Ho2 BLT 2019

ICCT Colleges Foundation Inc.
V.V Soliven Ave. II, Cainta, Rizal
ACCOUNTING INTEGRATION PART 3
BLT MODULE RBR BACAY, CPA, MBA

SALES
1. Which of the following is not a characteristic of sale?

a. Bilateral
b. Gratuitous
c. Consensual
d. Nominate
2. A characteristic of a Contract of Sale which involves exchange of value

a. Commutative
b. Nominate
c. Bilateral
d. Consensual
3. Dacion en Pago as distinguished from sale

a. The object is always existing and specific.
b. There is greater freedom in fixing the price.
c. There is no pre-existing obligation.
d. The cause is the price.
4. Sale is distinguished from dation in payment in that is a sale:

a. There is a pre-existing obligation or credit.
b. The cause is a price.
c. It is a mode of existing an obligation in the form of payment.
d. Answer is not given.
5. Ababao and Bancaso entered into a “ Contract to sell “ in private writing involving a specific parcel of land worth P2M.
Bancaso paid 50% of the purchase price, balance payable in 3 years. Ababao delivered the land to Bancaso. What is the
effect of the delivery of tha land to bancaso?
a. Bancaso is the owner because there was delivery already.
b. Bancaso can compel Ababao to execute a deed of sale in public instrument.
c. The partial payment made Bancaso the owner of the land.
d. Ababao is still the owner because the price is not yet totally paid.
6. Which is an exception? A sale is a contract where one of the contracting parties, called the seller (or vendor), Obligates
himself:
a. The transfer ownership of the object.
b. The deliver a determinate thing.
c. To warrant against eviction and hidden defects.
d. To pay therefor a price certain in money or its equivalent.
7. Mimmodto entered the Sugbo Restaurant and ordered a dozen fresh oyster in their shell. While eating, Mimmodto noticed an
almost perfect pearl in one of the shells. He is about to take it when Maliksi, the restaurant owner, claims the pearl. To whom
does the pearl belong?
a. To Mimmodto because the contract of sale was already perfected.
b. To Maliksi, because Mimodto has not yet paid the food he ordered.
c. To the state because the pearl is considered as a national treasure.
d. To both Mimdoto and Maliksi, each of them being entitled to half of its price.
8. Silva sold to Bien a land, which os owned by Canuto. Is the sale valid?
a. No, because Silva does nt have the right to sells things which he does not own.
b. No, he should first acquire the title legally from Canuto before he can sell it to Bien.
c. Yes, it is sufficient that he be the owner at the time he is to deliver the object.
d. Yes, it is valid until annulled.
9. Which of the following may not be object of a contract of sale?

a. Things having potential existence.
b. The sale of vain hope or expectancy.
c. Future goods.
d. Answers not given
10. There is not be a valid object of sale

a. Future wool that shall grow upon a sheep.
b. Sale of human flesh for human pleasure.
c. The entire rental next month in a 4-door apartment.
d. Sale of a lotto ticket that will be drawn next week.
11. If the seller is not the owner, the sale is null and void. Which is not an exception?
a. When the sale of the goods is by his conduct precluded from denying the seller’s authority.
b. Where the goods were sold in a merchant’s store, or in fairs, or markets.
c. When the seller subsequently acquires title.
d. When the buyer acquires the property without knowledge of the bad faith of the seller.
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12. Mr. Marcial Bonifacio orders of his workers 1,000 pieces of t-shirts ranging in size from small to large from the Magellan
Garments Mfg. Corp. The specified sizes, although not then available, are manufactured by said corporation and consigned to
it sales outlets regularly. The contract entered into by Mr. Bonifacio with the Magellan Garments Mfg, Corp is an
a. Contract for a piece of work.
b. Contract subject to resolutory condition.
c. A contract of sale.
d. Answers not given.
13. Aldaba delivers to Baduria a photocopying machine worth P 50,000 and cash amounting to P 50,000. The contract is a –
a. Sale
b. Barter
c. Partly barter and partly sale
d. Innominate
14. Abion sold the Bagamasbad a piece of jewelry at a price of P 20,000. The contract provides that the Bagamasbad will give the
Abion a microwave oven worth P 5,000. What is the nature of the contract?
a. Sale
b. Partly sale partly barter
c. Barter
d. Commodatum
15. Connie transferred to Violeta a parcel of land for a price of P 100,000; P 30,000 to be paid in cash and for the difference, she
will convey her car worth P 70,000. What kind of contract is this?
a. Lease contract
b. Contract of sale
c. Obligation of sale
d. Barter
16. Shaolo and to Balo his land worth P 2,000,000 for P 1,500,000 only, thus resulting to inadequate price. The sale is:
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
17. Sawana offered his car to Bacopa with understanding that the price shall be at the descrition of Bacopa. As agreed upon,
Bacopa fixed the price at P 350,000 although its fair market value was P 250,000 only. It is clear therefore that the price fixed
is beneficial to Sawana. Before acceptance of the price by Sawana, is there already a sale?
a. No perfected sale as there was no consent on the price.
b. There was a perfected sale, the amount was already fixed by the buyer and will surely be accepted by the seller.
c. Yes because the fixing of the price by Bacopa is properly authorized by Sawana.
d. Yes but it is voidable due to mistake committed by Bacopa in the fixing of the price.
18. Solera sold and delivered her diamond ring to Ballesteros. It was agreed upon that within 10 days Ballesteros will state and fix
the price. On the 10th day, Ballesteros called upon by telephone Solera and stated the price at P 20,000 while Solera agreed.
Is the sale perfected?
a. No, at the time of sale the price was not fixed.
b. Yes, at the time of the sale the price was already known.
c. Yes, the price as stated and fixed by the buyer was accepted by the seller.
d. No, the price was left to the discretion of one of the parties.
19. Sotto sells to Buena his 1988 Cougar car, and leaves Buena to determine the price. Buena refuses to fix the price but took the
car for his use. Which of the following statements is correct?
a. No sale because the price is not fixed by the parties.
b. There is a sale, Buena must pay a reasonable price.
c. No sale until a third person fixed the price.
d. Sotto may go to a court and ask for damages.
20. A case where a contract of sale must not necessarily be in writing

a. Sale of 100 piculs of sugar at P 400 per picul when there is partial delivery.
b. Sale where by its term cannot be performed within one year from the making thereof.
c. Sale of land.
d. Sale of public auction.
21. Which is not correct? In a sale by auction

a. The auctioneer may withdraw the goods before the hammer falls whether or not the auction has been announced to be
without recourse.
b. The sale is perfected when auctioneer announces its perfection by the fall of the hammer.
c. The seller may bid provided such right was reserved and noticed was given to the other bidders.
d. Every bidding is merely an offer, and therefore before is it accepted, it may be withdrawn,
22. Which of the following statement is incorrect?

a. In a contract of sale the full payment of the price is in the nature of suspensive condition in that the seller is obligated to
transfer ownership of the things sold.
b. The seller need not be the owner of the thing sold at the perfection of the sale.
c. There may be a transfer of ownership over the thing even if the seller has not actually delivered the thing sold to the
buyer.
d. In a contract of sale the buyer becomes the owner of the thing sold upon full payment of the purchase price.
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23. Secillo offered to sell to Buensalida his 5-door apartment house in Cubao, Quezon City for P 3 Million. Buensalida agreed to
buy but requested to give him 20 days to raise the money. After two weeks, Buensalida informed Secillo that he has raised the
money. However, Buensalida informed him the he is no longer interested to sell the property. Can Buensalida compel Secillo
to sell the property.
a. Yes, because there was a mutual promise to buy and sell a determinate thing.
b. Yes, because Buensalida was able to raise money within the agreed period.
c. No, because the contract of sale has not yet been perfected.
d. No, because there was only an accepted unilateral promise to sell.
24. Singalong sold his land to Barganza for P 500,000, who paid SIngalong the price in fake 500 pieces of P 1,000 bill. What is the
status of the contract of sale?
a. Voide because the consideration is fake.
b. Voidable because of the presence of consideration except that it is fake.
c. Void because the cause is false.
d. Valid because it has a consideration although it is fake.
25. Barayoga sold his motorcycle to Narcisa. No date was fixed for the performance of their respective obligations. The obligation
of Barayoga is:
a. To wait for Narcisa to pay the price before he delivers the motorcycle.
b. To deliver the motorcycle after Narcisa demands delivery.
c. To rescind the contract because the time of performance is not fixed.
d. To deliver the motorcycle as soon as possible because the sale has been purchased.
26. Which of the following obligations of the vendor cannot be waived?

a. To allow the buyer to examine the goods sold.
b. To transfer the ownership to the buyer.
c. To pay the expenses of the deed of sale.
d. To warrant the thing sold.
27. Halk, a taekwando champion, with the intimidation forced his wife Matatakutin to sell to him Matatakutin’s properties worth P
300,000. The sale is
a. Unenforceable, unless the sale was made in writing.
b. Voidable, because the consent of MAtatakutin is vitiated.
c. Rescissible, if Matatakutin suffered a lesion of more than ¼ of the value of the property.
d. Void, except when the separation of property was agreed upon in the marriage settlement or there has been a judicial
separation of property.
28. Which of the following is considered s an actual delivery?

a. Execution and signing of the deed of sale.
b. Delivery by the vendor of the key of the warehouse where the goods are stored.
c. Placing the title of the ownership in the hands of the buyer.
d. The goods sold are placed in the control and possession of the vendee.
29. Which of the following is not constructive delivery in sale?

a. Tradition brevi manu
b. Tradition constitutum possessorium
c. Thing is place in the control and possession of buyer.
d. Execution of public document.
30. Lucky is a lessee of a store in a shopping mall. She orally sells/ assigns his right to Samonte. She then allows Samonte to
occupy the staff. The delivery here is called
a. Quasi-traditio
b. Actual delivery
c. Tradition longa manu
d. Tradition brevi manu
31. When the delivery takes place by the mere consent of contracting parties as when the vendor merely points to the thing sold
which shall thereafter be at the control and disposal of the vendee if the thing sold cannot be transferred to the possession of
the vendee at the time of sale, delivery is effected:
a. By tradition symbolica
b. By tradition longa manu
c. By tradition brevi manu
32. Alay-ay sold his house to Bibingka but continued to posses it as a lessee of the purchaser.
a. Traditio longa manu
b. Quasi-traditio
c. Tradition constitutum possessorium
d. Tradition brevi manu
33. Which of the following options is not correct? If Selerio delivered to Bayeran a television “ on sale or return “
a. The ownership is transferred to Bayeran upon actual delivery.
b. Bayeran can return the goods even if he finds nothing wrong with its quality.
c. The goods are transferred to the buyer upon constructive or actual delivery of the thing.
d. The ownership is retained by the seller.
34. Asantalicio delivered a television to Barberian on “sale or return “. In this case, the ownership passes to Barberian upon
a. Delivery of the television
b. Expiration of the period agreed upon
c. Acceptance by Barberian of Asantalicio’s offer.
d. Perfection of the sale
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35. Ownership of the thing sold is transferred / acquired / retained:
a. Retained by the “ sale or return “
b. Transferred to the buyer upon constructive or actual delivery of the thing sold.
c. Acquired by the buyer upon perfection of the contract.
d. Transferred to the buyer upon acceptance of the price.
36. Selerio sold to Bayer his Toyota Innova Car on January 10. On January 15, an absolute deed of sale was executed and
notarized. On January 20, the sale was registered with the Land Transportation Office (LTO). On January 25, bayer took
actual possession of the car. When did Bayer acquire title of the car?
a. On January 10
b. On January 15
c. On January 20
d. On January 25
37. On January 7, 2008, Ariel sells and delivers to Barabara his car for P 200,000 on a “ sale or return within 10 days “ after
delivery. On January 15, 2008, the car was lost through a fortuitous event. Who bears the loss?
a. Ariel under the principle of “ res perit domino “
b. Barabara and she must pay the purchase price.
c. Both Ariel and Barabara jointly.
d. Neither of them because the loss was due to a fortuitous event.
38. Salvora delivered a computer set Perper “ on approval, on trial ot no satisfaction “ the ownership passes to Perper upon
a. Delivery of the things.
b. Meeting of the minds
c. Conception of the sale
d. The return of the things to Salvora.
39. Statement 2: in a sale on return, ownership passes to the vendee upon the delivery of the goods; in sale or trial, ownership
does not pass to the buyer until he accepts the goods.
Statement 1: in sale or return, the risk of the loss is on the vendor; in sale or trial, the risk of loss is on the vendee
a. Both statements are true

