RFBT Pre-Week

Page 1 of 21 | Pre-week Regulatory Frameworks of Business Transactions MAY 2024 BATCH 1. Which of the following statements is/are true? Statement I: The condition not to do an impossible thing shall annul the obligation which depends upon them. Statement II: In all instances, when a defendant is acquitted in a criminal case, he cannot anymore be held civilly liable Statement III: A person can never be held liable for the negligent acts of another Statement IV: By stipulation, a creditor can waive the delivery of accessions 2. Which of the following best describes an accession? a. Attached to the principal thing for its embellishment b. It must go together with the principal thing for its use c. Includes everything produced by a thing d. Keys to a car is an example w Statements III and IV only Statement IV only Statements I, II and III only All of the statements ie a. b. c. d. C PA R ev 3. Anna obliged herself to deliver a watch, a bag or a bracelet to Bettina. The right of choice was expressly given to Bettina. Before Bettina was able to communicate her choice, the watch was stolen without Anna’s fault. Which of the following statements is correct? a. Anna is liable for damages for the loss of the watch b. Bettina can rescind the contract and ask for damages c. Bettina can choose between the bag or bracelet d. Bettina can choose the value of the watch, bag or bracelet R EO 4. Ian, Bern and Julia are individually and jointly liable to Mac for Php 600,000. Mac also owes Ian Php200,000. Both debts are already due and demandable. On the due date of the loan to Mac, how much can Mac collect from Bern? a. 0 b. 600,000 c. 400,000 d. 200,000 5. Rihanna by mistake delivered to Alicia and Jay Php100,000 by mistake, which should have been delivered to Mario and Justin. Rihanna now demands the return of the money from Alicia and Jay. The liability of Alicia and Jay to return the money is: a) Joint b) Solidary c) They are not liable to return d) Mario and Justin has the right to recover, not Rihanna 6. Jackie, 16, inherited a townhouse. Because she wanted to study in an exclusive school, she sold her townhouse by signing a Deed of Sale and turning over possession of the same to the buyer. When the buyer discovered she was still a minor, she promised to execute another Deed of Sale when she turns 18. When Jackie turned 25 and was already working, she wanted to annul the sale and return the buyer's money to recover her townhouse. Can Jackie annul the deed of sale? a. No, because the contract of sale is valid b. No, because there is ratification already c. No, because the action to annul has already prescribed d. Yes, because the contract of sale is voidable REO.CPA.ACADEMICS.F2.04.00 Page 2 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions 7. A, while drunk, sold his land verbally to X Corporation, whose shares is 50% owned by Filipinos and the remaning 50% owned by aliens. The sale is: a. Rescissble b. Voidable c. Unenforceable d. Void 8. The proper remedy is annulment of contract and not reformation when: a. mistake, fraud, inequitable conduct or accident prevented the meeting of the minds of the parties b. a mutual mistake of the parties causes the failure of the instrument to disclose their real agreement c. one of the parties was mistaken and the other knew or believed that the instrument did not state their real agreement, but conceal the fact from the former d. a deed of sale was executed for a contract of donation 9. Statement I. The action for rescission of rescissible contracts must be brought within 4 years. ev R PA Which of the foregoing statements is correct? a) Both statements are correct b) Only Statement I is correct c) Only Statement II is correct d) None of the statements is correct ie w Statement II. For persons under guardianship and for absentees, the period of four years for the rescission of contract commences upon the effectivity of the contract EO C 10. Bea orally authorized Dominic to sell her condominium. Dominic sold Bea’s house to Gerald in writing. The sale is: a. Valid b. Unenforceable c. Void d. Voidable R 11. Tiff, a minor, sold her sister’s phone to Mae without authority. The phone’s value is at Php50,000, but Tiff sold it for only Php20,000. The sale of the phone is: a. Valid b. Unenforceable c. Rescissible d. Voidable 12. The difference between corporations and partnerships is that in corporations: a. The liability extends up to private properties b. There is no dissolution in case of death, withdrawal or resignation of an owner c. The interest or ownership is transferable only if the other owner consents d. It is created by mere consent of the owners 13. Lucy is a lessee of a store in a shopping mall. She orally sells/assigns her right to Salome. She then allows Salome to occupy the stall. The delivery here is called: a. quasi-traditio b. actual delivery c. traditio longa manu d. traditio brevi manu 14. Which is false about a corpora�on? a. A corpora�on has a legal personality dis�nct and separate from its stockholders. b. A corpora�on may be en�tled to an award of moral damages where its good reputa�on is besmirched resul�ng into social humilia�on. c. The interest of shareholders in corporate property is purely inchoate. REO.CPA.ACADEMICS.F2.04.00 Page 3 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions d. A corpora�on is not within the protec�on of the Cons�tu�on regarding the right to be secure against unreasonable searches and seizures. 