain 400 shares.

30. An executive committee can validly act on the:

a. Amendment of the articles of incorporation of the corporation.
b. Preparation of the plan for merger of the corporation with another corporation.
c. Filing of vacancy in the board of directors.
d. None of the above.

31. Mr. Juan Dela Cruz maintained the following deposits at ABC Bank:

Name of Depositor Type of deposit Balance

Juan Dela Cruz Demand deposit P200,000
Juan Dela Cruz ITF Savings deposit P400,000
Antonio Dela Cruz
Juan Dela Cruz by Time deposit P500,000
Maria Dela Cruz
Juan Dela Cruz by Time deposit P500,000
Maria Dela Cruz or
Pedro Dela Cruz

ABC Bank was liquidated by the Bangko Sentral ng Pilipinas due to financial reverses.
How much is the UNINSURED deposits of Juan Dela Cruz?
a. P500,000
b. P400,000
c. P700,000
d. None of the choices

32. What are "unascertained goods"?

a. Unascertained goods are goods that need to be specifically ordered
b. Unascertained goods are goods that have not been paid for when the contract is
made.
c. Unascertained goods are goods that are not usually stocked by the seller and are
therefore unusual.
d. Unascertained goods are in effect all goods that are not specific.

33. Which of the following is not a valid defense in BP 22 as compared to estafa?

a. Lack of knowledge
b. Good faith
c. Criminal intent to defraud
d. Lack of notice of dishonor

34. ABC Inc. has 7 shareholders, T, U, V, W, X, Y, and, Z, who are concurrently

members of the Board of Directors. Notices of a special meeting was sent to all
directors, except Z because the corporation has no record of her current address.
The meeting was attended by T, U, V, W and they unanimously voted in favor of all
motions brought forward.

I. The meeting is void because notices must be sent to all the directors of record;
II. The meeting is valid because there was a quorum and the
required votes were obtained.

Which is/are true?

a. All
b. None
C. Only I
d. Only II

Sec. 50 RCC – Notices must be sent to All (denial of due process if not sent to
all)
35. What is the required vote for the approval of management contract in the absence
of interlocking directors between the managing and managed corporation?
a. At least majority of the board of directors with ratification of at least 2/3
of the stockholders for both managing corporation and managed corporation.
b. At least majority of the board of directors with ratification of at least
majority of the stockholders for both managing corporation and managed corporation.
c. At least majority of the board of directors with ratification of at least 2/3
of the stockholders for managing corporation and at least majority of the board of
directors with ratification of at least majority of the stockholders for managed
corporation.
d. At least majority of the board of directors with ratification of at least 2/3
of the stockholders for managed corporation and at least majority of the board of
directors with ratification of at least majority of the stockholders for managing
corporation.

36. Who is liable for the payment of the insurance premium for deposits covered by
the PDIC?
a. The depositor
b. The bank
c. The President of the Philippines
d. Both A and B, equally

37. The board of directors approved the issuance of new shares without asking for
the stockholder’s permission. A stockholder complains that his right was violated.
What right was violated?
a. Pre-emptive right
b. Stockholder right
c. Appraisal right
d. Right of first refusal

38. Claire commissioned Miggy to paint her garden. Who owns the painting and the
copyright on the painting, respectively?
a. Both Claire
b. Both Miggy
c. Claire and Miggy, respectively
d. Miggy and Claire, respectively

39. The following statements relative to liquidation and dissolution of cooperatives

are presented to you for evaluation:

I. Upon the dissolution of the cooperative, the reserve fund shall be distributed
among the members. – F; “shall not be”
II. All subsidies, donations, legacies, grants, aids and other assistance from any
local or foreign institutions whether public or private shall donated to the
community where the cooperative operates. – F; “shall be escheated” CDA Memorandum
Circular 2010-08 Section 10
III. Payment of creditors shall be in accordance with the contract upon which it
is based and the provision of the New Civil Code on the preference and concurrence
of credits. – T; CDA Memorandum Circular 2010-08 Section 8

What is the correct evaluation?

a. False; False; False
b. False; False; True
c. True; True; False
d. True; True; True
40. The quorum requirement for cooperative banks is
a. At least 25%
b. 50% plus 1 or 1/2 plus 1 (except amendments to AOI)
c. 1/3
d. 1/4

41. Financial cooperatives are supervised by

a. Bangko Sentral ng Pilipinas
b. Cooperative Development Authority
c. BSP for specific transactions
d. CDA for specific transactions

42. The CDA will automatically dissolve a cooperative even without revoking the
authority when (choose the exception)
a. Failure to meet the required minimum number of members.
b. It has not carried on its business for two consecutive years. – dissolution by
failure to operate
c. Having obtained its registration by fraud.
d. Existing for an illegal purpose.

43. Consider the following:

I. Credit Cooperative is one that promotes and undertakes savings and lending
services among its members, which generates a common pool of funds in order to
provide financial assistance to its members for productive and provident purposes
and whose operations are subject primarily to the regulatory powers and supervision
of the CDA.

II. Financial Service Cooperative is one organized for the primary purpose of
engaging in savings and credit services and other financial services whose
operations are subject primarily to the regulatory powers and supervision of the
CDA.

III. Cooperative Bank is one organized for the primary purpose of providing a wide
range of financial services to cooperatives and their members whose operations are
subject primarily to the regulatory powers and supervision of the CDA.

IV. Insurance Cooperative is one engaged in the business of insuring life and
poverty of cooperatives and their members whose operations are subject primarily
to the regulatory powers and supervision of the
CDA.

Which is/are true?

a. I only
b. All except IV
c. I and II
d. III and IV

44. What is the required reserve fund for an ordinary cooperative?

a. 50% - in the first five years of operation
b. 10%
c. 7% optional fund
d. 3% community development fund

45. Which of the following is not a characteristic of Financial Service Cooperative?

a. The Net Worth of the Financial Service Cooperate shall, at all times, not be
less than an amount equal to eight percent (8%) of its risk assets.
b. Financial Service Cooperative shall maintain a Liquidity Reserve Fund that will
be restricted in nature equivalent to at least two percent (2%) of their savings
and time deposit liabilities.
c. Only those cooperatives with minimum Paid-up capital of at least Ten Million
pesos (Php 10,000,000.00) shall qualify to register as Financial Service
Cooperative.
d. An Elective Officer may be removed by 2/3 vote of the regular members present
and constituting a quorum in a regular or special general assembly meeting called
for the purpose – should be 3/4

46. It shall refer to a cooperative whose membership are in large number and
geographically scattered/distributed by reason of geographical location, work shift or
other similar conditions making it impossible and difficult to conduct their general
assembly meeting.
a. Distributed membership
b. Scattered membership
c. Numerous and dispersed membership
d. Geographical membership

47. A borrows P6M from B. A executes a deed of assignment by way of security over the
shares of stock in favor of B in order to secure payment of the loan. It is stipulated
that upon payment of the loan by A, B will re-convey the shares of stock to A.

I. On due date, if A fails to pay, the shares will remain with B as the owner because
this is a sale with a right of repurchase

II. On due date, if A fails to pay, B must foreclose upon the shares to avoid pactum
commissorium because this is a pledge.