b. Statement 1 is true, statement 2 is false
c. Both statement is false
d. Statement 1 is false, statement 2 is true
40. The Recto Law is applicable on:

a. Sale of car on a straight term
b. Sale of house on instalment were the buyer constituted mortgage on the house.
c. Sale of car on instalment were the buyer constituted a mortgage on his truck
d. None of the above.
41. Ara bought a washing machine from Bal on instalment basis but defaulted in the payment of two instalments. Which of the
following is not a remedy of Ara?
a. Damages
b. Specific performance only
c. Cancel of sale
d. Foreclose the chattel mortgage and recover from the buyer the difference if the proceeds of the sale is less than the
unpaid balance of the purchase price.
42. Statement 1: in a sale of personal property in instalment, the seller is obliged to exercise the remedy of the foreclosure of the
chattel mortgage, if there be one, in the event that the buyer fails to pay two or more instalments.
Statement 2: in a sale of personal property in instalment, if the seller decided to foreclose but did not actually sell the property,
he may still ask for specific performance and demand for the remaining deficiency in the price
a. True, False
b. True, True
c. False, True
d. False, False
43. Bag bought a refrigerator on Instalment from Sum and to secure his indebtedness, Bag executed a chattel mortgage on title
refrigerator in favour of Sum. Upon default by Bag on his two (2) payments, the refrigerator was foreclosed and sold for P
8,000 which was less than the balance of P 10,000 due to Sum. How much can Sum still collect from Bag?
a. P 2,000
b. P 8,000
c. P 10,000
d. Nothing
44. One of the following is not an alternative remedy available to a seller of personal property on instalment if buyer defaults.
a. To go to court and ask court to order delivery of the property.
b. To foreclose the chattel mortgage
c. To sue to specific performance
d. To take possession of the property and forfeit the amount paid by the buyer.
45. Sad sold to Bad a motor vehicle for P 1.2M to be paid in twelve equal monthly instalments starting the 15 th of February, 2008.
To secure the payment of the car, Bad executed a chattel mortgage on the subject motor vehicle and furnished a surely bond
issued by Contreras. Bad failed to pay two instalments. Sad went after Contreras but was not able to obtain only ¾ the total
amount still due from Bad. Can Sad still collect the deficiency from Bad?
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a. Sad can still recover the deficiency from Bad because the amount received from the surely was only payment pro-tanto of
the obligation.
b. Sad can still foreclose the chattel mortgage on the car for the deficiency.
c. Sad cannot recover the deficiency anymore applying the Recto Law, that is, Sad can maintain an action for the deficiency.
d. Sad can still recover the deficiency after he forecloses the chattel mortgage on the vehicle.
46. Which of the following statement is false:

a. In contract to sell, ownership is not transferred to the buyer even if there is a delivery.
b. Stoppage in transitu can be exercised by the unpaid seller if the buyer is insolvent and the vendor has not yet parted with
the thing sold.
c. The price is considered certain if it is reference to another thing certain.
d. In a right to resell it is not necessary that the original buyer is insolvent.
47. Anthony sold a piece of land to Rolando binding himself not to sell the same to another person. On the following day, Anthony
sold the land to Carl who immediately took possession in good faith. In the case at bar, the proper remedy of Rolando is to:
a. Institute an action for the annulment of the sale to Carl.
b. Institute an action for the recovery of the land.
c. Institute an action for damages against Anthony.
48. Statement 1: if the thing should have been sold to different buyers, the ownership should be transferred to the person whom
may have been in the possession thereof in good faith; if it should be movable property.
Statement 2: the seller is responsible to the buyer for any hidden defects or fault in the thing sold only if he was aware thereof.
a. 1st statement true, 2nd statement false

b. Both statements are false.
c. 1st statement false, 2nd statement true
d. Both statements are true.
49. Salay, the owner of a parcel of land sold the same to Basco, a buyer in good faith but the document was not registered. One
year, he sold it again to Bal who knew of the first dale but registered the document and obtained a title over the land.
a. Basco is not entitled to the land even if he is a buyer in good faith.
b. Basco is the rightful owner because the bad faith of Bal renders nothing but an exercise in futility.
c. Bal being the first registrant is the rightful owner of the land.
d. The knowledge of the first sale by Bal is immaterial because the non-action of Basco plus him in estoppels.
50. Sala sold his land to Bata who began to possess it. Later Caw, a tranger, sold the same land to Dau who in good faith
registered the sale in the Registry of Deeds. Who should be considered as the owner?
a. Sala because the sale is not registered by Bata.
b. Bata because Dau did not buy it from the owner of the land.
c. Caw because the sale to Dau is a second sale.
d. Dau being the registrant in good faith.
51. Seoul sold a land to Busan. Then, Seoul became Busan’s tenant. Subsequently, Seoul sold the same property to Gangnam.
Neither sale was registered. Who is the rightful owner?
a. Busan being the first buyer in good faith.
b. Gangnam because the property was sold to him ny the original owner.
c. Seoul because the sale to Busan and Gangnam are not registered in the Registry of Deeds.
d. Busan if he will register the sale ahead of Gangnam.
52. Soreta sold his land to Biares. Later, Soreta sold the same land to Baduy. Biares in turn sold the same land to Bastos, who
took possession of the land in good faith. Baduy, a purchaser in good faith, registered the sale in his favour. Decide:
a. Biares is the owner of the land because he was the first buyer.
b. Biares is the owner of the land having registered the sale in good faith.
c. Bastos is the owner of the land being the transferee of the rights of Biares and who is in possession in good faith.
d. Bastos is the owner because after Soreta sold the land to Biares,Soreta had not more right to transfer ownership to
Baduy, the second buyer.
53. Crystal is the owner of an earring which was stolen by her housemaid. In one social gathering, she saw the earrings in the
possession of Fatutina. It was discovered that the housemaid sold it in a jewelry store which in turn sold it to Fatutina, a buyer
in good faith. Did the latter acquire good title to the jewelry?
a. Yes, because it was bought from a merchant’s store in good faith and in value.
b. No, because Fatutina did not exercise diligence is buying the earring.
c. No, because it was sold by a store which does not possesses authority to sell it.
d. Yes, because the seller is also a buyer in good faith.
54. S store a fountain pen from “O” and sold it to a bazaar who pays for it in good faith, not knowing it was stolen. The bazaar then
sold it to B, a student,
a. The bazaar having bought it in good faith becomes the legal owner, and as such, he can transfer ownership to B.
b. Ownership passed to B because he bought it in a merchant store.
c. “O” may recover the fountain pen from B without reimbursement because he is the legal owner.
d. B cannot become the owner because S, the original seller, is not the owner.
55. Gwen brought is wristwatch in a watch repair shop and store for repair. After it was repaired, the watch repair shop and store
sold it to Mommy Mi, a buyer in good faith. Can Gwen recover the wristwatch from Mommy Mi?
a. No, because Mommy Mi is now the lawful owner of the watch.
b. No, because Mommy M brought it in good faith and for value.
c. Yes, because the seller was not authorized by Gwen to sell his watch.
d. Yes, provided he would reimburse Mommy Mi the amount she have paid to the merchant’s store.
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56. Sayangco sold a residential land to Bitao. Bitao paid the consideration. When Bitao wanted to register the sale at the Register
of Deeds, the latter refused to register it and required the presentation of the certificate of capital gains tax payment. What can
Bitao do?
a. Bitao may sue Sayangco to refund the consideration paid by bitao under the maxim “no one shall enrich himself at the
expense of another“.
b. Bitao cannot compel Sayangco to return the selling price because the contract is not enforceable.
c. Bitao may possess the residential land as a buyer in good faith.
d. Bitao may compel Sayangco to pay the capital gains tax and secure the Certificate of Capital Gains Tax payment.
57. Warranty against hidden defect is:

a. An essential element.
b. Accidental element
c. Natural element
58. The following, except one, are the alternative remedies available to the buyer in case of breach of warranty by the seller.
a. Keep the goods and ask for the damages.
b. Refuse to accept the goods and ask for damages.
c. Rescind the sale and retain the goods.
d. Keep the goods and set up against the seller by way of recoupment in price.
59. Serdan sold a racing horse to Bruno on February 14, 2008. After five days, the horse suffered an illness and died after one
week. Can Bruno sue Serdan for breach of warranty against hidden defects?
a. Yes, because it is presumed that the horse was already ill when sold.
b. No, because Serdan was not arware of the disease at the time of sale.
c. Yes, because Serdan is in bad faith.
d. No because the disease did not exist at the time of purchase.
60. In three of the following there is no warranty against hidden defects of animals. Which is the exception?
a. Animals sold at fairs.
b. Livestock sold as condemned, declared known to the buyer.
c. Animals sold at public auction.
61. The vendor is responsible to the vendee for any hidden faults or defects in the thing sold, even though he was not aware
thereof.
If the thing sold had any hidden fault at the time of the sale, and should thereafter be lost by a fortuitous event, the latter may
demand of the vendor the price which he paid, lee the value which the thing had when it was lost.
a. True, False
b. True, True
c. False, True
d. False, False
62. Seesy sold to Batok his dog without knowledge that the animal was suffering from a disease at the time of the sale. Is the
seller liable for breach of warranty against redhibitory defect of animals?
a. Yes, because he sold have known the defect before selling it to somebody.
b. Yes, if he aware of the hidden fault or defects.
c. No, because redhibitory defect is difficult to discover even in case of professional inspection.
d. No, if there was a stipulation and the seller was in good faith when he sold the animals.
63. One of the following is not a remedy granted to an unpaid seller.

a. Right of stoppage of goods in transit.
b. Right of lien owner the goods.
c. Right of resale.
d. Right to demand a security for the payment of the price.
64. The buyer has a right to the fruit of the thing from the time
a. Thing is delivered
b. Contract is perfected
c. Obligation to deliver the thing arises
d. Fruits are delivered
65. Which of the following statement is not correct?