15. The effectivity date of the Revised Corporation Code is: a. January 1, 2019 b. February 23, 2019 c. December 21, 2019 d. January 5, 2020 16. X, the President of ZZZ Corporation, was authorized by the Board of Directors of ZZZ Corporation to obtain a loan from YYY Bank and to sign documents in behalf of the corporation. X personally negotiated for the loan and got tile loan at very low interest rates. Upon maturity of the loan, ZZZ Corporation was unable to pay. Which statement is most accurate? a. Because X was personally acting in behalf of the Corporation, he can be held personally liable. b. X, as President, cannot be personally held liable for the obligation of the corporation even though he signed all the loan documents, because the loan was authorized by the Board. c. YYY Bank can choose as to who it wants to hold liable for the loan. d. If ZZZ Corporation cannot pay, X can be held subsidiarity liable. R ev ie w 17. The following corporations are not allowed to issue no-par value shares of stock, except: a. Banks b. Preneed companies c. Educational institutions d. Public utilities EO C PA 18. Statement I: Redeemable shares may be issued by a corporation even if there is no provision in its articles of incorporation for such purpose Statement II: Redeemable shares may be redeemed by a corporation only if the corporation has unrestricted retained earnings a. Both statements are true b. Both statements are false c. Only Statement I is true d. Only Statement II is true R 19. Which of the following statements is false? a. A partnership and a corporation may form a corporation b. A stockholder who dissents from the decision of the corporation formed prior to the Revised Corporation Code to retain its specific corporate term may exercise his appraisal right c. Corporations with certificates of incorporation issued prior to the effectivity of the Revised Corporation Code and which continue to exist, shall have perpetual existence, unless the corporation, upon a vote of its stockholders representing 2/3 of its outstanding capital stock, notifies the SEC that it elects to retain its specific corporate term d. An educational institution does not need a favorable recommendation from the appropriate government agency for the revival of its certificate of incorporation 20. The corporation has a 15-member board. Three of the members of the Board have sold their shares while three others are abroad. To have a quorum, this number is required: a. Seven b. Six c. Five d. Eight 21. What is the classifica�on of dividends declared by X corpora�on in the form of shares of stocks of Y corpora�on which X corpora�on owns? a. Stock dividend b. Liquida�ng dividend c. Scrip dividend d. Property dividend REO.CPA.ACADEMICS.F2.04.00 Page 4 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions 22. Dennis subscribed to 10,000 shares of XYZ Corporation with a par value of P100 per share. However, he paid only 25% of the subscription or P250,000.00. No call has been made on the unpaid subscription. How many shares is Dennis entitled to vote at the annual meeting of the stockholders of XYZ? a. 10,000 shares b. 2,500 shares c. 250 shares d. 0 shares 23. A nonvoting stock may vote in the following corporate acts except in case of: a. Amendment of the articles of incorporation b. Merger or consolidation c. Approval of the compensation of directors d. Dissolution ie w 24. Which is not a power of a corporation? a. To sue and be sued b. Succession c. Making donations in aid of any political party by any kind of corporation d. Establishment of retirement and other benefit plans for its directors, trustees, officers and employees C PA R ev 25. Which of the following statements is false about an independent director? a. An independent director must be at least a college graduate b. Independent directors must be elected by the shareholders present or entitled to vote in absentia during the election of directors. c. Under the Code of Corporate Governance, publicly listed companies must have at least 3 independent directors or 1/3 of the Board whichever is higher d. The maximum cumulative term for independent directors is 5 years R EO 26. The rule that protects directors who act with due care and in good faith, as long as their decisions are lawful and in the best interests of the corporation. a. Fairness rule b. Business judgment rule c. Loyalty rule d. Good faith rule 27. The non-holding of elections and the reasons therefor shall be reported to the SEC within ___ days from the date of the scheduled election. The report shall specify a new date for the election, which shall not be later than ___ days from the scheduled date. a. 30;90 b. 30;60 c. 60;45 d. 60;90 28. Should a director, trustee or officer die, resign or in any manner cease to hold office, the secretary, or the director, trustee or officer of the corporation, shall, within _____ days from knowledge thereof, report in writing such fact to the SEC. a. Five b. Three c. Ten d. Seven 29. In case of material contracts entered by a corporation vested with public interest with its own director, in addition to the requirements in Section 31 of the Revised Corporation Code, it must also be approved by: a. At least 2/3 of the outstanding capital stock REO.CPA.ACADEMICS.F2.04.00 Page 