Which is/are true?

a. I only
b. II only
c. Neither
d. Both

48. What will happen to the dormant deposit after 10 years?

a. It shall be reinstated
b. It shall be escheated in favor of the government.
c. Either A or B
d. Neither A or B

49. In which predicate crime of money laundering is the AMLC allowed to inquire bank
deposits of suspected laundered despite the absence of court order from Court of
Appeals?
A. Financing of terrorism
b. Plunder
c. Smuggling
d. Human trafficking

50. Money is already deposited in a bank and asked his lawyer if he could deposit it
to various banks. What stage of money laundering is stated in this scenario?
a. Placement – the launderer inserts dirty money into a legitimate financial
institution.
b. Layering – involves sending money through various financial transactions to change
its form and make it more difficult to follow.
c. Integration – the money re-enters mainstream economy in legitimate-looking form,
appearing to have come from legitimate transaction.
d. Conversion – eme lang to, wag kang ano.
51. Under the Code of Corporate Governance for Publicly-listed companies, which of the
following officers should appear before the SEC when summoned in relation to compliance
with the Code?
a. Chairman of the Board
b. Chief Executive Office
c. Corporate Secretary
d. Compliance Officer

52. It refers to the financial intelligence unit of the Republic of the Philippines
which is entrusted with the implementation of Anti-Money Laundering Law
a. Anti-Money Laundering Council
b. Monetary Board of Bangko Sentral ng Pilipinas
c. Insurance Commission
d. Securities and Exchange Commission

53. Consider the following:

I. Apple claimed that version 2.03 of Microsoft's Window's operating

environment computer software and H-P's New Wave desktop computer software which
operates with Windows, both infringed the audiovisual copyrights in Apple's Macintosh
visual displays and images.

II. A case involving a service that allowed users to “resell” digital mp3 files.

III. Photographer Art Rogers shot a photograph of a couple holding a line of puppies
in a row and sold it for use in greeting cards and similar products. Internationally,
renowned artist Jeff Koons in the process of creating an exhibit on the banality of
everyday items, ran across Rodgers’ photograph and used it to create a set of statues
based on the image. Koons sold several of these structures, making a significant
profit. Upon discovering the copy, Rodgers sued Koons for copyright. Koons responded
by claiming fair use by parody;

IV. For an exhibition in the Gagosian Gallery, Prince appropriated 41 images from a
photography book by French photographer Patrick Cariou, claiming fair use that he
created new meaning out of the photographs. Cariou argued that it wasn’t fair use, but
copyright infringement.

Which are not copyright infringement?

a. I and IV
b. II and III
c. III and IV
d. II and IV

I – no level of originality; desktop functions are not copyrightable

II – violative; essentially making a copy
III – Picture to statue; form is changed but same in the picture
IV – if transformative, not infringement, fair use will apply.

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

a. Information about a individual’s health, education, genetic or sexual life of a
person, or to any proceeding for any offense committed or alleged to have been committed
by such person, the disposal of such proceedings, or the sentence of any court in such
proceedings.
b. Information issued by government agencies peculiar to an individual which includes,
but not limited to, social security numbers, previous or current health records,
licenses or its denials, suspension or revocation, and tax returns.
c. Information specifically established by an executive order or an act of Congress to
be kept classified.
d. Information about the platform of a candidate for national elective position that
is discussed in a public debate televised in national television network.
55. Who shall be entitled to the excess of the proceeds from the sale at public auction
of the thing conventionally pledged after application to the secured loan?
a. Always pledgee
b. Always pledgor
c. Generally pledgee unless granted to the pledgor
d. Generally pledgor unless granted to the pledgee

56. In the absence of stipulation in the Articles of Co-partnership, which of the

following partners may be excluded from the partnership?
a. Industrial partner who engages in any business for himself without express permission
from the partnership.
b. Capitalist partner who engaged in a similar business of the partnership without
express permission from the partnership.
c. Managing partner who engages in any business for himself without express permission
from the partnership.
d. Dormant partner who engaged in a similar business of the partnership without express
permission from the partnership.

57. A issues promissory note to B which is successively indorsed to C, D, E and F,

who is the current holder. F presents the PN to A who dishonors it. F, the holder,
sends a notice of dishonor only to D, therefore, B, C and E are discharged.

I. D can also send notices to B and C to hold them liable

II. If D sends the notices B and C, they also become liable to F
III. If D sends the notice to E, it has no effect on the discharge of E
IV. If E sends the notices to B, C and D, they all become liable to F.

Which are true?

a. I, II & III
b. II, III & IV
c. I, III & IV
d. I, II & IV

I – Sec. 90 NIL; II – B and C not discharged if NOD is received; III – E is not a prior
party; IV – E is discharged, he is not liable.

58. ABC Furniture undertook to deliver to Mr. M specified pieces of tables. The contract
had a penal clause that any violation of the contract would entitle the aggrieved party
to damages in the amount of P10,000. The furniture delivered by ABC Furniture was made
of substandard materials. In a case filed by Mr. M, he was able to prove actual damages
he sustained in the amount of P20,000. If you were to decide based on legal ground, how
much would you award to Mr. M?
a. P30,000
b. P20,000
c. P10,000
d. P5,000

59. Which of the following matters are accorded copyright protection?

a. Photographs taken by a reporter of a sexy movie star.
b. Illustration of playing a board game.
c. News about the assassination of a Senator.
d. Civil code of the Philippines.

60. Consider the following:

Statement I: The chairman of the audit committee of a corporation is an independent

director
Statement II: The compliance officer reports directly to the President of the board of
directors
a. Only Statement I is true
b. Only Statement II is true
c. Both are true
d. Both are false

61. What is the maximum number of signatories in any document involving government
services?
a. Three
b. Two
c. Four
d. Five

62. One of the distinctions between a proxy and a voting trust agreement is that in a
voting trust agreement
a. the representative acquires legal title to the shares to be voted
b. the exercise of the right to vote is limited to a particular meeting
c. the representative cannot vote if the stockholder is present during the meeting
d. the agreement need not be recorded with the Securities and Exchange Commission

63. Which of the following is non-patentable?

a. Aesthetic creations
b. Salt lamp technology
c. Car driven by water-engine
d. Microorganisms

64. Which of the following marks is most likely to be accorded exclusive registration
in accordance with our intellectual property laws?
a. The trademark “SHINEE” for floor wax.
b. The trademark “INSTAGLUE” for adhesive glue that has been manufactured and sold in
the Philippines for three years now.
c. The tradename “ROPE FACTORY, INC.” For manufacturer of ropes and strings.
d. The trademark “RHEUMAPAS” for medicated plaster.

65. Consider the following:

I – Financial service cooperative is one organized for the primary purpose of providing
a wide range of financial cooperatives and their members. Cooperative Bank
II – Cooperative bank is one organized for the primary purpose of engaging in savings
and credit services and other financial services. Financial Service Cooperative
III – Credit cooperative is one that promotes and undertakes savings and lending
services among its members.

Which is/are false?

a. III only
b. I and III
c. II and III
d. I and II

66. A, B, and C are co-owner of an undivided parcel of land. A sold his 1/3 interest
to B absolutely. Which is correct?
a. C may exercise his right of redemption on the interest sold by A to B.
b. C can not exercise the right of redemption because the sale was made in favor of a
co-owner.
c. The sale made by A to B is void because it was not made in favor of a stranger.
d. C may redeem only 1/2 of the interest sold by A to B.

67. Which of the following securities is exempted from registration before Securities
and Exchange Commission?
a. Participation in profit sharing agreement in a partnership
b. Investment contracts issued by networking company
c. Trust certificates and voting trust certificates in a mining company
d. Certificate of time deposit or money market placement issued by a bank

68. A mortgaged his land worth P5M in favor of B to secure a debt of P6M. A sold the
land to C.

I. On due date, B should demand payment of the P6M from A, and if A fails to pay, B
may foreclose the mortgage.
II. B may choose to collect P5M from C, and if C pays B, C can go after A for
reimbursement.

Which is/are true?

a. All
b. None
c. Only one
d. Only two

* Even if stipulated, you cannot recover deficiency.