a. The vendor is bound to deliver the thing sold and its accessions and accessories in the condition in whic they were upon
the perfection of the contract.
b. All the fruits of the thing sold shall pertain to the vendor from the day on which the contract was perfected.
c. The vendor shall not be bound to deliver the thing sold, if the vendee does not paid him the price, or if no period for the
payment has been fixed in the contract.
d. The vendor is bound to transfer the ownership of and deliver, as well as warrant the thing which is the object of the sale.
66. Salcedo sold his horse to Caballo for P 15,000. No payment has ben made and no date of delivery was agreed upon. Before
the payment and delivery, the horse gave birth to a pony.
a. Caballo should pay additional amount for the pony if he wants to have it.
b. Caballo is entitled to the pony which was born after the perfection of the sale but before the delivery.
c. Salcedo is entitled to the pony since Caballo has not yet paid the price.
d. Salcedo is entitled to the pony because it was born before his obligation to deliver to horse.
67. Salamanca sold a pig to Bardagol. It was agreed upon that the payment will be made one month after delivery. After delivery
but before payment of the price, the pig delivered ten piglets.
a. Bardagol is entitled to the piglets because there was already a delivery.
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b. Bardagol should pay the price of the piglets if he wants to have them.
c. The piglets should be with Bardagol applying the rule that “accessory follows the principal” but he should pay Salamanca
of its value as an application of the same principle.
d. Salamanca is entitled to the piglets due to the nonpayment of the purchase price.
68. On jJanuary 6, 2008, Pepe sold to Pilar his dog named Tagpi with the agreement that delivery shall be on January 15, 2008
and the payment of the rpice will be on January 31, 2008. If the dog shall produce offspring, it shall belong to:
a. If before January 6, 2008 it shall pertain to the seller.
b. If the puppy, Tagpi Jr. Shall be born on January 10, 2008 it shall still pertain to the seller.
c. Pilar shall only be entitled to Tagpi Jr. If the puppy is born on January 20, 2008.
d. If Tagpi Jr. Is born after the sale but before the delivery, it shall pertain to Pilar if so stipulated by the parties.
69. Sebastian sold an automobile to Berdi for P300,000 payable as follows: P100,000 upon delivery of the car, and the balance at
an amount of P50,000 every month thereafter. The automobile, however was burned in the possession of Berdi, without his
fault, before payment of the balance. Is Berdi obliged to pay the balance?
a. Yes, because the ownership was transmitted to him upon delivery.
b. Yes, but Sebastian should deliver another automobile to Berdi.
c. No, because the balance is not yet paid and therefore Sebastian is still the owner of the automobile.
d. No, the loss is imputable to Sebastian applying the principle of res perit domino.
70. Aden sold his only car to Bisco. After the contract was perfected but before the delivery, the car was destroyed by a tsunami. It
was totally wrecked. Should Aden deliver a car similar to his?
a. Yes, because the buyer should not be liable for a fortuitous event.
b. Yes, otherwise Bisco will be prejudiced of not receiving the return of his payment.
c. No, because the object is determinate.
d. No, even when the seller is guilty of delay in the delivery of the car.
71. Sotero and Balbak entered into a contract whereby Sotero will sell his computer to Balbak for P20,000. After the perfection of
the contrac, Balbak advanced the entire purchase price but it was stipulated that the computer shall delivered at the end of
June of the current year. Before the arrival of the date, it was completely destroyed without any fault of Sotero. Can Balbak
recover the P20,000?
a. No, when a thing is lost without fault of the vendor, he is released from his obligation to deliver the thing.
b. No, because the contract had already been perfected.
c. Yes, under the principle of res perit domino
d. Yes, but the buyer must also bear the loss. Hence, he can recover P10,000 only.
72. Salando sold to Baybayin his can which is undergoing body repair at a car repair shop owned by Celaje. No fixed date for the
performance of their respective obligations. The obligation of Baybayin is:
a. To pay the moment Salando delivers the car.
b. To pay upon demand by Salando.
c. To pay the price immediately because their obligations are demandable at once being pure obligation.
d. To rescind the sale because there was no agreement as to when their obligations shall be performed.
73. 1st Statement: the vendor is bound to transfer the ownership of and deliver as well as warrant the thing which is the object of
the sale.
2nd Statement: payment of price is essential to delivery of the thing sold.

a. Both statements are true.
b. Both statements are false
c. 1st Statement is True, 2nd is False
d. 1st statement is False, 2nd is True
74. Which of the following statements is not correct?

a. Actual delivery of the thing or payment of the price is not required for the perfection of the sale.
b. A stipulation that even when the object is delivered to the buyer, ownership will not pass until the price is fully paid is not
valid.
c. A sale is consummated upon delivery of the thing and the payment of the purchase price.
d. Sales through letters or telegrams are deemed perfected only when the seller has received acceptance by the buyer.
75. Balas buys from Salas 100 cavans of palay. Which of the following statements is not correct?
a. If Salas delivers only 90 cavans he can accept them provided that he can only be required to pay for the number of
cavans delivered.
b. If Salas delivers only 90 cavans, he must accept them because it is part of the quantity contracted.
c. If Salas delivers 120 cavans, Balas can reject all.
d. If Salas delivers 120 cavans, he may accept all, but he must pay for them at the contract rate.
76. S sold to B a parcel of land for a lump sum of P50,000. The contract states that the area is 500 square meters. Subsequently,
it was ascertained that the areas included within the boundaries is actually 550 square meters.
a. S is bound to deliver 500 square meters and B to pay P50,000
b. S is bound to deliver 500 square meters and B to pay P55,000
c. S or B can rescind the sale because there is no meeting of minds.
77. In Question 76. If the land is contains 445 square meters only. Which of the following is correct?
a. S is bound to deliver 500 square meters and B to pay P50,000
b. S is bound to deliver 445 square meters and B to pay P44,500
c. B may rescind the sale because the lack in area is more than 1/10 of the total area.
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78. Salinel sold to Bobos, per unit of measure, a parcel of Riceland measuring 2,000 square meters at a price of P500 per square
meter. Subsequently it was ascertained that the area is not measuring 2,000 square meters. Which ofo the following remedies
is available to Bobos?
a. Ask for rescission if the area is lacking by 1/10th or more of that stated.
b. Ask for rescission if the area is 1,000 square meters only.
c. Be required to pay an amount corresponding to 2,000 square meters even if the area is 1,900 square meters only.
d. Require Salinel to accept an amount corresponding to 2,000 square meters even if the area is 2,100 square meters.
79. The following options are available to the buyer of real estate at the rate of a certain per unit of measure, except:
a. Proportionate reduction in the price if the lack in the area is less than 1/10;
b. Rescission of sale if the lack in the area is not less than 1/10;
c. If the area is more than stated in the contract, accept the area stated in and reject the rest;
d. Rescind the contract if the area is more than that stated in the contract.
80. Bolabong bought from Senyang a second hand motorcycle which upon inspection by Bolabog had some patent mechanical
troubles. After the sale, the motorcycle was bumped on another vehicle due to defective brakes creating damages to the
motorcycle ad on the other vehicle. Is Senyang liable fro breach of warranty against hidden defect?
a. No, because the defect was not hidden but apparent upon inspection by Bolabog it being a seconh hand car.
b. Yes, because there was no waiver of warranty against hidden defect.
c. Yes, because the seller was in bad faith and she has to pay for the damage done on the other vehicle.
d. No, because it was fault of Bolabog, he should have bought a brand-new motorcycle.
81. Segunda sold his car to Bakekang. No agreement was made on the time and place of delivery and payment, hence:
a. The time and place of delivery shall be at the time and place of payment of the price.
b. The time and place of delivery and payment not having been agreed upon, the sale shall be void.
c. The seller may demand payment first before delivery of the thing sold.
d. The buyer may demand delivery first before payment of the price.
82. X sold a parcel of land to Y with the agreement that the payment is to be made on Feb. 14, 2009. It was stipulated that failure
to pay on said date. The sale would automatically be rescinded. Y failed to pay and asked for extension of the time pay.
Decide:
a. Y may still pay and the sale is not rescinded id there was no demand yet for rescission from X.
b. The sale is rescinded as per agreement.
c. The sale is rescinded only after demand fro payment by the seller.
d. Y may still pay despite rescission of the sale.
83. Pacto de retro sale is distinguished from mortgage:

a. There is redemption when the principal debt is paid.
b. There is no transfer of possession of the thing sold.
c. There is no foreclosure unless it is declared as an equitable mortgage.
d. There is no transfer of ownership of the thing sold.
84. A stipulation exempting the vendor from the obligation to answer for eviction shall be void even if he acted in good faith.
The vendor is not liable for dispossession due to acts imputable to the buyer himself.
a. True, False
b. True, True
c. False, True
d. False, False
85. The sale shall not be presumed to be an equitable mortgage when?

a. The price of the sale is usually adequate.
b. The vendor remains in possession of the thing sold.
c. The vendor allows the extension of time to repurchase the thing sold.
d. The purchaser retains for himself a part of the purchase price.
86. The vendor is responsible to the vendee for any hidden faults or defects in the thing sold, even though he was not aware
thereof.
When the price of a sale which right to repurchase is unusually inadequate, the contract shall be presumed to be a pacto de
retro.
a. True, True
b. True, false
c. False, False
d. False, True
87. Where it is stipulated that the repurchase of the property sold could be made at any time, the repurchase shall be exercised
a. Within four years from the date of contract.
b. Within ten years from the date of the contract.
c. After ten years from the date of the contract.
d. None of them
88. Where it is stipulated that the repurchase of the property sold could be made at any time, the repurchase shall be exercised
a. Within four years from the date of contract.
b. Within ten years from the date of the contract.
c. After ten years from the date of the contract.
d. Within six years from the date of the contract.
89. Sall sold his land to Bay on March 15, 2008 with a right to repurchase. The contract provides that the land will be redeemed in
March of any year. Until when Sall can repurchase the property?
a. March 15, 2012
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b. March 15, 2018
c. March 15, 2009
d. March 15, 2011
90. If redemption is made, which of the following will not be paid by the seller to the buyer?
a. Price paid by the buyer
b. Expenses in the execution of the sales of contract paid by the buyer.
c. All necessary expenses on the thing sold and to be redeemed.
d. Interest on the price paid by the buyer.
91. Abagat, Barra and Caballero, are co-owners of an undivided parcel of land. Barra sold his 1/3 interedt to Caballero absolutely.
Which is correct?
a. Abagat may exercise his right of redemption on the interest sold by Barra to Caballero.
b. Abagat cannot exercise the right of redemption because the sale was made in favour of a co-owner.
c. The sale made by Barra to Caballero is void because it was not made in favour of a stranger.
d. Abagat may redeem only ½ of the interest sold by Barra to Caballero.
92. Arines, Babagay and Casyao are co-owners in equal share of parcel of land. Casyao sold his undivided interest to his son.
Dava, a week later, Arines and Babagay served notice on Dava of their intention to redemme the portion sold. However, Dava
refused to allow redemption arguing thet being the son of Casyao, he was not a third person in contemplation of the law with
respect to redemption by co-owners. Is the refusal of Dava justified?
a. No, the refusal of Dava is not justified because he is still a third person as regards redemption by co-owners.
b. No, because Dava’s refusal is unjustified because co-owners can redeem the share sold even if not sold to a third person
c. Yes, justified because he is not a third person being the heir of Casyao from whom he will eventually inherit the share in
the land.
d. No, because co-owners can redeem the share even if sold to a co-owner.
93. Abonal, Babol and Cortez as brothers purchased from their parents specific portions of a parcel of land as evidenced by three
separate deeds of sale. Each deed referring to a particular lot in meters and bounds. Abonal sold his parcel of land to De
Belen, Baboland Cortez want to redeem the land. Decide;
a. Both Babol and Cortez may exercise the right to redemption in a pacto de retro sale.
b. Either of Babol and Cortez mat do so if there is right of redemption given to them by De Belen.
c. Babol and Cortez have the right of legal redemption.
d. Babol and Cortez have no right of legal redemption.
94. Servino owns a piece of land and sells it to Sam with the right of repurchase within four (4) years from the date of sale. If Sam
sells the property to Rose, which of the following is false?
a. The sale is valid because things subject to a resolutory condition maybe the object of a contract of sale.
b. Servino can still exercise her right of redemption against Rose.
c. The sale is void because it is a conditional sale.
d. Rose acquires the property but subject to the right of conventional redemption.
95. Senso owns a piece of land and sells it to Bicad with a right or repurchase within one year from the date of sale. Can Bicad
sell the land he purchased from Senso to Burat, a third party?
a. Yes, provided that the sale is with the consent of Senso.
b. No, Bicad is not yet the absolute owner of the land.
c. Yes, but Sesno can still redeem the land from Burat.
d. No, third parties that acquire real property are bound by prior contracts affecting such property even if the third person is
not a party thereto.
96. Arnesto, Balane and Camposano are co-owners of a parcel of land. Arnesto sold his share to Balane. Can Camposano
redeem the said share from Balane?
a. No, unless he was notified of the sale prior to its perfection.
b. No, legal redemption applies only if the interest was alienated by onerous title to a third person.
c. Yes, because the law frowns upon co-ownership.
d. Yes, provided he pays Balane the price, expenses of the sale and necessary and useful expenseson the thing sold.
97. Ann and Boy are co-owners of a parcel of land. Dan owns a parcel of land adjoining the co-ownership. Ann sold his share to
Char. Both Boy and Dan want to redeem the share of Ann which is latter sold to Char.
a. Boy and Dan should equally redeem the share of Ann.
b. The right of Boy as co-owner is preferred over Dan who is only an adjoining owner.
c. Dn should be preferred over Boy in the redemption from Dan.
d. None of them acquires the right of redemption.
98. Which of the following is false about sale with a right to repurchase?
a. Legal redemption ca be effected only against immovable property.
b. There is transfer of ownership to the buyer subject to a resolutory condition.
c. If several persons, jointly and in the same contract, should sell an undivided immovable with a right to repurchase, none of
them may exercise this right for more than his respective share.
d. The buyer a retro may mortgage the property because he acquires the rights of the vendor.
99. Aki owns a parcel of land, which he sells to Bing with a three year redemption period. After the second year, Aki dies, leaving
his children Cave, Dave and Eve as his heirs. Which of the following is not correct?
a. As Aki can repurchase the whole thing, so any among Cave, Dave and Eve may repurchase the whole thing.
b. Cave can redeem his 1/3 share, Dave his 1/3 share and Eve his 1/3 share if Bing does not require all of them or any one
of them to redeem the whole property.
c. Bing may demand that all the co-heirs come to an agreement upon the repurchase of the whole thing sold.
d. Bing cannot be compelled to consent to a partial redemption.
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100. In 2008, Albia bound himself to sell to Bolalin his house and lot which was being rented by another person. If Bolalin passes
the CPA examination on October 2008. Luckily for Bolalin, he passed the said examination. However, Albia sold the said
property to Cord in 2008after the agreement was entered into by Albia and Bolalin. Was the sale valid?
a. The sale was not valid because the property was already sold by Albia to Bolalin although it was subject to a suspensive
condition.
b. The same was not valid if Cord was aware of the promise to sell of Albia to Bolalin.
c. It was a valid sale because Albia was still the owner of the house and lot at the time of the sale but with resolutory
condition.
d. It was a valid sale if the buyer was in good faith and for value and without the knowledge of the promise to sell of Albia to
Bolalin.
AGENCY
1. ALing ask his neighbour, Aze to buy some vegetables for her in the market to which request the latter agreed. The contract
between them is:
a. Sale
b. Piece of work
c. Agency
d. Contract to Sell
2. Which of the following is not a characteristic of an agency?