5 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions b. Majority of the board of directors and 2/3 of the outstanding capital stock c. At least 2/3 of the entire membership of the board with at least a majority of the independent directors voting to approve the material contract d. All of the board of directors 30. The determination of whether or not the sale involves all or substantially all of the corporation’s properties and assets must be compute based on: a. Fair value b. Book value c. Net asset value d. Current value ie w 31. ABC Corporation, a manufacturing corporation, would like to sell a piece of land located in Bulacan. The piece of land is the corporation’s biggest asset. The sale must be approved by: a. Majority of the quorum of the board of directors b. Majority of the board of directors c. Majority of the board of directors and 2/3 of the outstanding capital stock d. Majority of the quorum of the board of directors and 2/3 of the outstanding capital stock C PA R ev 32. So that ABC Corporation could venture into more projects, it needed to raise funds by issuing new shares to increase its capitalization. X, Y, Z, J and G are the five existing shareholders of the company. They hold 20% each. How will the additional shares be divided among the existing shareholders? a. The existing shareholders can subscribe to the new shares equivalent to their existing shareholdings because the Corporation Code provides that each of the existing stockholders will have preemptive rights to the extent of their existing shareholdings. b. The existing shareholders' preemptive rights is equivalent to the percentage that they want. c. Each of the existing shareholder can exercise their right of first refusal against each other. d. Preemptive rights and right of first refusal are one and the same. R EO 33. The term of one (1) year of the Board of Directors of AAA Corporation expired last February 15, 2022. No new election of the Board of Directors was called, hence, the existing members of Board continue as Directors in hold over capacity. Which statement is most accurate? a. This is allowed provided there is a valid and justifiable reason for not calling for an election of the new members of the Board. b. This is not allowed because the term of the directors must only be for one (1) year. c. The positions of the members of the Board of Directors will be automatically declared vacant. d. Acting as members of the Board of Directors in a hold over capacity must be ratified by the stockholders. 34. The By-laws of ABC Corporation is silent as to when a stockholder can be qualified to attend the meeting of the stockholders. The Corporate Secretary sent out the notice of the stockholders meeting two (2) days before the meeting and at that time X was not yet a stockholder. On the day of the meeting, however, X became a shareholder which was duly recorded in the stock and transfer book. Which statement is most accurate? a. X is a stockholder of ABC Corporation as of the time of meeting of the stockholders for the purpose of electing the members of the board. b. X is not qualified to elect members of the board because at the time the notice of the meeting was sent, she was not yet a stockholder. 35. This person shall have the duty to notify the SEC of the death of the single stockholder of a one person corporation: a. Corporate secretary b. Nominee c. Alternate nominee d. Heirs 36. XXX Corporation and YYY Corporation have agreed to be merged into one corporation. To facilitate the merger, both corporations agreed that the merger be made effective on May 31,2022. The Securities and Exchange Commission (SEC) approved the Articles of Merger on June 30, 2022. Which statement is most accurate? REO.CPA.ACADEMICS.F2.04.00 Page 6 of 21 | Pre-week a. b. c. d. MAY 2024 BATCH Regulatory Frameworks of Business Transactions The effective date of the merger is May 31, 2022, the date stipulated by the parties as the effective date. The effective date of the merger is always the date of the approval of the Articles of Merger by the SEC. The effective date of the merger would be the date approved by the Board of Directors and the stockholders. The stockholders and the Board of Directors can set the effective date of the merger anytime after the approval of the SEC. 37. AAA Corporation is a wholly owned subsidiary of BBB Corporation. To support the business of AAA Corporation, BBB Corporation agreed to give its corporate guarantee to the loan of AAA Corporation. What is required so that the corporate guarantee will be valid? a. It only requires the approval of the Board of Directors of BBB Corporation. b. The Articles of Incorporation must provide such power and be approved by the Board of Directors. c. Providing corporate guarantee to another corporation is a necessary exercise of power of a corporation. d. It would require both the approval of the Board of Directors and the stockholders on record. 