69. Which of the following is not a qualification for organizers of a primary

cooperative?
a. Must be 15 or more natural persons
b. Must be residents of the Philippines
c. Must be of legal age
d. None of the above

70. This test mandates that the entirety of the marks in question must be considered
in determining confusing similarity.
a. Dominancy test
b. Holistic test
c. Idem Sonans test
d. None of the above

71. What is the quantum of evidence required to sue or file a criminal case for criminal
offense involving violation of BP 22 for issuance of worthless checks?
a. Probable cause or prima facie evidence
b. Clear and convincing evidence
c. Preponderance of evidence
d. Proof beyond reasonable doubt

72. A non-voting stock may vote in
a. approval of the compensation of
b. merger or consolidation
c. increase or decrease in capital
d. sale, lease, exchange, mortgage,
all of corporate property.
the following corporate acts, except in case of
directors
stock
pledge, or other disposition of all or substantially

73. A cooperative that engages in the supply of production inputs to members and markets
their products.
a. Credit Cooperative
b. Consumers Cooperative
c. Marketing Cooperative
d. Producers Cooperative

74. It refers to any legal instrument that gives effect to a government policy
intervention and includes licensing, imposing information obligation, compliance to
standards or payment of any form of fee, levy, charge or any other statutory and
regulatory requirements necessary to carry out activity.
a. Control
b. System
c. Regulation
d. Process

75. What is the quantitative threshold for a covered transaction in by real estate
developers and brokers?
a. A single transaction exceeding P7,500,000 in cash
b. A single transaction exceeding P7,500,000 in cash or cash equivalents
c. A single transaction exceeding P7,500,000 in cash or on account
d. A single transaction exceeding P7,050,000 on account

76. A mortgaged his land worth P5M in favor of B to secure a debt of P6M. A sold the
land to C.

I. On due date, B should demand payment of the P6M from A, and if A fails to pay, B may
foreclose the mortgage.
II. B may choose to collect P5M from C, and if C pays B, C can go after A for
reimbursement.

Which is/are true?

a. I only
b. II only
c. Neither
d. Both

77. Roy and Carlos both undertook a contract to deliver to Sam in Manila a boat docked
in Subic. Before they could deliver it, however, the boat sank in a storm. The contract
provides that fortuitous event shall not exempt Roy and Carlos from their obligation.
Owing to the loss of the motor boat, such obligation is deemed converted into one of
indemnity for damages. Is the liability of Roy and Carlos joint or solidary?
a. Neither solidary nor joint since they cannot waive the defense of fortuitous event
to which they are entitled.
b. Solidary or joint upon the discretion of Sam.
c. Solidary since Roy and Carlos failed to perform their obligation to deliver the
motor boat.
d. Joint since the conversion of their liability to one of indemnity for damages made
it joint.

78. T owes P3,000 to CHAMP Company, a partnership composed of C, H, A, M, and P, with

M as the manager who is authorised to collect all credits of the firm. He also owes C
the amount of P6,000. Both debts are already due. T gives P3,000 to C in payment of his
debt to the latter. C, thus issues his own receipt. Which is correct?
a. Payment will be applied proportionately to the two credits at P1,000 for C’s credit
and P2,000 for CHAMP Company’s credit.
b. Payment will be applied equally to the two credits.
c. Payment will be applied in its entirety to C’s credit.
d. Payment will be applied in its entirety to CHAMP Company’s credit.

79. What are the two responsibilities of the Deputy Privacy Commissioner?
a. Data Processing Systems and Policies and Planning
b. Data Collection Systems and Policies and Planning
c. Data Processing Systems and Finance
d. Data Privacy Systems and Policies and Performance

80. A sold a residential house and lot a price of P10,000,000 payable at P4,000,000
down-payment and the balance of P6,000,000 payable in 50 years at P10,000 per month to
B. After total payments of P4,360,000, B defaulted on the next installment. After
following the necessary procedures required by law, the contract of sale is properly
cancelled. How much cash surrender value is B entitled from A?
a. P2,000,000
b. P2,240,000
c. P180,000
d. P2,180,000

360,000 x 50% = 180,000

360,000/10,000 = 36/12 = 3 years = 50%
4,360,000 x 50% = 2,180,000

81. What is the term for the condition when the obligation will only arise after the
arrival of suspensive condition?
a. Condition precedent
b. Condition subsequent
c. Condition antecedent
d. Condition subsequent

82. Which of the following terms is not within the scope of Data Privacy Act?
a. Third party
b. Profiling
c. Intermediary
d. Security incident

83. Consider the following:

Statement I – In all cases, an industrial partner cannot engage in business for himself.
Statement II – A capitalist partner may prohibit an industrial partner from engaging
in the same kind of business as the partnership.

a. Only the first statement is correct.

b. Only the second statement is correct.
c. Both statements are correct.
d. Both statements are incorrect.

84. Which position may be concurrently held by a president of the same corporation
aggregate?
a. Treasurer
b. Corporate Secretary
c. Chairman of the Board of Directors
d. None of the above

85. Refers to a person who in behalf of another person and with respect to a particular
electronic document sends, receives and/or stores or provides
other services in respect of that electronic document.
a. Originator
b. Intermediary
c. Service provider
d. Addressee

86. Which of the following are not required in a contract of sale?

I. Identifiable goods and price
II. Transfer of ownership of goods
III. Delivery of possession
IV. Third party insurers in case of loss

a. I and II
b. III and IV
c. II and III
d. I and IV
87. Which of the following instruments is negotiable?
a. Pay to bearer, D P10,000. Reimburse yourself out of the rental of my house
in Manila. To B. Sgd. E
b. Pay to D P10,000 or his order out of the rental of my house in Manila. To B. Sgd. E
c. Pay to D P10,000 and reimburse yourself out of the rental of my house in Manila. To
B. Sgd. E.
d. Pay to the order of D P10,000. Reimburse yourself out of the rental of my house in
Manila. To B. Sgd. E.

88. Consider the following

I – No-par value shares may not be issued for a price lower than issued price.
II – Only par value shares may be issued at a price higher than P5.00 per share.
III – Par value share may be issued at a price lower than P5.00 per share

Which is/are false?

a. I and II
b. II only
c. II and II
d. III only

89. Characteristic of void contracts, except

a. Defense of illegality cannot be waived
b. Cannot be ratified
c. Action for declaration of in existence does not prescribe
d. The in existence can be assailed by third person

90. Which of the following is not a requisite of a negotiable promissory note?

a. It must be in writing and signed by the maker.
b. It must contain an unconditional promise to pay a certain sum of money.
c. It must be payable on demand or at a fixed time or at a determinable future time.
d. It must be payable to order or to bearer.

91. It refers to a secret code which secures and defends sensitive information that
cross over public channels into a form decipher able only with a matching electronic
key.
a. Digital signature
b. Electronic key
c. Password
d. Manual key

92. Consider the following

I – Chattel mortgage is a consensual contract and the creditor gets possession of the
thing mortgaged.
II – Pledge is a consensual contract and gives a personal right.
III – Real estate mortgage is a real contract and creates a real right if registered
with the Registry of Property.
IV – Antichresis is an accessory and gives a real right.

a. Only one statement is true

b. Two statements are true
c. Three statements are true
d. All statements are false

93. Demand is necessary in this situation for the debtor to be in delay:

a. When the time is a controlling motive.
b. When the obligor has rendered it beyond his power to perform.
c. When the obligation has been fulfilled.
d. When the debtor delivers a wrong thing on due date.
94. The board of directors of a corporation consists of nine members, where two were
removed and two have resigned, who fills up the vacancy?
I – The remaining members of the board
II – The stockholders

a. both answers are true

b. both answers are false
c. only the first answer is true
d. only the second answer is true

95. What is the number of cooperators or founders of a primary cooperative?

a. 15 or more natural persons
b. Not less than 5 but not more than 15 natural persons
c. 5 but not more than 10 natural persons
d. 10 or more natural persons

96. A partner is a co-owner with his partners of specific partnership property. Such
co-ownership
a. allows a partner to assign his right in such property
b. allows a partner to use such property for partnership business
c. entitles the spouse, children and other relatives of the partner to claim support
from such property
d. gives the private creditors of a partner to attach his right in such property

97. Which of the following will be considered privileged information?

a. Health records of the Data Subject
b. Disclosure of the Data Subject in a tax return
c. Statements made by a Data Subject to his priest
d. A Data Subjects Social Security Number

98. A has two creditors, B and C. B is a mortgage creditor for P20,000, and C is an
ordinary creditor for P10,000. C paid A’s debt of P20,000 to B.