a. Principal
b. Nominate
c. Commutative
d. Gratuitous
3. Statement 1: a contract is needed to have an agency relationship

Statement 2: the agent owes a fiduciary duty to the principal
Statement 3: The principal owes a fiduciary duty to the agent
Which of the above statements is true?

a. Statement 1 only
b. Statement 2 only
c. Statement 3 only
d. Statements 2 and 3
4. Akbahar has been the agent of Pacifico for the past 3 years in the purchase of palayvin different provinces in Luzon. The
authority given by Pacifico to Akbahar provided that Akbahar need not render an accounting of his transactions. One day,
Akbahar chanced upon a wholesaler of palay who offered to sell them to Akbahar at the discounted price of P500 per sack.
Akbahar purchased all the palay using his own money and stored them in the warehouse. Every time that Pacifico needed
palay, Akbahar would get them from his stock and made it appear that he bought them from a supplier at the regular price of
P600, which was the same purchase price of palay in his earlier transactions.
a. Akbahar must account to Pacifico all the profits that he obtained from the transactions.
b. Akhbahar need not account to PAcifico the profits that he obtained from all the transactions.
c. Akbahar need not render an accounting of his transactions because he was not obligated to do so under the power of
attorney given to him by Pacifico.
d. Akbahar cannot be held liable for damages because he passed on the palay to Pacifico at the purchase price of his
previous transactions.
5. Lease of services is distinguished from agency except on the following.
a. The worker does not represent his employer.
b. The implementor exercises discretionary powers.
c. Generally, the relationship can be terminated only at the will of both parties.
d. It usually involves in two persons.
6. The following distinguished agency from a negotiorum gestio except

a. Quasi-contract
b. There is meeting of the minds expressly or impliedly
c. The legal relation is created by the parties.
d. One party performs according to the control of the other.
7. All of the following are characteristics of an agency to sell, except

a. Receives the goods as the goods of the principal.
b. The agents deliver the proceeds of the sale
c. Receives the goods as owner
d. The agent does not warrant the thing against hidden defects.
8. In agency, the agent represents

a. A person who is capacitated.
b. A person who is incapacitated.
c. Heirs and creditors of the estate or the debtor.
d. Judicial court
e. None of the above
9. Pandekoko gave a special power of attorney to Amay, a 13 year old high school student, authorizing the latte rto sell his car.
Amay sold the car for P150,000. Which of the following statement is false?
a. The contract of agency between Pandekoko and Amay is voidable.
b. The contract of sale between Pandekoko and Amay is valid.
c. The contract of sale between Pandekoko and Amay is unenforceable.
d. The guardion or parent of Amay can ask for the annulment of the contract of agency.
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10. Pal, 50 year old, appointed Ams, 16 years old. As his agent of sell to his necklace for P12,000. Thereafter, Ams sold the
necklace to Bara for tha said amount. When Pal learn that the contract price of the necklace is P20,000 he sought to annul the
sla eand brought an action to recover the necklace on the ground that the sale is voidable because Ams is minor. Is the action
of Pal justified?
a. Yes, because the agent is incapable of giving consent to the contract.
b. Yes, Bara took advantage of the minority of the agent.
c. No, because the contract is unenforceable the agent having exceeded his authority.
d. No, because Pal is capable of entering into a contract.
11. Pogi authorized Panget, a minor, to sell his car for P1M in cash. Panget sold the said Car to Ganda on instalment at a lesser
price of P900,000. Pogi is now repudiating the contract with Ganda on the ground that he is not bound since Ganda contracted
with the minor who exceeded his authority. Decide
a. Pogi is liable under the contract because it is enough that principal is capacitated since he is the one entering into the
contract.
b. Pogi is not liable for the sale on instalments since it is unenforceable because his agent acted beyond its powers.
c. Pogi is not liable because the agent is a minor with whom Ganda had contracted.
d. Pogi is liable provided the sale is in cash fro P1M.
12. Which of the following does not create an implied agency?

a. Failure to repudiate the agency by the principal.
b. Silence of the principal
c. Express authority given by the principal
d. Principal’s lack of action
13. Mar Cas, before going to London, appointed Jul Cas as his agent administer his properties in the Philippines. Afterwards, Jul
Cas wrote Mar Cas that he (Jul Cas) was withdrawing from the agency because of hailing health. Jul Cas, in the same letter,
said that he appointed Cas Cas as his substitute and that Mar Cas should extend new appointment to Cas Cas. Cas Cas took
over the duties of Jul Cas but Mar Cas did not bother to appoint Cas Cas ah his agent until Mar Cas death. Now, Mar Cas’
heirs bought an action against Cas Cas fro accounting. Cas Cas raised the defense that he was not validly constituted as
agent of Mar Cas. In the case at bar, defense is not tenable because there is
a. An actual agent
b. An implied agent
c. A general agent
d. Answer not given
14. The is not implied agency in the following

a. The principal delivers his power of attorney to the agent and the latter receives it without any objection.
b. The offeree writes a letter acknowledging the receipt of te offer, but offers no objection to the agency.
c. The offeree begins to act under the authority conferred upon him.
d. The offeree receives a letter of authority but did not reply nor acted within the scope of authority conferred upon him.
15. Pare sends a letter to Are in Cavite, authorizing Are to sell his specific car for P90,000. If no reply is made by Are, is there a
presumption of implied agency between two of them?
a. None, because as between persons who are absent, acceptance of the agency cannot be presumed from the silence of
the agent.
b. Yes, because no reply was sent; there is an implied acceptance or implied consent
c. Yes, unless Are habitually engaged in the business of selling and buying cars.
d. None, acceptance must always be expressed.
16. Parra sends a letter to Arro in Iriga City, authorizing Arro to sell his specific car for P300,000. No reply is made by Arro. Is
there a presumption of implied agency between the two?
a. Yes, unless evoked by Parra before accepted is made.
b. Yes, the failure to reply is an implied acceptance of implied consent.
c. O, if Arro is habitually engaged in the business of buying and selling of cars.
d. No, as between persons who are absent, acceptance by the agency cannot be presumed from the silence of the agent.
17. Panta, a resident of Ilocos Norte, wrote Ali, his friend in Bicol who is engaged in buying and selling second hand car, to sell
his(Panta) Toyota Corolla Car. Ali did not reply to the letter.
a. There is implied agency due to non-acceptance of the authority.
b. There is not implied agency because between persons who are absent, the acceptance of the agency cannot be implied
from the silence of the agent.
c. There is no implied agency until Ali starts to act under the authority conferred upon him.
d. An implied agency is created even without reply from Ali.
18. The following statements pertain to the appointment of an agent
I. If the announcement of appointment of an agent is by special information, the person appointed will be considered a
duly authorized agent with respect to the person who received the special information.
II. If the announcement of the appointment of an agent is made by public advertisement, such as publication in a
newspaper of general circulation, the person appointed will be considered as agent which regard to any person who
reads the publication.
In your evaluation of the foregoing statements:

b. Both statements are false
c. Only statement 1 is true
d. Only statement 2 is true
19. Ad Company wrote a letter to Better educational Supply which introduced Botoc as its newly authorized agent. Better
Educational Supply then dealt with the company thru Botoc. After six(6) months, the authority of Botoc was revoked without
informing the customer of the revocation. Better Educational Supply continued to deal with Botoc. Is Ad Company liable for the
act of Botoc?
a. Yes, but until the revocation of the agency only.
b. Yes, but effective only from the time the letter was received until the authority of the agent was revoked by the company.
c. Yes, even after the revocation for the customer was in good faith not having been informed by circular or otherwise of the
revocation.
d. No, the company was never become liable for the acts of Botoc.
20. Top of the Line Corporation published in the calssififed ads of the Philippine Daily Inquirer that Chua is its duly authorized
agent to sell its product in Southern Luzon. After 5 years, the corporation revoked the authority by giving notice of revocation
to Chua and publishing a notice of revocation in the Philippine Star. Despite the revocation, Chua was still able to sell goods
worth P60,000 to Diana who did not read the revocation. Should Top of the Line Corporation deliver the goods?
a. No, it is not obliged to deliver because Diana have known the revocation of Chua’s authority.
b. Yes, because Diana did not read the revocation of Chua’s authority.
c. Yes, because the revocation was not binding on Diana since it was published in a different newspaper.
d. No, because the notice of revocation to Chua is sufficient.
21. M Company wrote a circular letter to its customer introducing a certain A as its duly authorized agent. X, a customer, dealt or
transacted a business with A. Later, A’s authority was revoked and was published in a newspaper of generation circulation.
Notwithstanding his knowledge of such revocation, X continues to transact business with M Company thru A. Is M Company
still liable for the agent’s act even after revocation?
a. Yes, because the revocation was not given in the same way the power was gained.
b. No more, because the third person (X) is in bad faith.
c. No, more, because the transaction that will be entered after revocation will be void.
22. Pund met Ter and introduced Al as the agent of Pud. As a result, Ter dealt with Al. Is Pund liable for the acts of Al when as a
matter of fact, it is not true that Al is his agent?
a. Yes, for what is created here is an implied agency.
b. Yes, because Pund created an agency by estoppel.
c. No, because Al is not really an agent of Pund.
d. \no, because neither an implied agency nor an agency by estoppels has been created among the parties.
23. Pal, a Filipino citizen called his brother, Ar, by phone, authorizing the latter to sell his 5—hectare Riceland located in Nueve
Ecija. On the strength of such authority, Ar sold the land belonging to his brother. Is the sale valid?
a. Yes, because the sale has been authorized by Pal, the owner of the land.
b. Yes, if the sales instrument is reduced in writing.
c. No, because the authority to sell must be reduced in writing.
d. No, because the authority to sell must be in a public instrument.
24. A appoints B as his agent to sell his land. Which of the following is perfectly valid?
a. The authority of B is in writing and the sale of the land n favour of C is oral.
b. The authority of B from A is by way of letter and B sells the land to C in writing.
c. The authority of B is oral and B sells the land to C for P50,000 in a written contract of sale.
d. The authority of B is in writing but the sale of the land in writing was made beyond the period expressly set forth by A.
25. A appoints B to sell his land.
Example 1 – if the authority of B is oral and B sells the land in writing, the sale is valid.
Example 2 – if the authority of B is in writing and B sells the land orally, the sale is valid.
Which is correct?
a. 1st example is false but 2nd example is true.
b. Both examples are true.
c. Both examples are false.
d. 1st example is true but the 2nd example is false.
26. Pan wrote his friend. Ali to sell his land in Zamboanga City. This land was purchased by Bal, a third person.. Ali did not remit
the money. Pan now wants to recover the land from Bal.
a. Pan cannot recover because an agency by estoppels has been created.
b. Pan can recover because Ali is in bad faith.
c. Pan can recover because the authority did not comply with the requisite that it must be in a special power of attorney.
d. Pan cannot recover because the sale is valid, the letter being a sufficient authority.
27.
28. Pene made Arro as his agent for all his properties. The contract indicates that “Pene withholds no power from the agent and
that the latter can execute acts which he considers deem appropriate and that the agent is given general and unlimited
powers.” Which of the following acts can be validly done by Arro?
a. To compromise in behalf of Pene.
b. To lease real property to another person for more than one year.
c. To make customary gifts for charity.
d. To sell or mortgage Pene’s land.
29. P appointed A as his agent with a generally worded authority stating that he withholds no power from A and that he has
allowed him absolute and unlimited powers. Accordingly, A sold P’s house and lot to X; leased to T an apartment unit for 2
years; also leased to W, P’s car for 5 years.
a. All the contract of A with X, T and W are valid and enforceable.
b. All the contract of A with X, T and W are unenforceable.
c. The contract with X and T are unenforceable but the contract with W is valid and enforceable.
d. The contract with W is unenforceable but the contract with X and T are valid and enforceable.
30. Considered “mere acts of administration”, which an agent is authorized to do if given an agency couched in “general term”.
Which is the exception?
a. To sue for the collection of debts and to engage services of a counsel to preserve the ownership and possession of the
principal’s property.
b. To give customary gifts for charity or the employees in the business managed by the agent.
c. Unregistered lease of real property to another person for one year.
31. Which of these in not an act of ownership and, therefore, need to be contained in a special power of attorney for the agent to
possess the same?
a. To make payments which are in the ordinary course of business.
b. To effect novations which put an end to obligations contracted before the agency.
c. To waive an obligation gratuitously.
d. To obligate the principal as a guarantor.
32. Which of the following constitute an act of strict domination or ownership?

a. To bind the principal to render some service without compensation.
b. To sue for the collection of debts.
c. To lease real property to another person for six months.
d. To make customary gifts for charity.
33. Three of the following requires a special power of attorney. Which is the exception?
a. Accept inheritance.
b. To waive obligation gratuitously.
c. To bind the principal in a contract of partnership.
34. Which of the following statement is true?

a. In a principal appoints an agent in writing with respect to the slae of a piece of land and the latter sold it to a buyer orally,
the contract between the agent and the buyer is void.
b. A contract of agency is generally gratuitous.
c. To lease a personal property to another person for more than one year does not require a special power of attorney.
d. The insolvency of the principal but not the agent shall extinguish the agency.
35. If an agents contract in the name of his principal, exceeding the scope of his authority, which would be the status and effect of
the contract?
a. Unenforceable
b. Void
c. Voidable
d. Valid
36. Pera executed a special power of attorney authorizing Aba to mortgage his land. Aba sold the same. Is the sale void?
a. Yes, a special power to sell includes the power to mortgage.
b. Yes, because it is voidable.
c. No, because it is unenforceable
d. No, because it is perfectly valid.
37. A special power to sell includes the power to

a. Mortgage
b. Barter
c. Sell on Credit
d. None of the above
38. The power of sell does not carry with it the power to
a. Find a purchaser or to sell directly.
b. To pledge
c. Make usual representations and warranty.
d. To deliver the property.
39. Which of the following contracts is void?

1st: the agent acting without authority in behalf of the principal.
2nd: the agent acting without authority and in behalf of himself.
a. 1st contact only

b. 2nd contract only
c. Neither 1st nor 2nd contracts
d. Both 1st and 2nd contracts
40. Without authority with Gon, Killua sold Gon’s car to Kurapika in behalf of Gon.
a. The transaction is void because Killua is not authorized by Gon.
b. The contract in unenforceable which cannot be ratified.
c. Gon is not bound by the transaction unless he ratifies.
d. Kurapika can have a claim against Gon because the property belongs to the latter.
41. The agent, excess of the authority given to him by his principal enters into a contract with a third person. If the principal ratifies
the contract, who will be liable to the third person, if any?
a. Only the principal
b. Only the agent
c. Both the principal and the agent jointly
d. Both the principal and the agent solidarily.
42. P appointed A as an agent to sell P’s car for P500,000. Thru A’s good marketing style, he was able to sell the car for
P600,000, 50% downpayment, 50% payable in 2 years. Hence,
a. Sale is unenforceable. A must render an account of his transaction to P up to P500,000 only.
b. Sale in enforceable. A must render an account of his transaction to P up to P600,000 after collection.
c. Sale is enforceable because A sold it in a manner more advantageous than that instructed by the principal.
d. Sale is unenforceable because B exceeded his authority.
43. Ben authorized Alf to sell goods belonging to the farmer. Alf sold the goods without disclosing the principal. The buyer is not
also aware that Alf is merely an agent of Ben. Which of the following statement is correct?
a. Ben is not bound because the agent acted in his own name.
b. Alf is not bound because the transaction is null and void.
c. Alf is bound because the agent is authorized, but the buyer cannot proceed against the undisclosed principal.
d. The buyer takes little to the merchandise but Ben can maintain successfully an action against him for the recovery of the
goods or for damages.
44. A, agent of P, in excess of authority entered into a contract in the name of P with X who kbew of the lack of authority and P did
not ratify the contract. The contract is
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
45. If an agent contracts in the name of his principal, exceeding the scope of his authority, what would be the status and effect of
the contract if the other party knows that he (agent) is unauthorized?
a. Void contract
b. Voidable contract
c. Unenforceable contract
d. Rescissible contract
46. Sunako is the agent of Kyohei, Kyohei athorized Hiroshi to sell his BMW car on installemt basis, Nao, the buyer paid the
downpayment, hence, the car was deliveres. Nao, however did not pay the balance, in a suit for collection of sum of money,
Nao interposed the defense that Kyohei has no personality to sue him because Sunako did not disclose Kyohei as the
principal.
a. Nao is correct because the contract deals only with hum and Sunako.
b. The defense of Nao is correct because the correct procedure is for Kyohei to collect the balance from Sunako and for the
latter also to collect from him.
c. Te defense of Nao is not correct because Sunako dealt with property belonging to Kyohei.
d. The defense of Nao is not correct because Sunako is an agent of Kyohei.
47. Conan appointed Sinichi to sell his car for P300,000. Sinichi sold the car to Haibara for P300,000 but Sinischi acted in his
name. After delivery Haibara inspected the car and he found hidden defects in the car. Can Haibara file an action against
Conan even when Shinichi acted in his own name?
a. No, under caveat emptor or let the buyer beware.
b. Yes, because this is a contract involving a property belonging to the principal.
c. No, because the agent acted in his own name.
d. No, because this is unenforceable by law.
48. By virtue of the existence of an emergency, the authority of an agent is correspondingly enlarged in order ti cope with the
exigencies or the necessities of the moment.
a. Implied agency
b. Agency by estoppels
c. Agency by necessity
d. Agency by ratification
49. One of the following is not a requisite if agency by necessity.

a. Existence of a very urgent situation.
b. Agent cannot communicate with the principal
c. The additional power is for the protection of the principal and agent.
d. The authority ceases immediately when no longer needed.
50. Goblin appointed Grim Reaper as agent to sell his house and lot for P2 < on instalment basis, Grim Reaper, however, was
able to sell it for the same price in cash.
a. Grim Reaper is liable to Goblin for damages due to bad faith.
b. Grim Reaper is liable to Goblin because he had exceeded his authority.
c. Grim reaper is not liable to Goblin even if he had exceeded his authority.
d. Grim Reaper is liable even if the transaction is beneficial to Goblin, because a general power of administration only was
given and not a special power of attorney.
51. Yong authorized Jong to sell his electric typewriter. He instructed Jong to sell it for P5,000. Jong offered the lectric typewriter
to Jung, who agreed to buy it for P6,000. Which of the following statement is false?
a. Jong cannot sell it to Jung because the instruction of Yong is to sell it for P5,000 only.
b. Jong can sell it and deliver for P6,000 but he is required only to remit P5,000.
c. Jong should inform Jung that the selling price of the electric typewriter is P5,000.
d. Jong can sell it to Jung and deliver the total purchase price to Yong.
52. Spongebob appointed Patrick to sell his car in cash for P1M. Patrick sold for P1.5 M on straight term with a downpayment of
50% and the balance after delivery of the car. The contract of sale us
a. Void sale because it was not made in cash as instructed by Spongebob.
b. Unenforceable sale because Patrick exceeded his authority.
c. Voidable because the buyer was misled as to the price of the car.
d. Valid because Patrick did not exceeded his authority since the contract was advantageous to the principal.
53. An agent with a general powers of administration, desirous of improving the financial condition of his principal’s business, sold
a piece of land belonging to his principal for P1,000,000 which is double the price that appeared in an inventory prepared by
the principal before leaving the place.
a. The sale is valid because it is obviously to the advantage of the principal.
b. The sale is valid because no prohibition was emphasized to sell the property.
c. The sale is not valid because there was no clear instruction from the principal to sell the land.
d. The sale is not valid because an agent with powers of administration cannot perform an act of strict dominant without a
special power of attorney.
54. Minam appointed Shin to manage his businesses in the Philippines while he was in abroad. Upon Minan’s return he noticed
that his 2006 Toyota Innova car was sold by Shin to Lee in amount of P500,000 and the registration has been transferred to
Lee although there was still a balalnce amounting to P100,000. Minam demanded from Lee the payment of the balance where
Lee paid him. In this case
a. The sale of the car is not valid because Shin acted beyond the scope of his authority.
b. The sale is valid because it has been ratified by Minam.
c. The sale is unenforceable because Shin is not armed with a special power of attorney.
d. The sale is voidable which can be ratified by Minam.
55. Mitch appointed George as his agent to a certain transaction. While in course of performing the job of an agency, Mitch died.
Which is not correct?
a. The death of Mitch terminates the agency.
b. George is still obliged to finish the transaction already begun should delay entail any danger.
c. Despite danger that may entail in case of delay, the agency should automatically be terminated.
d. The transaction that has been started should be estoppels if delay does not entail any danger.
56. Question 1: Chace authorized KC to borrow money for him. May KC lend his own money to Chace?
Question 2: Chace authorized KC to lend the money of the former at interest. Can KC borrow Chace’s money without the
knowledge of Chace?
a. Yes to 1st Question; No to 2nd Question