38. X is a minority stockholder of CCC Corporation. Y is a member of the Board of Director of CCC Corporation and at the same time he is the President. X believes that Y is mismanaging CCC Corporation hence, as a stockholder and in behalf of the other stockholders, he wanted to sue Y. Which statement is most accurate? C PA 39. The term “securities” does not include: a. Shares of stock b. Voting trust certificates c. Lease contracts d. Bonds ev ie w X can institute a derivative suit in behalf of himself as a stockholder. A derivative suit must be instituted in behalf of the corporation. Derivate suit is an exclusive remedy that X can institute. Derivative suit is not the remedy in this situation. R a. b. c. d. R EO 40. Which of the following is exempted from registration with the SEC before he engages in the business of buying of buying and selling securities in the Philippines? a. Brokers and dealers b. Associated persons of broker or dealer c. Salesmen of broker or dealer d. None of the foregoing 41. X borrowed the certificates of stock of Y to be used as security for a loan. Thereafter, the market price of the shares zoomed up and X sold the said shares in the trading market. X returned the amount equivalent to the par value of the shares to Y and pocketed the profit he made from the sale. This transaction is what is known as: a. Wash sale b. Short sale c. Insider trading d. None of the foregoing 42. One of the following statements is not a characteristic of an ordinary non-stock corporation: a. Membership may be terminated in the manner and for the causes provided in the articles of incorporation and by-laws b. The board of trustees must be composed of its members; provided that that the representatives of corporate members may be nominated and elected in the board of trustees as may be provided in the articles of incorporation or bylaws c. The number of incorporating trustees must not be less than 5 nor more than 15 but the board of trustees may later on be composed of more than the maximum number as may be provided in the articles of incorporation or bylaws REO.CPA.ACADEMICS.F2.04.00 Page 7 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions d. The term of office of the trustees shall be 5 years with 1/5 of their number to expire each year 43. In which of the following is sale not presumed equitable mortgage? a. The price of the sale usually adequate. b. The vendor remains in possession of the thing sold. c. The vendor allows the extension of �me to repurchase the thing sold. d. The purchaser retains for himself a part of the purchase price. 44. a. b. c. d. Delivery by giving of the keys of the place or depository where the movable is stored or kept Traditio clavium Constitutum possesorium Traditio longa manu Traditio brevi manu 45. Statement I: When goods are delivered to the buyer "on sale or return" to give the buyer an option to return the goods instead of paying the price, the ownership passes to the when the buyer signifies his approval R ev Both statements are true Both statements are false Only Statement I is true Only Statement II is true PA a. b. c. d. ie w Statement II: when goods are delivered to the buyer on approval or on trial or on satisfaction, or other similar terms, the ownership therein passes to the buyer on delivery June 5, 2023 June 4, 2023 May 5, 2023 July 5, 2023 R a. b. c. d. EO C 46. On January 5, 2020, Enzo purchased a condominium from JNS Developers for Php5,000,000 payable in ten years. After three years of payment, Enzo defaulted in payment. Despite the grace period granted to him, Enzo was unable to pay the balance. Thus, JNS Developers sent him a notarial notice of cancellation and payment of the cash surrender value on May 5, 2023. When is the contract of sale considered cancelled? 47. Knowing that the car had a hidden crack in the engine, X sold it to Y without informing the latter about it. In any event, the deed of sale expressly stipulated that X was not liable for hidden defects. Does Y have the right to demand from X a reimbursement of what he spent to repair the engine plus damages? a. Yes. X is liable whether or not he was aware of the hidden defect. b. Yes, since the defect was not hidden; X knew of it but he acted in bad faith in not disclosing the fact to Y. c. No, because Y is in estoppel, having changed engine without prior demand. d. No, because Y waived the warranty against hidden defects. 48. The minimum repair attempts in order for the Lemon Law to apply is: a. Four b. Five c. Six d. Two 49. This means sales devices whereby a person, upon condition that he makes an investment, is granted by the manufacturer or his representative a right to recruit for profit one or more additional persons who will also be granted such right to recruit upon condition of making similar investments REO.CPA.ACADEMICS.F2.04.00 Page 8 of 21 | Pre-week a. b. c. d. MAY 2024 BATCH Regulatory Frameworks of Business Transactions Closing out sale Pyramid sale schemes Investment contract Credit sale 50. The mortgagor of a real property that is the subject of an extrajudicial foreclosure sale resides in Legazpi City. The property is located in Naga City. The mortgage contract provided that any action arising from the mortgage shall be filed in Sorsogon City. The foreclosure sale shall be held in: a) Legazpi City b) Naga City c) Sorsogon City d) Any of the above PA R ev ie w 51. Sonny Inc., (SI) purchased several heavy machineries from Single Equipment Philippines, Inc. (SEP) for PhP 10 million, payable in 36 monthly installments. A chattel mortgage was constituted on the same machineries as security for the amount. As additional security, the President of SI, Stan Smith, mortgaged his personal house and lot. SI failed to pay the 16th and succeeding monthly installments. SEP then commenced a