Statement I – If C’s payment is with A’s knowledge, C will be subrogated in the rights
of B.
Statement II – If C’s payment is without A’s knowledge, C will not be subrogated in the
rights of B

a. True, true
b. True, false
c. False, true
d. False, false

99. That stage in money laundering which involves sending money through various
financial institutions to change its form and make it more difficult to follow
a. Placement
b. Layering
c. Integration
d. Preliminary

100. ABC Inc. has 7 shareholders, T, U, V, W, X, Y, and, Z, who are concurrently members
of the Board of Directors. Director T, in accordance with the bylaws, called a special
meeting of the Shareholders and Notices of said meeting was sent to all, except Z
because the corporation has no record of her current address. In that meeting, the
attendees unanimously voted in favor of all motions brought forward.

I. If only X, Y & Z failed to attend the meeting, the meeting and resolutions are valid
II. If Z was able to attend the meeting but protested improper notice, the meeting and
resolutions are still valid
III. If only T, U, V did not attend the meeting, and W protested the
improper notice, the meeting and resolutions are still valid
IV. If all shareholders were able to attend the meeting, despite improper notice, the
meeting and resolutions are valid.

Which are true?

a. III and IV
b. I and II
c. II and III
d. I and IV

101. Which of the following is a negotiable bill of exchange?

a. Pay to the order of R the sum of P20,000. Sgd. S
b. Pay to the order of R the sum of P20,000. Sgd. S
To A or in her absence to M
c. Pay to the order the sum of P20,000. Sgd. S
To A or M
d. Pay to the order of R or J the sum of P20,000
Sgd. S. To A and M

102. Nathan owed Chen P10,000. Chen owed Pampam P10,000. Pampam owed Nathan P10,000.
What mode of extinguishing obligation is present?
a. Confusion
b. Compensation
c. Merger
d. None of the above

103. The articles of incorporation of Pinnacle Corporation provide for 15 directors.

For the year 2020, only 5 meetings of the board of directors were convened because of
the difficulty in mustering a quorum. In view thereof, some transactions of the
corporation which required board approval did not materialized resulting in lost
profits. In preparation for the annual meeting of stockholders, the following were
considered by the board of director as possible solutions for approval of the
stockholders.

I. Amending the by-laws reducing the quorum to 6 directors.

II. Providing a by-law for the creation of an executive committee consisting of 5
members of the board of directors to act on matters that may be delegated to
it by the board.
III. Providing a by-law allowing directors to send representatives during the board
meeting provided that the representative is given a duly notarized special
power of attorney.
IV. Amending the articles of incorporation reducing the number of directors from
15 down to 2 effective the expiration of the term of the incumbent directors.

Which of the above proposed solutions may you validly recommend for submission to the
stockholders?
a. I or III.
b. I or IV.
c. I or IV.
d. II or III.

104. A borrower agreed that in case of non-payment of his debt, to render services as
a servant. Which of the following is not correct?
a. If the services will be rendered in satisfaction of the debt, the stipulation is
valid.
b. If the services will be “for free”, the stipulation is void for being contrary to
law and morals.
c. If the services will not be gratuitous, specific performance of the service will be
the proper remedy in case of non-compliance.
d. Should there be a valid stipulation as regards the rendition of services, an action
for damages should be brought in case of non-compliance.

105. What is required vote for simple amendment of the articles of Incorporation for
legitimate purposes?
a. At least majority vote of the board of directors/trustees provided in Articles of
Incorporation and the vote or written assent of the stockholders representing at least
two-thirds of the outstanding capital stock or the vote or written assent of at least
two-thirds of the members if it be a non-stock corporation.
b. At least majority vote of the board of directors/trustees provided in Articles of
Incorporation and the ratification of the stockholders representing at least two-thirds
of the outstanding capital stock or the ratification of at least two-thirds of the
members if it be a non-stock corporation.
c. At least majority vote of the board of directors/trustees provided in Articles of
Incorporation and the vote or written assent of at least majority of the members if it
be a non-stock corporation.
d. At least majority vote of the board of directors/trustees provided in Articles of
Incorporation and the ratification of the stockholders representing at least majority
of the outstanding capital stock or the ratification of at least majority of the members
if it be a non-stock corporation.

106. Brodie, using his own laptop, sent an email to Lisa offering to give his only Oil
Tanker located at the pier in the City of Manila. Lisa read the said email on his cell
phone. Thereafter, Lisa acknowledged the previous email and accepted the offer of Brodie
via direct message on Brodie’s Instagram account. Given the circumstances:

Statement I: The contract is not valid as to both Brodie and Lisa.

Statement II: The elements of the contract are not in the form of an electronic
document.

a. True, True
b. True, False
c. False, True
d. False, False

107. Which of the following works is not copyrightable?

a. Drawings
b. Computer program
c. Philippine Financial Accounting Standards
d. Lectures or sermons

108. Under Revised Corporation Code, in case of postponement of stockholders’ or

members’ regular meetings, when shall written notice thereof and the reason therefore
be sent to all stockholders or members of record?
a. At least two weeks prior to the date of the meeting, unless a different period is
required under the bylaws, law or regulation.
b. At least five weeks prior to the date of the meeting, unless a different period is
required under the bylaws, law or regulation.
c. At least four weeks prior to the date of the meeting, unless a different period is
required under the bylaws, law or regulation.
d. At least three weeks prior to the date of the meeting, unless a different period is
required under the bylaws, law or regulation.

109. Ana is a partner of ABC Partnership. She is also a director of Ana Corporation.
Ana has the following deposit accounts in a closed Banco Filipino:

Ana’s business (sole proprietorship) – checking account P350,000

Ana’s personal savings deposit 400,000
Ana and Bea and Carla and Darna and Ella Joint Time Deposit 600,000
Ana and Ellen Joint Time Deposit 800,000
Ana and ABC Partnership joint checking account 500,000
Ana and Ana Corporation joint demand account 200,000
Personal loan payable of Ana to the closed bank (100,000)

What is the amount that may be recovered personally by Ana from PDIC?
a. P850,000
b. P750,000
c. P900,000
d. P400,000

110. A, a minor, 15 yeas of age, together with her sisters B and C, both of legal age
are jointly and severally liable in a contract of loan to pay D the amount of P12,000.
Upon maturity of the obligation, A:
a. Is liable to pay only the amount which benefits her.
b. Is liable to pay the amount of P60,000.
c. Is liable to pay the amount of P30,000.
d. Is liable to pay her the whole amount of P120,000.

111. Under Revised Corporation Code, may the corporation with a fixed term whose term
has expired file an application for revival of certificate of Incorporation with SEC?
a. No, because the corporation is ipso facto dissolved by operation of law upon failure
to renew the term within the deadline.
b. Yes, a corporation whose term has expired may apply with SEC for the revival of its
certificate of Incorporation and subject to all of its duties, debts, and liabilities
existing prior to its revival.
c. No, in the absence of court order.
d. Yes, but only with the consent of the Congress of the Philippines.