b. No to 1st Question; Yes to 2nd Question
c. Yes to both questions.
d. No to both questions.
57. Cy constituted Jen as her authorized agent to sell the former’s lancer car for P300,000 and to pay him a 5% commission
based on the selling price. Jen sold the car for P320,000. Jen should remit to Cy?
a. P300,000
b. P320,000
c. P285,000
d. P305,000
58. Cristy authorized Carl to sell his car for P500,000 cash with 10% commission. Carl was able to sell the car for P600,000 cash
or P100,000 more than Cristy’s price. For what amount is Carl accountable to Cristy?
a. P600,000
b. P500,000
c. P450,000
d. P540,000
59. Janell appointed Gian as her agent to sell her specific car in cash for P100,000 with 10% commission. Gian using persuasive
skills was able to sell it for P150,000 on credit. After the sale but before payment of the buyer
a. Gian must give P100,000 only.
b. Gian must give P100,000 minus the commission.
c. Gian must give P150,000 minus the commission.
d. Gian must give P150,000 and Janell in turn is to give Gian P50,000 as commission.
60. X delivers 10 sets of television to Y for the latter to sell them for P10,000 each. Y 10% commission is agreed upon the parties.
One day Y sells one TV set to a customer on credit but for the price of P12,000. Suppose that X does not consent to the sale
on credit.
a. X may demand P10,800 from Y.
b. X may demand P10,000 from Y.
c. X may consider the contract as unenforceable.
d. X may demand P9,000 from Y.
61. Blue is authorized by Green to sell ten books for P100 each at 10% commission. Blue sells books to Pink on credit but for a
price of P120 each. After ratifying the sale on credit, how much cash can Green collect from Pink?
a. P1,000
b. P1,200
c. P1,080
d. P900
62. Nick is authorized by Mark to sell the latter’s washing machines for P5,000 each at 10% commission. One day, Mark sells one
washing machine to Joy on credit (payable in 90 days) but for a price of P6,000. If Mark does not ratify this sale on credit, he
can collect cash payment from Nick
a. P4,500 (P5,000 less P500 commission)
b. P5,000 (the price without commission)
c. P5,400 (P6,000 less P600)
63. A guarantee commission agent

a. Bears the risk of collection on the same terms agreed upon with the purchaser.
b. Is liable to the principal even if the buyer is really insolvent.
c. Is liable for damages if he will not collect the credit on time.
d. Is entitled to another commission aside from ordinary commission.
e. All of the above
64. Features of guarantee commission agent. Which is the exception?

a. Entitled to another commission from ordinary commission.
b. Liable for damages if he will not collect the credit on time.
c. Liable to the principal even if the buyer is really insolvent
d. None of the above
65. June appointed July as his agent to sell his property for P100,000 om credit. July is given 10% ordinary commission and 15%
guarantee commission. July sold the property to August for P100,000 o credit and in the name of June payable in 60 days. If
on the 60th day, August is insolvent
a. July is not responsible because he aced in the name of June.
b. July is liable to June to the extent of his commission of 10%.
c. July should pay June the entire amount of P100,000 minus the guarantee commission.
d. July should pay June the amount of P100,000.
66. October authorized November to sell his products with 10% commission and 5% guarantee commission. November sod it to
December who failed to pay despite diligent efforts of November in collecting. Is November still liable for the purchase price?
a. Yes, because of the guarantee commission given to him.
b. No, because he was not at fault in the collection.
c. No, if he returns the guarantee commission.
d. Yes, and he is not entitled anymore to the commissions.
67. In three of the following cases, the agent can appoint a substitute, except
a. The principal authorized him to appoint a substitute.
b. The principal did not authorize him to appoint a substitute.
c. There is no stipulation as to the appointment of a substitute.
d. The principal forbids the appointment of a substitute.
68. Zhell appointed Kerl as her agent. In the contract, nothing was mentioned as to whether Kerl could appoint a substitute. Which
of the following statements is wrong?
a. Kerl could appoint Tin as her substitute even without prior permission from Zhell.
b. If Kerl appoints Tin as a substitute and Tin violated the instructions of the principal. Zhell can hold Kerl liable.
c. The appointment of substitute by Kerl without permission from Zhell is void.
d. If Kerl appoints Tin as a substitute and Tin violated the instructions of the principal, Zhell can hold Tin liable.
69. An agent without any express from the principal appointed a sub-agent to help him carry out the agency.
a. The substitution is void.
b. The substitution is valid but is the only agent is liable for the acts of the sub-agent.
c. Both the agent and the sub-agent are liable to the principal for the acts of the sub-agent under the valid substitution.
d. The substitution is valid, the substitute is the only one liable for his own acts.
e. None of the above.
70. Haha appointed Skull as his agent to sell Haha’s goods for P100,000 with a stipulation not to appoint a sub-agent. However,
Skull appointed Kook a ssub-agent. The day after his appointment, Kook sold the goods to JiHoo, a buyer in good faith. Is the
sale enforceable to the principal?
a. Yes, because Kook is in good faith.
b. Yes, after all there was no damage suffered by the principal.
c. No, because Skull was prohibited to appoint a sub-agent.
d. No, the contract is invalid until approved by the court.
71. X,Y,Z appointed by R as his agents to administer his building which were rented by various tenants while R was abroad for
three years. In the course of management. X caused through his fault damage to the building which assessed at P30,000. R
can claim.
a. P10,000 from each X,Y and Z.
b. P30,000 from X.
c. P30,000 from Y and Z
d. P30,000 from either X, Y and Z
72. Kyle appoints Jay and Potch as his agents. Jay and Potch agreed to be bound solidarily. Suppose Jay performed the agency
negligently which caused damage to Kyle, can Kyle hold Potch liable for the damage?
1st answer – No, if Jay acted beyond the scope of his authority.
2nd answer – Yes, If Jay did not act beyond the scope of his authority.
a. Only 1st is correct

b. Only 2nd is correct
c. Both are correct
d. Both are not correct
73. Ping appoints Pong and Pang as his agents solidarily to sell his specific property for P200,000, on cash basis. Can Ping hold
Pang liable if Pong sell the property for P100,000?
a. No, because Pong acted beyond the scope of his authority.
b. No, because the appointment of the two or more agents in one and the same obligation is joint and any stipulation to the
contrary is void.
c. Yes, but only for P25,000
d. Yes, because the obligation is solidarily.
74. Agent is not extinguished by

a. Withdrawal of the agent.
b. Appointment of a substitute against the prohibition of the principal
c. Accomplishment of the purpose
d. Death of the principal
75. Three of the following are modes of extinguishing an agency. Which is the exception?
a. Expiration of the period.
b. Insanity of the principal or the agent.
c. Death of the principal wherein the agency is for the interest of both agent and principal.
d. Dissolution of the firm which entrusted or accepted the agency.
76. Kelly in indebted to Jason in the amount of P100,000. As she failed to pay the same, she executed a document authorizing
Jason to collect a debt due her from Ken in the amount of P200,000 with the condition that if Jason could collect, he must
remit to Kelly the amount of P100,000. One month, thereafter, Kelly wrote Jason that she is revoking the agency. Is the
agency revoked?
a. No, the information should have been reduced in a public document.
b. No, Kelly should first pay Jason before the agency can be property revoked.
c. Yes, because an agency is revocable at the will of the principal.
d. Yes, Jason can just collect the P100,000 from Kelly.
77. Elia was granted general powers by Yoan. Suppose Yoan revoked the authority, but Serenity and Kyle dealt with Elia without
knowledge of such revocation. Will contract bind Elia?
a. No, if notice of revocation published only in a newspaper of general publication.
b. No, even if notice of revocation was published in a newspaper of general publication.
c. Yes, because the agent had general powers even if not published in a newspaper of general circulation.
d. Yes, because the agent had general powers but the revocation must be published in a newspaper of general circulation.
78. Mikaela appointed Mharie as her agent to sell her house and lot. One week, thereafter, Mikaela appointed Shen as her agent
to sell the same house and lot. What is the effect of the appointment of Shen?
a. There are now two agents in the person of Mharie and Shen.
b. The appointment of Shen does not revoke the appointment of Mharie.
c. It has the effect of automatic revocation of the authority of Mharie.
d. The appointment of Mharie is revoked only if notice is given too her.
79. Paw constituted Alz as his agent specifically fro the purpose of selling Paw’s latest model Honda Civic Car. Instead of selling
the said car, Alz sold to Berg the Toyota Corolla of Paw. Berg is aware that the authority of Alz is to sell the Honda Civic car,
Paw did not ratify the contract. Which tie is unenforceable?
a. The contract between Paw and Alz.
b. The contract between Alz and Berg.
c. The tie between Paw and Berg.
d. None because both are void.
80. Which of the following is not fundamental obligation of an agent?

a. To borrow if he is authorized to lend.
b. To subordinate his interest in favour of his principal if there is a conflict of interest.
c. To render an accounting of the transaction.
d. Not to carry out the agency, even if that is the instruction of the principal, if he knew it would result to a loss or damage to
his principal.
81. Statement 1: when two or more principals have granted a power of attorney for a common transaction or undertaking, anyone
of them may revoke the same without the consents of the others.
Statement 2: the agency is revoked if the principal directly manages the business entrusted to the agent, dealing, directing
with third persons.
a. True, True
b. True, False
c. False, False
d. False, True
82. Kim gave a general power of attorney to Song to sell his land. Thereafter, Kim executed a special power of attorney in favour
of Park to sell the same land without Song’s knowledge. After five days, Song executed a deed of sale in favour of Ong. After
two hours, Park sold the same land to Wong. Assuming that the documents have not yet been registered and neither of the
buyers has take possession of the land, which of the two sales is valid and enforceable?
a. The sale to Ong because the sale to him is ahead by two hours.
b. The sale to Ong because the appointment of the agent seller (Park) is ahead of the appointment of Kim.
c. The sale of Wong because the seller is authorized by a special power of attorney.
d. The sale by Park because an authority t sell th eland requires only a general power of attorney.
83. H appoints I as his agent giving I general powers to administer his riceland in Nueva Ecija and a coconut land in Quezon,
Subsequently, H appointed J, another agent, to administer and sell the land situated in Quezon. Which of the following
statements is not correct?
a. The authority to I to administer the property in Nueva Ecija is not revoked and shall continue.
b. There is an implied revocation of the authority to administer the property in Quezon but the authority to administer the
property in Nueva Ecija remains.
c. Both authorities will be revoked because the agency with general powers is inseparable.
d. The authority of I to administer the property in Quezon is impliedly revoked.
84. One of the following is not an obligation of an agent?