collection suit against SI, and in the course of the proceedings, a writ of attachment was issued against SI’s properties, including the mortgaged machineries. The attached properties were subsequently sold at public action, but the proceeds thereof were insufficient to satisfy the judgment credit. Which of the following statements is false? a. SEP can no longer recover the deficiency because the Recto Law prohibits recovery of deficiency in case of foreclosure of mortgage b. SEP may be allowed to collect the deficiency from SI c. SEP chose to exact fulfillment of the obligation d. Instead of collecting the deficiency, SEP could have commenced extrajudicial proceedings to foreclosure the mortgage on Stan Smith’s house and lot R EO C 52. D mortgaged his parcel of land to C as security for a loan. Fearing foreclosure of the mortgage due to his inability to pay the loan, D sold the land to X without the consent of C. is the sale valid? a. No, unless there was prior consent of the mortgage. b. Yes, stipulation prohibiting the sale without the consent of the mortgagee shall be void. c. Yes, provided the mortgagee was notified before the sale. d. No, of there was stipulation requiring prior consent. 53. Trixie pledged her ring to Maria as security for her loan. Trixie delivered the ring to Maria. A month after, Trixie requested that the ring be returned to her because of its sentimental value. Trixie promised that she still acknowledges the pledge over the ring. For this purpose, Trixie executed a notarized contract of pledge in favor of Maria. What is the status of the contract of pledge between Trixie and Maria? a. Valid b. Void c. Voidable d. Unenforceable 54. The following applies to BP 22, except: a) BP 22 is mala prohibita b) BP 22 is a cime against property c) The drawer of a dishonored check may be convicted even if he had issued the same for a pre-existing obligation d) Deceit is not required 55. If the check was dishonored for the reason that there was a “stop-payment order”, there will be a violation of BP 22 if: a. The stop payment order was without any valid reason b. The payee was not informed of the stop payment order REO.CPA.ACADEMICS.F2.04.00 Page 9 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions c. The check would have been dishonored due to insufficiency of funds had not the drawer ordered the bank to stop payment d. The stop payment order was made after the check was presented for payment 56. Under the FRIA, which of the following petitions amounts to an act of insolvency? a) Suspension of payments b) Rehabilitation c) Voluntary liquidation d) None of the above 57. Under the FRIA, if an individual debtor would like to file for voluntary liquidation, his debts must: a. At least be 500,000 b. Exceed 500,000 c. At least be 1,000,000 d. Exceed 1,000,000 ev ie w 58. When should be a commencement order be issued if the court finds the petition for commencement for rehabilitation to be sufficient in form and substance a) 5 working days from the filing of the petition b) 20 working days from the filing of petition c) At least 60 days from the date of filing d) 10 days from its issuance C PA R 59. Which of the following acts is within the ambit of a stay or suspension order under the FRIA? a. Cases pending appeal before the Supreme Court as of commencement date of the stay or suspension order b. Claims against issuers of letters of credit where the property is not necessary to the rehabilitation of the debtor c. Both a and b d. Neither a nor b R EO 60. Under the FRIA, who among the following may be appointed as a rehabilitation receiver? a. An individual who he is engaged in the same line of business which competes with the business of the debtor b. A partner or stockholder of the debtor c. An auditor of the debtor for a period of 2 years prior to the filing of petition for rehabilitation d. None of the above 61. The following are administrative expenses referring to reasonable and necessary expenses, except: a. Those incurred in the ordinary course of business of the debtor before the commencement date b. Those incurred or arising from the filing of petition under the FRIA c. Rehabilitation receiver fees d. Payment of new obligations obtained after the commencement date to finance the rehabilitation of the debtor 62. For rehabilitation proceedings under the FRIA, the rehabilitation court shall set the case for initial hearing within: a. 30 days from issuance of commencement order b. 40 days from issuance of commencement order c. 30 days from the filing of petition d. 40 days from the filing of petition 63. This is the stage in the bidding process conducted to ensure that the procurement is in accordance with the Project Procurement Management Plan and Annual Procurement Plan: a) Pre-procurement conference b) Pre-bid conference c) Bid opening d) Bid evaluation REO.CPA.ACADEMICS.F2.04.00 Page 10 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions 64. This is an undertaking which states, among others, that the bidder shall enter into contract with the Procuring Entity and furnish the required performance security within ten (10) calendar days, as indicated in the Bidding Documents, from receipt of the Notice of Award, and commits to pay the corresponding amount as fine and be automatically disqualified from bidding of any procurement contract of any Procuring Entity for a period of