112. Which of the following obligations is immediately demandable?

a. Obligation payable when debtor’s means permits him to so
b. Obligation with a suspensive condition
c. Obligation ex die
d. Obligation in diem

113. In case of continuous in operation of the corporation, the corporation is declared

delinquent and shall be allowed to comply within a period of
a. 1 year
b. 2 years
c. 3 years
d. 5 years

114. Consider the following:

I. Transport service cooperatives, apart from the certificate of registration, must

still obtain a certificate of public convenience and
necessity from the relevant government agency.
II. Water cooperatives, apart from the certificate of registration, must still obtain
a certificate of public convenience and necessity from the relevant government agency.
III. Electric Cooperatives are registered either with the National Electrification
Administration or the CDA.
IV. Laboratory Cooperatives do not have separate juridical personalities and must be
affiliated with Guardian Cooperatives.

Which are true?

a. All except I
b. All except II
c. All except III
d. All except IV
115. In case of a transaction is both reportable as “covered” and at the same time
“suspicious”, it shall be reported to the AMLC as
a. A covered transaction
b. A suspicious transaction
c. Both a covered and suspicious transaction
d. A complaint for money laundering

116. Ana orally sold her cellphone at a selling price of P10,000 to Bea who obliges to
deliver a tablet worth P6,000 and additional cash of P4,000. What is the contract
entered into by Ana and Bea?
a. Contract of barter
b. Contract for a piece of work
c. Contract of sale
d. Contract of agency to sell

117. Which of the following statements is the best description of a condition?

a. A term in a contract which provides that the contract will terminate on the happening
of a particular event.
b. A term in a contract, the consequences of breach of which cannot be determine until
after the breach has occurred and the seriousness of the effects of the breach can be
ascertained.
c. A term which must be satisfied before a contract can come into existence.
d. A term in a contract, nonperformance of which may result in rescission of the
contract and/or damage to the plaintiff.

118. Which of the following statements relative to checks is false?

a. A manager’s check operates as an assignment of funds to the credit of the payee or
holder which is no longer subject to countermand.
b. A check which is crossed specially can only be deposited in the bank whose name is
written between the parallel lines.
c. A check which is crossed generally can be deposited in any bank where the holder
maintains a deposit.
d. A crossed check is not a negotiable instrument.

119. Which of the following shall be given copyright protection?

a. Maze in “PACMAN” video game
b. Flying position of “SUPERMAN”
c. Evil black-robed Knight in “STAR WARS”
d. None of the foregoing

120. Which of the following contracts cannot be ratified?

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

121. What is the age of members of laboratory cooperative?

a. At least 7 years old but below 18 years of age
b. At least 12 years old but below 18 years of age
c. At least 15 years old but below 18 years of age
d. At least 10 years old but below 18 years of age

122. Under Code of Corporate Governance, what is the nature of the office of a director?
a. It is one of independence.
b. It is one for public interest.
c. It is one of trust and confidence.
d. It is one for creditor’s interest.

123. A, B, and C wrote and signed a promissory note which states “We promise to pay D
and E P60,000.” At the maturity date of the note, D indorsed back the promissory note
to A. How much obligation is extinguished and by what mode of extinguishment of
obligation?
a. P20,000 by confusion
b. P60,000 by compensation
c. P30,000 by remission
d. P10,000 by merger

124. Which of the following statements relative to appraisal right is false?

a. The fair value of the shares of stock as of the day prior to the date on which the
vote was taken, inclusive of any appreciation or depreciation in anticipation of such
action, shall be made the basis for payment upon surrender thereof to the corporation.
b. The parties are given sixty (60) days from the date the proposed corporate action
was voted upon to arrive at the fair value of the dissenting shares.
c. In the event they cannot agree on the said fair value, it shall be determined by
three (3) disinterested persons (one to be named by the stockholder, another by the
corporation and the third by the two thus chosen.)
d. None of the foregoing

125. In the liquidation of the general partnership, indicate the proper order of payment
of partnership liabilities and equity

I. Those owing to the creditors other than partners

II. Those owing to partners other than for capital and profits such as loan payable to
partners
III. Those owing to partners in respect of capital contribution
IV. Those owing to partners in respect of profit share

a. I, II, III, IV
b. I, II, IV, III
c. II, I, III, IV
d. II, I, IV, III

126. It refers to the act of selling or buying a security of the issuer, while in
possession of material information with respect to the issuer or the security that is
not generally available to the public.
a. Wash sale
b. Insider trading
c. Squeezing the float
d. Hype and dump

127. What is required vote for fundamental amendment of the articles of Incorporation
for legitimate purposes?
a. At least majority vote of the board of directors/trustees provided in Articles of
Incorporation and the vote or written assent of the stockholders representing at least
two-thirds of the outstanding capital stock or the vote or written assent of at least
two-thirds of the members if it be a non-stock corporation.
b. At least majority vote of the board of directors/trustees provided in Articles of
Incorporation and the ratification of the stockholders representing at least two-thirds
of the outstanding capital stock or the ratification of at least two-thirds of the
members if it be a non-stock corporation.
c. At least majority vote of the board of directors/trustees provided in Articles of
Incorporation and the vote or written assent of at least majority of the members if it
be a non-stock corporation.
d. At least majority vote of the board of directors/trustees provided in Articles of
Incorporation and the ratification of the stockholders representing at least majority
of the outstanding capital stock or the ratification of at least majority of the members
if it be a non-stock corporation.

128. In the absence of a date fixed in the cooperative by-laws, when shall the regular
meeting by the General Assembly of the cooperative be held?
a. Any date within 90 days after the close of each fiscal year
b. Any day of April
c. April 15
d. Any day of December

129. TRIUMPH Company, a partnership engaged in the buying and selling of car spare
parts, has the following partners with their respective contributions, T – P10,000; R
– P20,000; I – P30,000; U – P40,000; M – P100,000; P – P200,000; and H – P300,000. No
one was appointed as manager of the partnership. In the course of the operation of the
partnership, T proposed to buy car spare parts from Dominion Motors but his proposal
was opposed by R. A voting among the partners took place and I, U, and M aided with T,
while P and H sided with R. Which is correct?
a. The group of T, I, U, and M will prevail because they constitute the majority.
b. The group of R, P, and H will prevail because they constitute the controlling
interest.
c. None will prevail because no one is appointed as manager of the partnership.
d. The partners will have to appoint a manager in order to resolve the conflict.

130. S sold to B, a lot through a deed of absolute sale duly acknowledged before a
notary public. Three days later, S sold the same lot to X, also through a deed of sale
duly acknowledged before a notary public. X had the sale registered with the Register
of Deeds. Neither B nor X was aware of the sale made by S to the other and neither took
physical possession of the lot. Who is the present owner of the lot?
a. B, because he was the first purchaser in good faith.
b. X, because he registered the sale in good faith.
c. Neither B nor X.
d. S, as long as he does not surrender physical possession of the lot.

131. The non-holding of elections under the Revised Corporation Code and the reasons
therefore shall be reported to the Commission _____ from the date of the scheduled
election.
a. 10 days
b. 30 days
c. 20 days
d. 25 days

132. Which of the following inquiries will be considered a violation of the domestic
bank deposit secrecy law?
A. Periodic inquiry or special examination of bank deposit by BSP to ensure the
compliance with the anti money laundering law.
B. Inquiry of the bank deposit by the BIR Commissioner in relation to an application
for compromise of taxable liability or determination of the decedent’s gross state
under National Internal Revenue Code.
C. Inquiry of the bank deposit by PDIC when there are findings of the unsafe or
unsound banking practices
D. Inquiry of the bank deposit by DOJ Secretary for the purpose of persecution of the
members of the opposing political party

133. Deposits that have become dormant for a period of ___ years may be escheated in
favor of the government
a. 5
b. 10
c. 15
d. 20

134. What is the maximum limit on the share ownership of a member in a cooperative?
a. 10% of the share capital of the cooperative
b. 5% of the share capital of the cooperative
c. 25% of the share capital of the cooperative
d. 20% of the share capital of the cooperative
135. Under Revised Corporation Code, which business may be incorporated as a one person
corporation?
a. Banks
b. Preneed company
c. Insurance company
d. Restaurant business

136. Consider the following cases:

I – D owes C P10,000. To secure the debt, D pledged his cell phone. D defaults. The
cell phone is sold for P9,000 at the public auction.
II – D bought a car for P360,000 from C. The price, which is payable in 12 equal monthly
installments of P30,000, is secured by a chattel mortgage on the car. After paying 2
installments, D defaults in the payment of 3 installments. C foreclose the chattel
mortgage and the car is sold at the public auction for P280,000.