a. In the execution of the agency, the agent shall act in accordance with the instructions of the principal.
b. Shall be bound to advance the necessary funds, except when the principal is insolvent.
c. Shall finish the business already begun on the death of the principal, should delay entail any danger.
d. In case a person declaims an agency, he is bound to observe the diligence of a good father of a family in the custody and
preservation of the goods forwarded to him by the owner until the latter should appoint an agent.
85. The principal is not liable to expenses incurred by the agent

a. When it was stipulated that the agent would only be allowed a certain sum.
b. When the agent has complied with his obligations by acting according to the principal instructions.
c. When the agent incurred them with the knowledge that an unfavourable result would ensue and the principal was aware
of it.
d. When the expenses were incurred without the fault of the agent.
86. The principal is liable to expenses incurred by the agent

a. When the agent acted in contravention of the principal’s instructions unless the latter should wish to avail himself of the
benefits derived from the contract.
b. When the expenses where due to the fault of the agent.
c. When an agent is employed by the principal and such agent incurred expenses in the execution of the agency.
d. When the agent incurred them with knowledge that an unfavourable result would ensue, if the principal was not aware
thereof.
87. Troy appointed Trey thru a special power of attorney as his agent ot sell his land for P500,000. The following day, Troy,
without notice to Trey, sold the land in Sen who immediately took possession thereof. On the third day, Trey sold it to Ten who
registered it in Registration of Deeds. Assuming Sen and Ten are in good faith.
a. The land belongs to Sen because of his possession.
b. The land belongs to Ten because of the registration.
c. Each of them shall be entitled to one-half of the total area of the land.
d. Sen is entitled to the land because his seller is the principal and not just a mere agent.
88. Where two or more persons appointed an agent for a common transaction or undertaking, their liability to the agent for all
consequences of the agency is
a. Solidary
b. Joint
c. Subsidiary
d. Secondary
89. Ham and Bacon are co-owners of a piece of land and they named and authorized Sandwich to sell their land. Who will liable
to Sandwich for the payment of his commission?
a. Both Ham and Bacon jointly.
b. Both Ham and Bacon solidarily only if stipulated.
c. Both Ham and Bacon solidarily without stipulation.
d. 50% each for Ham and Bacon.
90. Prax and Pro appointed Ave as their agent to sell their property. Prax alone revoked the special power of attorney. Is the agent
revoked even without the consent of Pro?
a. No, otherwise anyone of them can revoke agency without the knowledge of the other.
b. No, both principal should consent to the revocation of the agency.
c. Yes, because Pro is superior over Pro.
d. Yes, because it is a consequence of solidarity between the principals.
91. No. 1: When two or more principals appoint an agent for a common transaction neither may revoke without the consent of the
other.
No. 2: If the principal failed to pay the agent his commission, the latter may retain the object belonging to the principal.
a. Both are True

b. Both are False
c. Only 1 is true
d. Only 1 is false
92. The following are the instances when an agency is not extinguished despite the revocation. Which is the exception??
a. When the agency is coupled with interest.
b. When a managing partner is dismissed as such without justifiable cause.
c. When the revocation is done in good faith.
d. When the agency is a means of fulfilling an obligation.
93. An agent with express power to sell certain property, without beig aware of the death of his principal, sold the property after he
death of his principal. The purchaser, however, knew of the death of the principal.
a. The contract is valid because the agent is in good faith.
b. The contract is not valid because the agent is in bad faith.
c. The contract of agent is valid because the knowledge of the death of the principal does not make the purchaser in bad
faith.
d. The contract is not valid because the purchaser is in bad faith even if the agent is in good faith.
94. X appointed Y to be his agent to administer his farm while X is in world tour but Y died leaving his son of legal age to take care
of the farm until X arrived. This is an example of agency created by
a. Ratification
b. Estoppel
c. Operation of Law
d. Consent of the Principal
95. NO. 1: if the agent dies, the heirs must notify the principal immediately and must continue the objectives of the agency until it
is accomplished or until the principal has appointed a new agent.
No. 2: Agency by operation of law is synonymous “presumed agency” or “tacit agency”

b. 1st statement True while 2nd is False
c. Both statements are false
d. 1st statement False while 1st is True
A. PLEDGE
1. An accessory real contract whereby one person delivers to another a movable for the purpose of securing a principal
obligation, with the understanding that when the obligation is fulfilled the thing shall be returned by the creditor to the debtor
together with all its fruits and accessions.
a. Real mortgage
b. Pledge
c. Chattel Mortgage
d. Antichresis
2. A contract of pledge is
a. A real contract because it is perfected by the delivery of the thing pledged.
b. An accessory contract because it ha no independent existence of its own.
a. Only A
b. Only B
c. Both A and B
d. Neither A nor B
3. Which is not characteristic of pledge?

a. Consensual
b. Accessory
c. Subsidiary
d. Unilateral
4. No. 1: If the thing is returned to the pledgor, the principal obligation is extinguished.
No. 2: A contract of pledge is consensual which is perfected from the time the thing pledged is placed in possession of the
creditor, or of a third person by common agreement.
a. Both statements are false

b. Both statements are true
c. Statement 1 true, statement 2 False
d. Statement 1 False, statement 2 true
5. One of the following is not a common characteristic of pledge and mortgage?

a. Consensual
b. Accessory
c. Nominate
d. Onerous
6. Which of the following is not a common requisite to pledge and mortgage?

a. Must be placed in the possession of the creditor.
b. Accessory contract
c. Absolute owner of the property
d. Property may be alienated when principal obligation become due for the payment to the creditor.
7. Which of the following is not an essential requisite to pledge and mortgage?

a. Constituted to secure fulfilment of a principal obligation.
b. Pledgor ot mortgagor must be the absolute owner of the property.
c. Thing pledged or mortgaged must be delivered to the creditor.
d. Thing pledged or mortgaged may be alienated.
8. Pledge and mortgage are accessory contracts. Which of the following statements is false?
a. They are meant to secure the fulfilment of a principal condition.
b. They cannot exist if the principal obligation is void.
c. They can exist by themselves.
d. They can secure fulfilment of rescissible obligation.
9. The following are essential requisites common to the contract of pledge and mortgage, except
a. That they are constituted to secure the fulfilment of a principal condition.
b. That the pledgor or mortgagor is the absolute owner of the thing pledged or mortgaged.
c. That the contract is registered with the Registration of Deeds.
d. That the person constituting the contract has free disposal of the property and that he is authorized legally for the
purpose.
10. Which of the following is a common requisite for pledge, chattel mortgage and antichresis?
a. The amount of principal and interest must be in writing
b. The property must be in the possession of the creditor.
c. The bind third persons they must be duly recorded in the office of the Register of Deeds.
d. It is constituted to secure the fulfilment of a principal obligation.
11. The following contract is not valid as against the contracting parties.
a. Mortgage which is not registered with the Registration of Deeds.
b. Pledge which does not describe in a public document the thing pledged and the date of the pledge.
c. In a contract of pledge where there is no delivery of the movable.
d. Chattel mortgage which does not contain affidavit of good faith.
12. Aten obtained a loan from Barra and pledged the property of Canto as security with the consent of the latter. Whih is not
correct?
a. There is no valid pledge if the property is not delivered to Barra.
b. The pledge is not valid if the debtor is not the owner of the property pledged.
c. In case of non-payment of loan, the pledgee does not automatically become the owner of the property pledged.
d. In case the property is sold at public auction, Aten or Canto may bid.
13. No. 1: Vinz borrowed P20,000 from Cath. Can Lei, a third person, secure the debt by pledging his own property?
No. 2: Play pledged to Toy his cow which is in the possession of Car. The cow was not delivered to Toy. There was also no
prohibition in the contract that Car was by common consent made the depositary of the property in Toy’s behalf. Is a contract
of pledge constituted by the parties?
a. Yes, Yes
b. Yes, No
c. No, No
d. No, Yes
14. Real property may be the object of pledge.
The thing pledged may be alienated by the pledgor.
a. True, False
b. False, True
c. False, False
d. True, True
15. Not a valid object of pledge

a. Certificates of Stocks
b. Stocks Dividends
c. Warehouse Receipts
d. Timberland
16. The following are the requisites of pledge except

a. The disposal of the property by the pledgor
b. Absolute ownership of the property pledged.
c. The thing pledged may be placed in the possession of a third person.
d. To bind a third person, it must be recorded in the Office of the Registration of Deeds.
17. Diana borrowed P25,000 from Cris. As security she pledged her choker which is made of gold and diamond. A public
instrument was executed. The date of pledge appears in the document but there is no description of the jewelry
a. The pledge is valid against third persons because the date of pledge appears in the public documents.
b. The contract is valid as against third persons because it is written in a public instrument.
c. If Diana will sell the choker to Estela, a third person, the latter does not have to respect the pledge because it is not valid
as to her.
d. If Diana will sell the choker to Estela, Cris, the pledgee being in possession, will have a better right over Estela.
18. Moon pledged his ring with Star. May Moo sell the ring to Cloud?
a. Yes, with the consent of Star.
b. Yes, without the consent of Star.
c. No, even with the consent of Star.
d. Yes, with the consent of Star who shall then be required to turn over the possession for Cloud.
19. To secure his loan to Sun, Princey pledged his shares of stocks, Later, Princey sold the said stocks to Momo who now
demands delivery of the stock certification to him. Decide.
a. Momo, as a buyer has the right to demand delivery of the shared to acquire ownership thereof.
b. Sun, as pledgee has the right not to surrender the certificate of shares to Momo and this will not invalidate the sale of the
shares.
c. Princey, has the right to the possession of the stock certificate to Momo as owner of the shares.
d. Both Sun and Momo have the right as co-possessor.
20. One of the following is a right of the pledgor

a. Reimbursement for the preservation of the thing pledged.
b. Demand return of the thing pledged upon payment of the principal obligation.
c. Recover or demand the thing pledged against a third person.
d. Continue to have a lien on the thing pledged even if it is alienated.
21. Which of the following is not an obligation of the pledgor?

a. To participate in the public auction of the thing pledged.
b. To inform the pledge of the flaws, of the thing if known to him.
c. To pay the principal obligation including the interest, and expenses in a proper case.
d. To reimburse the pledgee for the expenses incurred for the preservation of the thing pledged.
22. Atilano borrowed P50,000 from Bobadilla secured by a pledge of his diamond necklace. Can Bobadilla retain the necklace
until the debt is paid?
Alaminos borrowed P20,000 from Binitay payable in two months. As security, Alaminos borrowed again P5,000 from Binitay.
When the first debt fell due, can Binitay retain the ring until the second debt is paid in full?
a. Yes, No
b. Yes, Yes
c. No, Yes
d. No, No
23. The pledgee has a right to the reimbursement of the expenses for its preservation, and is liable for its loss or deterioration
If through the negligence of the pledgee, the thing pledged is in danger of being impaired, the pledgor may require the pledgee
that the thing be deposited with a third person.
a. Yes, No
b. Yes, Yes
c. No, Yes
d. No, No
24. De Leon owes Candid P10,000. As a security De Leon pledged his horse to Candid. While in the possession o the latter, the
horse gave birth to a pony. Who is entitled to the pony?
a. De Leon being the owner of the horse.
b. Candid because the horse delivered a pony while in his possession.
c. Candid and shall compensate the price of the pony with the expenses for the care of the horse, the excess, is any, shall
be applied to the principal.
d. De Leon shall be entitled to the pony but it shall be included as pledge in the absence of stipulation.
25. Rose pledged with Sampaguita her earring to secure her debt. The parties agreed that after a month the thing pledged will be
returned to Rose.
Q 1: As agreed upon by the parties, the earrings was returned even when the principal obligation was not yet been paid. Has
the pledge been extinguished?
Q 2: Suppose after a month, Sampaguita tried to return the earring but Rose did not accept. Sampaguita therefore renounced
the pledge by writing. Rose in a private document. Has the pledge been extinguished even if the object still in the possession
of Sampaguita?
a. Yes, No
b. Yes, Yes
c. No, Yes
d. No, No
26. A stipulation whereby the pledgee or mortgagee automatically becomes the owner of the thing pledged or mortgaged is called
a. Pactum commissorium
b. Consolidation of ownership
c. Conventional redemption
d. Consignation
27. The property which have been lawfully pledged to a creditor cannot be pledged to another as long as the first one subsists.
When the principal obligation becomes due, the things in which pledge consist may be appropriated for the payment to the
creditor, if the debt is not paid in due time.
a. True, True
b. True, False
c. False, False
d. False, True
28. D borrowed from B P10,000. D offered his right by way of pledged. It was expressly stipulated that upon non-paymnet of the
debt on time, the ring would belong to B. This forfeiture clause which has traditionally not been allowed, is called
a. Pacto de retro
b. Pacto commissorio
c. Commodatum
d. Mutuum
29. Which of the following does not distinguish pledge from real mortgage?
a. Constituted on personal property.
b. The property must be delivered to the creditor, or, try common consent, to a third person.
c. Pactum commissorium is not allowed.
d. Not valid against third persons if not registered.
30. Three of the following are considered elements of contract of pledge and/or mortgage. Which is the exception?
a. Real contract
b. Pledgor or mortgagor must be the absolute owner.
c. Thing pledged may be appropriated if debtor cannot pay.
d. Pledfor or mortgagor must have a free disposal of the thing pledged.
31. A borrowed P50,0000 from B and offered his land by way of a mortgage. If it is stipulated in the contract that if A fails to pay
the debt on time, B shall become the owner of the house. The stipulation is
a. Valid if it had traditionally been allowed.
b. Null and void because it is a pacto comisorio
c. Void because it is equivalent to alienation of property in favour of the creditor.
d. Valid because the house would automatically serve as payment for the land.
32. YG borrowed P50,000 from JYP. As a security for the payment of the debt, YG pledged a rolex watch valued at P75,000. It
was expressly stipulated in the contract that if YG cannot pay his debt when it matures, the debtor shall “execute a deed of
absolute sale of the ring in favour of the creditor”. YG failed to pay the debt when it matured.
a. JYP can now appropriate the watch because of the agreement stated in the contract.
b. JYP cannot appropriate the watch because it is pactum commissorium which is expressly prohibited by law.
c. The agreement is valid because it does not constituted pactum commissorium.
d. JYP cannot appropriate because it is obviously unfair on YG whose value of the wristwatch is over and above the amount
of his debt.
33. The rule on pactum commissorium does not apply to