time, upon receipt of the Blacklisting Order, in the event it violates any of the conditions stated therein as required in the guidelines issued by the GPPB. a) Bid security b) Bid securing declaration c) Bidding documents d) Performance security ie w 65. Rachel, Monica and Phoebe are equal partners of XYZ Partnership. Joey owes the XYZ Partnership for Php9,000. Rachel, a partner collected from Joey, P3,000 before Monica and Phoebe received anything. Rachel issued a receipt on the P3,000 as her share of what Joey owes. When Monica and Phoebe collected from Joey, Joey was insolvent. A. Rachel shall share partners Monica and Phoebe with the P3,000 B. Rachel cannot be required to share Monica and Phoebe with the P3,000 C. Monica and Phoebe should first exhaust all remedies to collect from Joey. D. Monica and Phoebe can automatically deduct from the capital contributions of Rachel in the partnership their respective share in the P3,000 66. Statement No. 1: The contributions of a limited partner may be cash or property, but not services. C PA Which of the following statements is true? a. All statements b. Statement 1 and 2 only c. Statement 1 and 3 only d. Statement 1 only R ev Statement No. 2: A limited partner may take part in the control of the business Statement No. 3: A person may be a general partner and a limited partner in the same partnership at the same time R EO 67. Dielle, Karlo and Una are general partners in a merchandising firm. Having contributed equal amounts to the capital, they also agree on equal distribution of whatever net profit is realized per fiscal period. After two years of operation, however, Una conveys her whole interest in the partnership to Justine, without the knowledge and consent of Dielle and Karlo. Is the partnership dissolved? a. Yes, because Una conveyed her whole interest to another b. No, a conveyance by a partner of his whole interest in a partnership does not of itself dissolve the partnership in the absence of an agreement c. No, because there is no agreement to dissolve d. Yes, because the conveyance of interest was made without knowledge by the other partners 68. A, B and C are capitalist partners engaged in a retail business. Their contribution is P20,000 each. D is admitted as a new partner with a contribution of P8,000.00. At the time of his admission, the partnership has an outstanding obligation to E in the amount of P80,000.00. In this case: a) D is not liable to E for this obligation b) D is liable to E for this obligation so that the amount of P68,000.00 will be exhausted leaving a balance of P12,000.00 and only A, B and C shall be liable jointly or pro-rata, out of their separate property. c) D is liable to E for this obligation so that after the assets of the partnership will be exhausted, leaving a balance of P12,000.00, all the partners shall be liable jointly or pro-rata, out of their separate property. d) Answer not given. 69. I. Every partner may associate another person with him in his share, provided it is with the consent of all of the other partners. II. The capitalist partners cannot engage for their own account in any operation which is of the kind of business in which the partnership is engaged, unless there is stipulation to the contrary. REO.CPA.ACADEMICS.F2.04.00 Page 11 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions III. Every partnership shall operate under a firm name, which shall include the name of one or more of the partner. IV. All partners, excluding industrial ones, shall be liable pro-rata with all their property and after all partnership assets have been exhausted, for the contracts which may be entered into in the name of and for the account of the partnership, under its signature, and by a person authorized to act for the partnership. a) False; True; False; False b) True; True; False; False c) False True; False; True d) True; True; True; False 70. F, G H and I are partners. They contributed capital as follows: F – P50,000.00; G – P30,000.00; H – P20,000.00 and I, as an industrial partner, his services. The partnership obligation to outsiders exceeds the total net assets by P18,000.00. Who and by how much will the partners be liable for the payment of P18,000.00? a) F – P9,000.00; G – P5,400.00; H – P3,600.00; I – Nothing b) F – P4,500.00; G – P4,500.00; H – P4,500.00; I – P4,500.00 c) F – P6,000.00; G – P6,000.00; H – P6,000.00; I - Nothing d) F – P4,500.00; G – P2,700.00; H – P1,800.00; I – P9,000.00 C PA R ev ie w 71. Statement I: A concealment should be intentional in order to entitle the injured party to rescind a contract of insurance. Statement II: Each party to a contract of insurance must communicate to the other, in good faith, all facts within his knowledge which are material to the contract and as to which he makes no warranty, and which the other has not the means of ascertaining. a. Both statements are true b. Both statements are false c. Only Statement I is true d. Only Statement II is true R EO 72.In which of the following cases is the insurer liable? a) The insured concealed the fact that he is diagnosed with tuberculosis. He died from a vehicular accident 6 months later. b) The insured unintentionally omitted in his application form the fact that he was suffering from a heart ailment. c) The insured mentioned in his application form that he is not smoking when in fact he is a chain smoker d) The