The deficiency is recoverable in

a. Both I and II
b. I only
c. II only
d. No deficiency is recoverable in both I and II.

137. Under E-Commerce Act, it refers to a provider of the necessary technical means by
which electronic documents of an originator may be stored and made accessible to a
designated or undesignated third party
a. Originator
b. Service provider
c. Data share
d. Intermediary

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

a. Obligation of depositary in a contract of deposit
b. Obligation of bailee in a contract of commodatum
c. Obligation arising from crime or delict
d. Obligation arising from contract of loan or mutuum

139. M made a promissory note for P100,000 payable to P or order. P altered the amount
by increasing it to P150,000. P then indorsed it to A, and A to B, present holder in
due course.

Which of the following statements is correct?

a. M, P, and A are not liable to B for the material alteration.
b. M is liable to B for P100,000; P and A are liable to B for P50,000.
c. M is not liable to B; P and A are liable to B for P150,000.
d. M, P, and A are liable to B for P150,000.

140. A contracted B to kill his sworn enemy, X, and gave P1,000,000 as consideration
for B’s services. However, before B could his accomplish his task, A had a change of
heart, changed his mind and demanded the return of money from B. Decide
a. A cannot recover the payment he made to B because it was void contract which does
not allow recovery by the guilty party.
b. A cannot recover the money because the contract is unenforceable.
c. Both are in pari delicto where there can be no recovery and both A and B will be
prosecuted for their crime.
d. A can recover the money although the contract is void since the crime was not
committed.
141. DEF Corporation is a stock corporation that has a principal office in Makati City.
Assuming their by-laws is silent on the matter, what are the possible venues for the
upcoming meeting of the Board of Directors?
a. Any place in Makati City only
b. Any place in Metro Manila only
c. Any place in the Philippines only
d. Any place in the world

142. Mr. Don Quixote Doflamingo maintained the following deposits at Dresrossa Bank:

Name of Depositor Type of deposit Balance

Don Quixote Savings deposit P600,000
Doflamingo
Don Quixote Time deposit P500,000
Doflamingo and
Corazon Doflamingo
Don Quixote Demand deposit P800,000
Doflamingo or
Diamanté Doflamingo

Dresrossa Bank was liquidated by the Bangko Sentral ng Pilipinas due to financial
reverses. How much is the INSURED deposits of Don Quixote Doflamingo?
a. P800,000
b. P900,000
c. P1,000,000
d. P500,000

143. For the validity of the decision of the Board of Directors regarding corporate
acts or acts of administration, what is the required/vote?
a. At least majority of the number of directors as fixed in the articles of
incorporation.
b. At least majority of the number of directors filled up.
c. At least 2/3 of the number of directors as fixed in the articles of incorporation.
d. At least majority of the present members of board of directors in a meeting where
there is a quorum.

144. A, B, and C solidarity owe W and Y, solidary creditors P24,000, where the share
of the debtors is 2:3:5 while the creditors is 1:2. The terms of the contract provide:

1. A will pay if Y will pass the October 2019 CPA Board Exams
2. B will pay on February 14, 2020
3. C will pay on September 10, 2019

On September 10, 2019, W can collect from

a. A = P24,000
b. B = P12,000
c. C = P24,000
d. C = P8,000

145. X stole a negotiable promissory note payable to the order of X that is completely
made by M. X subsequently indorsed and delivered the note to A who subsequently indorsed
and delivered the note to B, a holder in due course. Who may be held liable by B?
a. A only
b. X only
c. X and A only
d. M, X, and A
146. X is a stockholder of TVW Corporation. He and other stockholders were recently
denied of their pre-emptive right when the corporation increased its authorized capital
stock and they were also prohibited to exercise the right to vote in the election of
the board of directors. Which of the following actions may be filled by X against TVW
Corporation?
a. Derivative suit for pre-emptive right and right to vote.
b. Representative suit for pre-emptive right and right to vote.
c. Representative suit for pre-emptive right, and individual suit for right to vote.
d. Individual suit for pre-emptive right, and representative suit for right to vote.

147. What is the term of office of the Board of Trustees of an ordinary non-stock
corporation?
a. One year
b. Two years
c. Three years
d. Four years

148. The cooperative has 15 sits in the board of directors. A contract with a self-
dealing director will be the subject matter of the board of directors. In which of the
following scenarios will the contract with such self-dealing directors be considered
perfectly valid even without ratification by members?

Present directors including Approving present directors including

self-dealing director self-dealing director
a. 9 directors 5 directors
b. 8 directors 6 directors
c. 11 directors 6 directors
d. 9 directors 6 directors

149. A non-voting preferred stock cannot vote in:

a. Filling of vacancy in the board
b. Amendment of articles of incorporation
c. Increase or decrease in capital stock
d. Dissolution of the corporation

150. It refers to information generated, sent, received or stored by electronic,

optical, or similar means
a. Electronic communication
b. Electronic data message
c. Electronic transfer
d. Electronic information

151. Which of the following indorsements may make a negotiable instrument non-
negotiable?
a. Facultative indorsement
b. Restrictive indorsement
c. Conditional indorsement
d. Qualified indorsement

152. LeBron is the registered owner of a vacant lot. Kevin stole the certificate of
title of the registered lot of LeBron and through connivance with a notary public, he
was able to execute a notarized deed of sale through forging the signature of LeBron.
With connivance with a Registry of Deeds, Kevin was able to transfer the title of the
lot to his name. Afterwards, Kevin sold the said lot to Carmelo who acquired the said
lot after inspecting the title and the vacant lot. Carmelo is a purchaser in good faith
and for value. Which of the following statements is correct?
a. The contract of sale between Kevin and Carmelo is void because it is the product of
a previous void contract.
b. LeBron can recover the land from Carmelo because the title acquired by Carmelo is
that of a thief even without reimbursing Carmelo.
c. LeBron can recover the land from Carmelo provided he will reimburse him for the
price Carmelo paid.
d. LeBron cannot recover the land from Carmelo because a forged document or deed of
sale, in case of registered lot, can be a root of a valid title if the title is already
in the hand of a purchaser for value and in good faith.

153. This provides that an infringement also takes place when a device appropriate sa
prior invention by incorporating its innovative concept and, although with some
modification and change, performs substantially the same function in substantially the
same way to achieve substantially the same result.
a. In Pari Passu
b. Equivalents
c. Ignorantia Legis non excusat
d. Literal infringement

154. X Bank borrowed P100M from ABC Corporation, giving by way of real estate mortgage,
its warehouse. X was not able to pay and ABC Corporation extrajudicially foreclosed the
mortgage. How long is the redemption period in this case?
a. 1 year
b. 90 to 120 days
c. Registration of the sale or 3 months, whichever is shorter
d. There is no redemption right

155. The time consumed by an LGU of National Agency (NGA) from the receipt of an
application or request with complete requirements accompanying documents and payment
of fees to the issuance of certification or such similar documents approving or
disapproving an application for request
a. Approved time
b. Documented time
c. Processing time
d. Completed time

156. What is required vote for declaration of cash or property dividends?

a. Approval by at least majority vote of the board of directors and ratification by
stockholders representing at least 2/3 of the outstanding capital stock.
b. Approval by stockholders representing at least 2/3 of the outstanding capital stock.
c. Approval by at least majority vote of the board of directors and ratification by
stockholders representing at least majority of the outstanding capital stock.
d. Approval by at least majority vote of the board of directors.

