CIVIL LAW -- 15%

1. The majority age begins at the age of

A. 21
B. 20
C. 18
D. 16

2. Who may solemnize marriage anywhere in the Philippines?

A. A Consul-general
B. A Court of Appeals justice
C. A ship captain
D. A military commander

3.To be enforceable, when must a contract comply with the Statute of Frauds? When by its terms it is
to be performed beyond

A. a year from its making.
B. 5 years from its making.
C. a year from its ratification.
D. 5 years from its ratification.

4.) An uninterrupted possession for a statutory period of time without the need of just title and good
faith are requisites for

A. laches.
B. prescription of actions.
C. ordinary acquisitive prescription.
D. extraordinary acquisitive prescription.

5.) Sonny, a Filipino citizen, obtained in a divorce in Canada from his wife, Lulu, also a Filipino citizen.
Is the divorce valid and binding?

A. It is not since Philippine law binds Filipinos abroad and it does not permit divorce.
B. It is since Philippine law does not operate in Canada.
C. It is not since Philippine law is recognized in Canada.
D. It is since international law demands local recognition of foreign acts.

6.) In a case, a very old woman executed a will. A friend, a cousin, and a notary public came to witness
the will. Due to old age she thumbmarked the will instead of signing it. The friend signed the pages on
the right margin, thinking it looked better. The cousin did not see this because his eyes were on a
painting that hanged on a nearby wall. Finally, the notary public notarized the will. The will is invalid
because

A. the cousin looked away just as the friend was signing the will.
B. the testator failed to subscribe the will.
C. the friend signed at the right margin.
D. of lack of sufficient witnesses.

Answers: 1.) C 2.) B 3.) A 4.) D 5.) A 6.) D

TAXATION -- 10%

1.) Fringe Benefit Tax is payable by the
A. Employee
B. Donor
C. Employer
D. Beneficiary

2.) The following can claim for a tax credit, except
A. Citizen
B. Beneficiary of an estate or trust
C. Member of a General Professional Partnership
D. Foreign corporation

3.) Optional Standard Deduction is applicable to all individuals except
A. Resident Aliens
B. Non-resident aliens
C. Resident Citizens
D. Non-resident Citizen

4.) A fringe benefit may be subject to fringe benefit tax if received by
A. any employee
B. rank and file employees
C. managerial employees
D. Stockholders

5.) A laundry allowance of P300 per month is an example of
A. fringe benefit
B. allowance
C. tax benefit
D. de minimis benefit

6.) Which of the following forms part of the stages of taxation?
A. payment and filing
B. filing and collection
C. withholding and levying
D. assessment and payment

7.) Any good, service or other benefit furnished or granted in cash or in kind by an employer to an
individual employee refers to
A. de minimis benefit
B. company benefit
C. fringe benefit
D. annuity

8.) Fringe benefit tax is imposed on the fringe benefit's
A. fair market value
B. actual monetary value
C. grossed-up monetary value
D. assessed value

9.) The following fringe benefits are not taxable except
A. fringe benefits which are authorized and exempted from tax under special laws
B. life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law
allows
C. benefits given to the rank and file employees, whether granted under a collective bargaining agreement or not
D. de minimis benefits

10.) Deductions from gross income are not allowed to taxpayers earning compensation income arising from
personal services rendered under an employer-employee relationship, except
A. bad debts
B. ordinary and necessary trade, business or professional expenses
C. charitable and other contributions
D. premium payments on health and/or hospitalization insurance of an individual taxpayer

11.) X is a Brazilian citizen working as a host and model in a local television show here in the
Philippines. X is therefore taxable as a
A. non resident alien engaged in trade or business
B. resident alien
C. foreign citizen
D. resident citizen

12.) The following dividends are taxable except
A. property dividends
B. liquidating dividends
C. cash dividends
D. stock dividends

13.) Under the tax code, the following are income taxpayers, except:

a. GOCC
b. Estate and Trust
c. Min wage income earners
d. non-resident foreign corp.

Answers: 1.) C 2.) D 3.) B 4.) C 5.) D 6.) D 7.) C 8.) C 9.) B 10.) D 11.) B 12.) B 13.) c


MERCANTILE LAW (COMMERCIAL LAW) -- 15%

1.) The bank deposit secrecy law bars all inquiries into a bank deposit. A deposit may, however, be
looked into

A. after prior notice to the depositor.
B. upon court order in annulment of marriage cases.
C. in cases of impeachment.
D. on motion in a bribery case.

2.) A draws a bill payable to B or order with X, as the drawee. The bill was successively endorsed to C,
D, E and F, holder. X does not pay and F has duly protested non-payment. Y pays for the honor of C.
Which of the following statement is wrong?