insured concealed the fact that he was suffering from Stage 4 lung cancer. He died 4 years later 73. This shall be responsible for the continuous and periodic review of the books and records of account of a cooperative to ensure that these are in accordance with generally accepted accounting practices. a. Accountant b. Bookkeeper c. Audit committee d. External auditor 74.All cooperatives registered with the Cooperative Development Authority (CDA) shall be required to submit annually Cooperative Annual Progress Report (CAPR) with supporting documents with the CDA. Which of the following is NOT a supporting document to be attached to the CAPR? a. Social Audit report including its program of activities pursuant to its socio-civic goals b. Report on the total compensation of each of the directors and officers. c. List of officers and trainings undertaken / completed. d. Audited financial statements. 75.The following statements relative to merger or consolidation of cooperatives are presented to you for evaluation. I. Cooperatives belonging to the different category can be parties to the merger or Consolidation. REO.CPA.ACADEMICS.F2.04.00 Page 12 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions II. III. The affirmative vote of at least three-fourths (3/4) of all members with voting rights, present and constituting a quorum from each of the constituent cooperatives, at separate general approval representative assembly meetings shall be necessary for the approval of the Plan of Merger or Consolidation. In case of merger O consolidation of the cooperatives, the constituent cooperatives shall become a single cooperative which, in case of merger, shall be the survivor cooperative, and in the case of consolidation, shall be the consolidated cooperative. What is the correct evaluation? a) b) c) d) Statement I, True; Statement II, False; Statement III, False. All statements are false Statement I, False; Statement II, True; Statement III, True All statements are true ie w 76.Which of the following statements is not true about the compensation of directors of a cooperative? a) As a rule, directors are not entitled to additional compensation except for reasonable per diems b) During the first year of existence of the cooperative, directors will not receive any compensation including per diems c) The bylaws may provide for compensation of the directors d) Directors are not entitled to per diems if in the preceding calendar year, the cooperative reported a net loss PA R ev 77. The following accounts are maintained in Banco Inidoro: Maria Clara: 500,000(Savings Deposit) Maria Clara or Ibarra: 600,000(Savings Deposit) Maria Clara and Ibarra: 500,000(Time Deposit) Maria Clara or Ibarra or Klay: 450,000(Time Deposit) EO C If Banco Inidoro is closed by the BSP, how much can Maria Clara claim from PDIC? a. 1,000,000 b. 500,000 c. 750,000 d. 1,250,000 R 78. The PDIC shall not pay deposit insurance for the following accounts or transactions except: a. Trust accounts b. Bonds c. Securities d. Dollar time deposit 79. The Truth in Lending Act applies to: a. Pawnshops b. Small-loan money lenders c. Both a and b d. Neither a nor b 80. Which of the following is not included in the coverage of RA 1405 or the Bank Secrecy Law? a. Peso savings account b. Trust accounts c. Peso time deposit d. Dollar current account 81. Under RA 6426 or the Foreign Currency Deposit Act, which of the following statements relative to foreign currency deposits is false? REO.CPA.ACADEMICS.F2.04.00 Page 13 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions a. The foreign currency deposits maintained abroad by Filipino citizens are not covered by the provisions of the Act b. Depositary banks which have been qualified by the Monetary Board to function under the expanded foreign currency deposit system are exempt in maintaining the 15% foreign currency cover for their liabilities in the form of foreign currency deposit with the Bangko Sentral c. Foreign currency deposits are of absolutely confidential nature, except upon the written permission of the depositor d. Foreign currency deposits are subject to attachment, garnishment or any other order or process of the court 82.The following accounts are maintained in Bank Pink: Type Amount Jennie Savings Php500,000 Jennie or Rose Savings Php600,000 BP Corpora�on Time Deposit Php500,000 Jennie and BP Corpora�on Demand Deposit w Account Name ie Php500,000 ev If Bank Pink is ordered closed by the BSP, how much can the depositors recover from the PDIC? Rose a 750,000 250,000 1,000,000 b 500,000 300,000 500,000 c 750,000 250,000 500,000 d 500,000 300,000 1,000,000 EO C PA R Jennie BP Corpora�on R 83.This is a remedy that the State or prosecution may avail when a criminal information is filed against a person charged with an unlawful activity or a money laundering offense to hold and conserve a property, and forbid any transaction or disposition. a) Freeze order b) Bank inquiry order c) Forfeiture case d) Asset preservation order 84. This refers to the procedure of identifying and verifying the true identity, of customers, and their agents and beneficial owners, including understanding and monitoring of their transactions and activities. a. Strict due diligence b. Average due diligence c. Normal due diligence d. Customer due diligence 85. Smurfing, or the structuring of large amounts of cash into