157. Interest income from bank deposits are considered as

a. Natural fruits
b. Industrial fruits
c. Civil fruits
d. Juicy fruits

158. What is the maximum amount to be granted as compensation to board of directors of

a corporation in such capacity as directors?
a. 10% of the net income of corporation after tax of the current year.
b. 10% of the net income of corporation before tax of the current year.
c. 10% of the net income of corporation after tax of the immediately preceeding year.
d. 10% of the net income of corporation before tax of the immediately preceeding year.

159. A, B, and C solidarity owe W and Y, solidary creditors P24,000, where the share
of the debtors is 2:3:5 while the creditors is 1:2. The terms of the contract provide:

1. A will pay if Y will pass the October 2019 CPA Board Exams
2. B will pay on February 14, 2020
3. C will pay on September 10, 2019
Assuming Y passed the October 2019 CPA Board Exams, Y can collect from
a. A or C = P16,800
b. B = P4,800
c. A = P12,000
d. A or B or C = P12,000

160. Which of the following defenses is a real or absolute defense which can be
successfully raised against a holder in due course?
a. Want of authority of agent
b. Want of delivery of complete instrument
c. Absence or failure of consideration
d. Acquisition of instrument by force, duress, fear, or by unlawful means

161. The Articles of Incorporation and By-laws provide for a maximum 15 directors of
Keshi Inc. during 2021:

I – Three directors resigned and four directors died. The vacancies can be filled up
either by plurality vote of the majority of the outstanding capital stock entitled to
vote or by majority vote of the remaining members of board of directors.

II – Three directors were removed by stockholders’ vote and two directors’ term expired.
The vacancies can only be filled up by plurality vote of the majority of the outstanding
capital stock entitled to vote.

III – Two directors resigned, two directors died and four directors were disqualified.
The vacancies can only be filled up by plurality vote of the majority of the outstanding
capital stock entitled to vote.

a. Only one statement is true

b. Only two statements are true
c. All statements are true
d. All statements are false

162. Which of the following accounts is not prohibited by the Anti-Money Laundering
Law?
a. Numbered accounts
b. Non-checking numbered accounts
c. Anonymous accounts
d. Fictitious accounts

163. The following decisions in a cooperative require 3/4 vote of members entitled to
vote, except
a. Removal of officer of a cooperative
b. Amendment of articles of cooperation of a cooperative 2/3 of all members with voting rights
c. Ratification of disloyalty committed by a director of a cooperative
d. Merger or consolidation of a cooperative

164. They are persons who guaranteed on a firm commitment and/or declared best effort
basis the distribution and sale of securities of any kind by another company.
a. Stockholders
b. Members
c. Underwriters
d. Incorporators

165. Consider the following:

I – If notice of non-payment by the drawee bank is not sent to the maker or drawer,
then the presumption or prima facie evidence of knowledge of insufficiency of funds
cannot arise.
II – The presumption of knowledge of insufficiency of funds or credit does not lie when
the check is presented after 90 days from the date of the check.

a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

166. H and W are legally seperate based on a court judgment. The decision requires H
to give monthly support to W of P10,000 at the beginning of each month. On March 2020,
W purchased goods on account from H’s business in the amount of P10,000 with maturity
date on May 1, 2020. H has not given W’s monthly support for the months of April 2020
and May 2020. Which is incorrect?
a. If W demands her support for the month of April, H may set up compensation as regards
to the debt W owes him.
b. If W demands her support for the month of May, H may claim compensation as regards
to the debt W owes him.
c. If H demands payment of the debt from the sale of goods, W may set up compensation
as regards to her support for the month of April.
d. If H demands payment of for the debt from the sale of goods, W may set up compensation
as regards to her support for the month of May.

167. D, E are capitalist partners while F is an industrial partner in their restaurant

business. Later, F put up a cellular phone loading stations, sells call cards and other
cellphone accessories. Has F any liability under the circumstances?
A. No, since his other business is not competing with the business of the partnership.
B. Yes, because he can’t engage in business for himself always.
C. Yes, because he is precluded by law to engage in any other business, except if there
is stipulation allowing him.
D. No, there is no showing that the business of the partnership is being prejudiced.

168. They are the persons who acting alone or with another take initiative in founding
and organising the business or enterprise of the issuer and receive consideration
therefor.
a. Promoters
b. Corporators
c. Directors
d. Stockholders

169. The act of processing sensitive personal information for unauthorised purposes is
punishable by
a. 1.5 to 5 years of imprisonment and fine of P500,000 to P1,000,000
b. 2 to 7 years of imprisonment and fine of P500,000 to P2,000,000
c. 1.5 to 5 years of imprisonment and fine of P500,000 to P2,000,000
d. 2 to 7 years of imprisonment and fine of P500,000 to P1,000,000

170. M made a promissory note to the order of P for P10,000. P indorsed the note to A.
X stole the note from A, forged his (A’s) signature and indorsed it to B. B, in turn,
indorsed the note to C, holder in due course.

Who among the parties can be held liable to C?

a. M, P, X, A and B
b. P, X, A and B only
c. X, A and B only
d. X and B only

171. Which of the following stipulations in a contract of pledge is null and void?
I – A stipulation which provides that the contract of pledge is not extinguished by the
return of the thing pledged.
II – A stipulation allowing the appropriation by the pledge of the thing pledged in
case the same is not sold in the first and second auctions.
III – A stipulation for the recovery of deficiency in case the proceeds from the sale
of the thing pledged is less than the amount of the obligation.

a. I and III
b. II and III
c. I and II
d. I, II, and III

172. In case of legal pledge, if the thing held in pledged by operation of law is sold
by the creditor in public auction resulting to deficiency, may there be recovery of
deficiency by the creditor?
a. No even if stipulated because any stipulation for recovery of deficiency in of pledge
is void.
b. Yes even if not stipulated
c. Yes but it must be stipulated by the contracting parties
d. No because it is pledged by operation of law.

173. What are the exceptional cases wherein the courts may pierce the veil of corporate
fiction so that the stockholders, directors or officers will become personally liable
for corporate debts?
a. When the corporate entity is used to commit fraud or to justify a wrong or to defend
a crime or to commit tax evasion. (Fraud cases)
b. When the corporate entity is used as a mere alter ego, business conduit or
instrumentality of a person or another entity. (Alter ego cases)
c. When the corporate entity is used to defeat public convenience such as in case of
labor case. (Defeat public convenience cases)
d. When piercing of the corporate fiction is necessary to achieve justice or equity.
(Equity cases)
e. Any of the above.

174. Which government agency has the authority to reactivate an unclaimed balance
account?
a. Bureau of Internal Revenue
b. Bureau of Customs
c. Bureau of Treasury
d. Bureau of Unclaimed Balance

175. Tyrone, a resident of Pasay City, has an obligation to deliver a Honda car with
plate number MIMA – 0069 to Sassa, a resident of Taguig City with a stipulation that
the said car shall be delivered in Quezon City. At the time of constitution of the
obligation, the said car is located in Manila City. At the date of delivery, the said
car is located in Makati City. Where shall the car be delivered by Tyrone to Sassa?
a. Pasay City
b. Makati City
c. Manila City
d. Quezon City

Specific Thing – GR: Place designated in the obligation

If no place designated:
Specific thing – whatever the thing might be at the moment the obligation was
constituted. wherever
Generic thing – place/domicile of the debtor

176. Which of the following legal principles best describes the strong juridical
personality of a corporation?
a. Limited liability rule
b. Seperate entity theory
c. Business judgment rule
d. Right of succession or continuity of existence

177. In the winding up or liquidation of a cooperative, to whom shall any cooperative’s

asset distributable to any creditor, shareholder or member who is unknown or cannot be
found be given?
a. To the city or municipality where the asset is located.
b. To the federation or union to which the cooperative is affiliated with.
c. It will be escheated in favor of the Republic of the Philippines.
d. To the members of the cooperative.