A. D is discharged.
B. E is discharged.
C. C is discharged.
D. Y can ask reimbursement from A.

3.) When an endorser waives presentment and notice of dishonor, he increases his liability. His
endorsement is:

A. Facultative endorsement
B. Qualified endorsement
C. Alternative endorsement
D. Restrictive endorsement

4.) Ariel issued a note to Brando. There was a total failure of consideration. Brando issued the note for
consideration to Cecil who is a holder in due course. Cecil indorsed the note to David who knew of the
failure of consideration. Can David successfully collect from Ariel?

A. No, because David knew the failure of consideration.
B. No, although David acquired the rights of Cecil, a holder in due course and he was not a party to any
illegality.
C. Yes, because David acquired the note for consideration.
D. No, because David is not a holder in due course.

5.) The SEC, after notice and hearing, may dissolve a corporation upon filing of a verified petition for
the dissolution, on grounds provided by law. Which of the following statement is not correct?

a. In case of deadlock in the management of the affairs and business of a close corporation, the SEC,
upon written petition by any stockholder, shall have the power to make such order as it deems
appropriate, including an order dissolving the corporation.
b. Any stockholder of a corporation may, by written petition to the SEC, compel the dissolution of the
corporation whenever any acts of its directors, officers or those in control of the corporation is illegal,
fraudulent or dishonest.
c. The SEC can automatically issue a certificate of dissolution in case a corporation filed for its
dissolution and there are creditors affected provided that majority of the board of directors or trustee
consented to such action.
d. The SEC, after notice and hearing, may dissolve a corporation in case there are violations of the
provisions of the Corporation Code not specially penalized therein.

6.) Which of the following will cause the automatic dissolution of a corporation?

a. Commission by the corporation of an ultra vires act
b. Continuous non-operation for a period of at least 5 years
c. Refusal to comply with or defiance of any lawful order of the SEC restraining commission of acts
which would amount to grave violation of its franchise
d. None of the above

7.) SUJU Corporation, through its Board of Directors and with the unanimous approval of the
stockholders declared to grant stock dividends to its stockholders for the year 2008 amounting to 79
Billion Pesos. After examining the books and other records of the corporation, Sungmin Lee, Vice
President for Finance, discovered that the authorized capital stock of the Corporation is almost
depleted, that is almost all were already issued and the remaining cannot accommodate the needed
stocks for stock dividend distribution. The Corporation though was liquid in cash and has retained
earnings amounting to 365 Billion Pesos. How should the Board of Directors of SUJU Corporation best
act on it?

a. Issue a Board Resolution deferring the distribution of dividends for the said year.
b. Increase the authorized capital stock and amend the Articles of Incorporation of SUJU Corporation to
cater to the needed stocks for stock dividend distribution.
c. Divide the remaining unissued stocks pro rata to the stockholders as stock dividends.
d. Recall its previous Resolution declaring stock dividends and in its stead, issue another Resolution
declaring cash dividends for year 2008.

8.) FYI Corporation has increased its capital stock and new shares of stock are issued. The stockholders
of FYI Corp wish to exercise their pre-emptive right regarding the shares to be issued. Which of the
following shares does a pre-emptive right of stockholders extends?

a. to shares to be issued in compliance with laws requiring stock offerings or minimum stock ownership
by the public
b. to shares to be issued in good faith with the approval of stockholders representing 2/3 of the
outstanding capital stock in exchange for property needed for corporate purposes
c. to shares to be issued in good faith with the approval of the stockholders representing 2/3 of the
outstanding capital stock in payment of previously contracted debt
d. treasury shares reacquired using the funds from the surplus profits of the corporation which could
have been declared as dividends

9.) The following instances are considered as indicators that a foreign corporation is transacting
business in the Philippines, even without securing a license, except

a. Soliciting orders, purchases and service contracts
b. Subscribing shares of stock from a domestic corporation
c. Engaging into continuous business acts or transactions
d. Participating in the management, supervision or control of any domestic business firm, entity or
corporation in the Philippines

10.) Which among the following is not a necessary result or consequence when a foreign corporation
secures a license and/or registers?

A. the foreign corporation can do regular business in the Philippines
B. the foreign corporation can avail the aid of the Philippine courts and sue
C. the foreign corporation may be sued in any regular court for any valid cause of action recognized
under Philippine laws.
D. the foreign corporation can intervene in any action, suit or proceeding in any court or administrative
agency

11.)Assuming all the other requisites of negotiability are present, which of the following instruments is
NOT payable to bearer?

a. "Pay to the order of Cash."
b "Pay to the order of Jose Rizal, national hero."
c. "Pay to Pedro Padernal, bearer."
d. "Pay to Pedro Padernal or bearer."

12.) Unless the by-laws provide otherwise, written notice of regular meetings shall be sent to all stock
holders of record:

a. at least one day prior to the meeting
b. at least two days prior to the meeting
c. at least one week prior to the meeting
d. at least two weeks prior to the meeting

Answers: 1.) c 2.) c 3.) a 4.) c 5.) d 6.) d 7.) b 8.) d 9.) b 10.) b 11.) c 12.) d