multiple small transactions, is engaging in: a. Placement b. Layering c. Integration d. Structuring REO.CPA.ACADEMICS.F2.04.00 Page 14 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions 86. The global money laundering and terrorist financing watchdog a. Anti-Money Laundering Council b. Financial Action Task Force c. World Bank d. International Money Laundering Network 87. Statement 1: Lawyers and accountants who are authorized to practice their profession in the Philippines; and engaged as independent legal or accounting professionals, in relation to information concerning their clients, or where disclosure of information would compromise client confidences or the attorney-client relationship are not required to file covered transaction reports. w a. b. c. d. Statement 2: Lawyers and accountants, however, are not precluded from submitting suspicious transaction reports to the AMLC with regard to any transaction of their clients that is in any way related to money laundering or terrorism financing or related unlawful activity that is about to be committed, is being or has been committed. Only the first statement is true. Only the second statement is true. Both statements are true Both statements are false. PA R ev ie 88.A natural person who ultimately owns or controls the customer and/or on whose behalf a transaction or activity is being conducted: a) Beneficiary b) Trustor c) Beneficial Owner d) Covered person R EO C 89.One type of risk is the risk of failed internal control processes, people and systems caused by external risk factors such as money laundering activities. If a covered person is unable to manage this risk effectively, it can result in exposure to legal action, reputational risks and financial losses. This type of risk is known as __________. a. Operational risk b. Reputational risk c. Concentration risk d. Legal risk 90.Which of the following remedies is available to a true and actual inventor deprived of patent for his invention? a) Be substituted as patentee b) Ask for cancellation of the patent c) Either a or b d) Neither a nor b 91.Which of the following will not be considered as copyright infringement? a) Singing a cover of “Gusto ko nang bumitaw” by an accountancy student and uploading it on Youtube b) A bus playing the movie “Barbie” to entertain its passengers while on travel c) Reciting “Annabel Lee” by Edgar Allan Poe for a school presentation d) Photocopying an entire book for classroom use 92. I. Piracy is punishable by a maximum fine of 100,000 and mandatory imprisonment under the E-commerce act II. Unauthorized access in a computer system is considered as hacking a. Both statements are true b. Both statements are false c. Only Statement I is true d. Only Statement II is true 93. Which of the following is not a sensitive personal information? REO.CPA.ACADEMICS.F2.04.00 Page 15 of 21 | Pre-week a. b. c. d. MAY 2024 BATCH Regulatory Frameworks of Business Transactions License plate SSS number Medical records Tax returns 94. Banks involved in phone banking tell their callers that the conversation with their call center agent would be recorded, and that proceeding with the call is indication of their consent. This practice is consistent with what right of the data subject? a. Right to data portability b. Right to be informed c. Right to object d. Right to reasonable access ie w 95. Which of the following is not considered a permanent total disability under the SSS Law? a. Complete loss of sight of both eyes b. Brain injury resulting to insanity c. Permanent loss of one arm d. Loss of two limbs above the ankle C Both statements are true Both statements are false Only Statement I is true Only Statement II is true EO a. b. c. d. PA R ev 96. Statement I. If a deceased retired SSS member has no primary beneficiaries, 100% of his monthly pension shall be received by his secondary beneficiaries Statement II. If a deceased retired SSS member has no primary and secondary beneficiaries, a lump sum benefit equivalent to the total monthly pension corresponding to the balance of the five-year guaranteed period, excluding the dependent’s pension and additional benefit allowance shall form part of his/her estate and shall be paid to his/her legal heirs in accordance with the law of succession. a. b. c. d. R 97. Starting October 20, 2023, claimants of deceased members with 36 or more monthly contributions may receive a funerable benefit in the variable amount ranging from 20,000 to 60,000 40,000 to 60,000 20,000 to 40,000 20,000 to 30,000 98.If a member of the SSS suffers from a permanent partial disability due to the permanent loss of the sight of one eye and he has paid at least 36 monthly contributions prior to the semester of disability, the monthly disability pension shall be paid no longer than: a. 39 months b. 46 months c. 25 months d. 50 months 99. George worked from 9 am to 12 midnight May 1 which also happens to be his rest day, with a one hour meal break,. Compute George’s total pay for that day if his hourly rate is P350. a. 14,614.60 b. 14,378.00 c. 7,280.00 d. 12,740.00 REO.CPA.ACADEMICS.F2.04.00 Page 16 of 21 | Pre-week MAY 2024 BATCH Regulatory Frameworks of Business Transactions R EO C PA R ev ie w 100. If a worker works on a day when there are two holidays in one day, the worker is entitled to: a. 100% pay b. 200% pay c. 300% pay d. 400% pay REO.CPA.ACADEMICS.F2.04.00