178. Under Revised Corporation Code, in case the by-laws is silent, who shall preside
the regular meeting of board directors or regular meeting of shareholders?
a. Chairman of the board
b. President
c. Secretary
d. Treasurer

179. One of the following statements does not characterize a delinquent stock:
a. A stock becomes delinquent when the subscription is not paid in full within the 30-
day grace period or on the date of the “call” after due notice to the stockholders.
b. A “call” is not necessary where the subscription contract has provided for a definite
date of payment.
c. A delinquent stock loses its right to receive dividends up to the time of delinquency
sale.
d. Any cash dividend shall first be applied to unpaid subscription before the balance
thereof will be given to the stockholder but any stock dividend shall be withheld until
full payment of the subscription.

180. What is the voting requirement before an electric cooperative already registered
before National Electrification Administration (NEA) be registered with the CDA?
a. 5% of all members in good standing
b. 25% of all members in good standing
c. 20% of all members in good standing
d. 3/4 of all members in good standing

181. On March 1, 2022, Jabee through a text message, offered to sell his land to Makdo
for P10,000. Makdo accepted Jabee’s offer by sending an email to Jabee on March 2,
2022, which Makdo was able to read on March 3, 2022. On March 4, 2022, wondering if
Jabee received his email, Makdo sent a text message to Jabee signifying once again his
acceptance of Jabee’s offer, to which Jabee immediately replied, “K”. When was the
contract of sale of land perfected?
a. March 1, 2022
b. March 2, 2022
c. March 3, 2022
d. March 4, 2022

182. Which of the following statements is false?

a. A “broker” is a person who engaged in the buying and selling od securities for the
accounts of others.
b. A “dealer” is a person who is casually engaged in the buying and selling of securities
for his own account.
c. An “associated person of a broker or dealer” does not include the employees or the
broker or dealer whose functions are solely clerical or ministerial.
d. An “associated person of a broker or dealer” does not include his salesman performing
nondiscretionary functions.

183. D borrowed P10,000.00 from C the debt being payable in 6 months. To secure the
debt, D promised to pledge his ring within 2 weeks. Two weeks had already lapsed but
D had not yet constituted the pledge.
Statement I: C may demand the constitution of the pledge.
Statement II: C may not demand immediate payment of the debt.

a. Both statements are true.

b. Both statements are false.
c. I is true; II is false.
d. I is false; II is true.

184. It refers to the type of waiver of warranty against eviction made by the buyer
without the knowledge of the risk of eviction.
a. Waiver intencionada
b. Waiver consciente
c. Waiver redhibitoria
d. Waiver obligaria

185. Which of the following corporate legal doctrines refers to the doctrine of separate
juridical personality?
a. It means that a corporation is a juridical entity with legal personality separate
and distinct from those acting for and in its behalf and, in general, from the people
comprising it; and that obligations incurred by the corporation, acting through its
directors, officers and employees are its sole liabilities.
b. It means that a stockholder is personally liable for the financial obligations of
the corporation to the extent only of his unpaid subscription or that a stockholder’s
liability for corporate debts extends only up to the amount of his capital contribution.
– Limited Liability Rule
c. It means that the capital stock of a corporation or the assets of an insolvent
corporation representing its capital is a trust fund reserved for the benefit of
company’s creditors. – Trust Fund Doctrine
d. It means that the corporation has the capacity for continuous existence despite the
death or replacement of its shareholders or members, for it has a personality separate
and distinct from those who compose it. – Right of Succession

186. It refers to any freely given, specific, informed indication of will, whereby the
data subject agrees to the collection and processing of personal information about
and/or relating to him or her.
a. Offer of the data subject
b. Consent of the data subject
c. Acceptance of the data subject
d. Objection of the data subject

187. Which of the following transactions must be processed within 20 working days?
a. Basic transactions
b. Simple transactions
c. Complex transactions
d. Highly technical transactions

188. Three of the following are requisites for the existence

of de facto corporation except:
a. Incorporated under a valid law
b. Actual use of corporate powers
C. Existing law and in fact
d. Attempt in good faith to organize

189. The following data are provided by Jutang Credit Cooperative, a cooperative already
existing for at least five years:

Interest income on loan granted to members P900,000

Service fees revenue 50,000
Membership fees revenue 3,000
Operating expenses 683,000
Interest on share capital holdings 70%
Interest on patronage refunds 30%

What is the net surplus of the cooperative?

a. P270,000
b. P220,000
c. P223,000
d. P217,000

190. Using the same data in 189, what is the total statutory reserve to be deducted
from the net surplus before computation of interest on share capital holdings assuming
the maximum fund is given for other optional funds?
a. P81,000
b. P35,100
c. P54,000
d. P72,900

191. Using the same data in 189, what is the minimum interest on share capital holdings?
a. P56,700
b. P25,200
c. P32,100
d. P36,300

900 + 50 + 3 – 683 = 270

270*30% = 81
270*70%*30% = 56.7

192. Who has the burden of proving the authenticity of an electronic data message or
electronic document in any legal proceeding?
a. The person who sent the electronic data message.
b. The person who signed the electronic document.
c. The person denying the authenticity of said electronic data message or electronic
document.
d. The person seeking to introduce said electronic data message or electronic document.

193. X stole a promissory note that is completely made by M. X indorsed the note to A,
then A to B, present holder in due course. Who may be held liable to B?
a. A only
b. X only
c. X and A only
d. M, X and A

194. Which of the following statements is false regarding payment of insured deposit
by PDIC
a. Payment may be made in cash or through making available to each depositor a
transferred deposit in another insured bank in an amount equal to insured deposit of
such depositor.
b. The claim for insured deposit should be settled within six months from the date of
filling provided all requirements are met but the claim must be filed within twenty
four months after bank turnover.
c. The six month period shall not apply if the documents of the claimant are incomplete
or if the validity of the claim requires the resolution of issues of facts and law by
another office, body or agency, independently or in coordination with PDIC.
d. The depositors of the closed insured bank has twelve months from date of bank
takeover to file his deposit insurance claim.

195. The following are the qualifications of a corporate president, except

a. He must be a director of the corporation
b. He must be a stockholder of the corporation
c. He must neither be a secretary nor a treasurer of the same corporation
d. He must be a resident citizen of the Philippines

196. Consider the following:

I – Notice of dishonor under BP 22 may be oral or in writing.

II – Violation of BP 22 is cathegorized as a transitory or continuing crime.

a. Both are correct

b. Both are incorrect
c. I is correct, II is incorrect
d. I is incorrect, II is correct

197. S and B agreed in writing for the sale of authentic Coach bag at a price of
P50,000. At the time of delivery of the bag, S delivered a counterfeited replica bag.
What is the remedy available to B?
a. File an action for annulment of contract because S is guilty of causal fraud which
vitiated B’s consent.
b. File an action for damages because S is guilty of dolo incidente.
c. File an action for declaration of nullity because the subject matter is illegal.
d. File an action for rescission of contract because it is intended to defraud creditor.

198. Which of the following inventions will be afforded patent protection?

a. A therapeutic machine that heals and eliminates and blemishes on any part of the
skin.
b. Computer program
c. Mere combination of different strains of bacteria
d. Procedures for computing net profit from business ventures

199. Period to transfer the shares to the heirs of the OPC.

a. 5 days
b. 10 days
c. 7 days
d. 60 days

200. What is the Philippines rank in world bank’s ease of doing business report in
2018?
a. 124
b. 113
c. None of the choices
d. 99

“Put your trust in the Lord.”

Psalm 112:7