a. Antichresis
b. Pledge
c. Real mortgage
d. Commodatum
34. Bulandus owes Rebamba the amount of P150,000. The debt is secured by a certificate of time deposit with Banco Filipino in
the amount of P100,000. When the debt matured, Rebamba informed the bank about the obligation of Bulandus and
presented a letter that he be allowed to exchange the certificate with cash. Can the bank validly encash the certificate.
a. No, this is pacto commissorio which is prohibited by law.
b. Yes, because this alienation and not appropriation
c. No, because Bulandus would be prejudiced by P50,000
d. Yes, it is not illegal for the creditor to encash the time deposit certificate because the security is also money deposited in
a bank.
35. Dionisio borrowed P20,000 from Cesario. Serafin acted as surely. To indemnify Serafin in case he is obliged to pay the debt.
Dionisio pledged to the surety his jewelry. Dionisio failed top ay and so the surety paid Cesario P20,000
a. Serafin can now appropriate the thing pledged in his favour.
b. If the jewelry is auctioned, any deficiency can be recovered from the debtor.
c. The pledged is not valid because the pledgee and the pledgor do not have a debtor-creditor relationship.
d. The jewlery can now be auctioned by Serafin and the safe of the jewelry shall extinguish the principal obligation.
36. It is also the essence of the contracts of the pledge and mortgage that when the principal obligation becomes due, the thing in
which the pledge or mortgage consists may be
a. Appropriated by the creditor
b. Disposed by the creditor
c. Alienated by the creditor
d. Deposited with the third person prior to foreclosure
37. Which of the following is not a required formality in an auction sale?

a. The pledgor or owner and the pledgee must bid.
b. It must be made with the help of a notary public.
c. The debt is already due but was not paid on time.
d. Notice to the debtor and the owner of the thing pledged before and after the public auction.
38. All of the following, except one, are formalities required to effect a valid auction sale of the thing pledged.
a. Debt is already due
b. Intervention of a notary public
c. Payment of the principal debt
d. Notice to debtor or owner stating the amount for which the public sale is to be held.
39. In the first auction, there was no other bidder except the creditor. A second auction was held
a. If there was still no other bidder in the second auction, the creditor can now appropriate the thing pledged.
b. If the pledgor bids and the term of the offer is the same as the highest bidder, he shall have preference over the other.
c. If the pledgee bids and his offer is the same as the pledgor, the pledgeee’s bid shll be given a preferred right.
d. All bids, except that the plegdee, must be for cash.
40. Alt owes Ctrl P50,000 secured by a pledge of his personal car. Unable to pay, Ctrl decided to sell the car in public auction.
Which f the following is false?
a. If at the first auction, the car is not sold, Ctrl is allowed to appropriate the thing for himself.
b. If at the first auction, the car is not sold, the pledgee should hold a second auction and if the thing is not sold, Ctrl may
now appropriate the thing for himself.
c. At the public auction, Alt or Ctrl can bid.
d. If the thing sold at the public auction at a price more than the principal obligation, interest and expenses, the excess goes
to Ctrl unless the contrary is provided.
41. If the process of sale is more than the obligation, the creditor is entitled to the excess unless otherwise stipulated, while if it is
less the creditor cannot recover the deficiency even if there is stipulation. This is applicable to
a. Pledge
b. Chattel mortgage
c. Real estate mortgage
d. Mutuum
42. Derick promised to give Kim a particular diamond ring if the latter will pass the October 2016 CPA Licensure Examinations.
Before the date of the examinations, Derick pledged the ring to Erin to secure a loan. Kim passed the CPA examinations.
a. Kim may get the diamond ring to Erin even if the debt is not due yet.
b. Kim can never claim the diamond ring from Erin because he is nor the owner of the ring.
c. Kim may get the diamond ring upon payment of the debt to Erin.
d. Kim can only claim the diamond ring from Derick because Erin is not a party to their agreement.
43. In sale of the thing pledged at the public auction, which of the following statement is not true or incorrect?
a. The sale of the thing pledged extinguishes the obligation.
b. The pledgor or the owner has a better right if he should offer the same terms as the highest bidder.
c. If the price of the sale is less, the pledgee is entitled to recover the deficiency.
d. If the price of the sale is more than the principal, interest and expenses, the pledgee may not be entitled to the excess.
44. Effect of the sale of the thing pledged if it is less than the principal obligation:
a. Creditor cannot recover the deficiency unless there is obligation.
b. Creditor can recover the deficiency.
c. Creditor can recover the deficiency even if there is no stipulation
45. A, a minor sold ring to B for P4,000. Later, B borrowed P6,000 from C and as security pledged the ring to C. B failed to pay C
and the latter foreclosed the pledge, sold it at public auction for P5,000 to X. As a result
a. The title of B is not valid, therefore the pledge of the ring to C is also not valid because in pledge the pledgor must be the
owner.
b. The deficiency of P1,000 cannot be recovered by C from B.
c. The deficiency of P1,000 can be recovered if there is stipulation to the effect.
d. If X is in bad faith (X has knowledge that A, the original owner is a minor) ownership will not pass to him.
46. Ay pledged his car to Ber for a loan of P500,000. The contract, stipulates that in the case the property is sold at public auction
and the proceeds shall not be sufficient to pay the obligation, Ay shall pay the balance of the loan. Unable to pay, Ber sold the
car in a public auction. It was sold ony for P300,000. Can Ber recover the balance from Ay?
a. Yes, because of the stipulation in the contract.
b. Yes, even if there is no stipulation in the contract
c. No, despite the stipulation in the contract.
d. No, unless there is a stipulation in the contract.
47. Atutu pledged his necklace to Atoto for a loan of P50,000. Due to Atutu’s failure to pay his debt, Atoto sold the necklace in a
public auction to Atata for P75,000. Assuming that there is an agreement in the contract that in case the proceeds shall
exceed the loan, the debtor shall be entitled to the excess. Can Atutu recover the excess of P25,000?
a. Yes, because of the agreement
b. Yes, even in the absence of an agreement
c. No, despite the agreement
d. No, whether or not there is an agreement.
48. Pale pledged his diamond ring with Quin to secure a loan of P15,000. The debt was not paid on time, and a public auction took
place. Which statement is false?
a. The pledgor is not disqualified to offer a bid.
b. If the sale of price is P10,000 the deficiency shall be paid by the pledgor.
c. If the price at the sale is ore, the excess goes to the creditor unless the contrary is proved.
d. If at the auction the pledgor should offer the same terms as the highest bidder she should be given preference over the
other.
49. Which of the following statement regarding pledge is true?

a. The sale of the thing pledge shall extinguish the principal obligation provided the proceeds of the sale i equal to the
amount of the principal obligation.
b. If the price of the sale is more than the principal obligation, the debtor shall be entitled to the excess, unless it is otherwise
agreed.
c. If the price of the sale is less than the principal obligation, the creditor cannot recover the deficiency, unless it is otherwise
agreed.
d. If the price of the sale is more than the principal obligation, the creditor shall be entitled to the excess, unless it is
otherwise agreed.
50. A pledged his watch for P20,000. A failed to pay his obligation. B sold it in a public auction for P18,000. Can B recover the
deficiency?
a. Yes, even without stipulation
b. Yes, if there is stipulation
c. No, even if there is stipulation
d. No, unless there is stipulation.
51. Using the preceding number, if the sale is for P22,000. Can A recover the excess?
a. Yes, even without stipulation
b. Yes, if there is stipulation
d. No, stipulation allowing recovery is void.
52. No. 1: in conventional pledge, there is no deficiency liability on the part of the pledgor in spite of stipulation to the contrary.
No. 2: in pledge in operation by law, the excess of the proceed of the sale after foreclosure shall belong to the pledgor even in
the absence of stipulation.
a. Only 2 is true
b. Only 1 is true
c. Both are false
d. Both are true
53. Ava borrowed P300,000 from Eve and pledged her car to secure the loan. Ava died living her child Cor, Duc and Est. Cor paid
P100,000 to Eve.
a. Cor can ask for extinguishment of the pledge to the extent of one-third of the entire obligation.
b. Cor should ask for refund because it was their parent who contracted the debt.
c. Cor has no right to pay the debt whether in full or in part.
d. The pledge is not partially extinguished because it is indivisible.
54. Apu borrowed P100,000 from Bay. The first P50,000 is secured by a pledge of Apu’s car while the second P50,000 is secured
by a pledge of his rolex watch. Apu paid P50,000.
a. Apu can demand the return of his car.
b. Apu can demand the retrun either of his car or his rolex watch at his option.
c. Apu cannot demand the return either the car or his rolex watch because a contract of pledge is indivisible.
d. Apu can demand the return either of his car or his rolex watch at the option of Bay.
55. Abu borrowed P90,000 from Ban secured by pledged of his platop computer worth P50,000 and secured by a pledge of his
rolex watch worth P50,000. When the balance of the debt was only P50,000. Abu failed to pay.
a. Ban can sell either the laptop computer or the watch at the option of Bu.
b. Ban can sell either the laptop computer or the watch at his option.
c. Ban has to sell both.
d. Ban has the option to sell either of the two objects even if the contract stipulates that he should sell only the watch.
56. A owes B P5,000 and as security, A pledged his diamond ring. Later, A borrowed again P2,000. As a result.
a. B has a right to retain the thing until the P7,000 is paid.
b. B has a right to retain the thing until the P5,000 is paid.
c. A has a right to demand that the thing be deposited with a third person.
d. B has the right to use the thing pledged until the pledge effects payment of the obligation.
57. Should there be reasonable ground to fear the destruction or impairment of the thing pledged, without the fault of the pledgee,
what is the obligation of the pledgee and what then is the right of the pledgor?
1st answer: the pledgee is bound to advise the pledgor, without delay, or any danger to the thing pledge.
2nd answer: the pledgor can demand the return which is of the same kind as the former and not of inferior quality.
a. Both answers are correct

b. Both answers are wrong
c. Only 1st answer is correct
d. Only 2nd answer is correct
58. On January 1, 2016, A borrowed P1M to B payable on December 1, 2016. As a security therefore, A pledged his car to B with
an agreement that B should use it. On June 30, 2016. A offered to pay the loan in full and asked for the return of the car. Can
A compel B to accept payment o the loan and return the car?
a. A can compel to B to accept payment and return the car because the debtor, A, not only does he have an obligation to
pay but also a right to pay.
b. Yes he can. Provided he makes the proper consignation of the money as payment with the court if B refuses to accept
payment.
c. No, because the period is for the benefit of the creditor and he may refuse advance payment.
d. No, because the creditor B can refuse premature payment offered by debtor A.
59. A pledge his ring to F to secure a P10,000 obligation payable in two years. One year thereafter, F gives a note in writing to A
stating that the debt not be secured and that A may get the ring back at her most convenient time. As a result
a. The principal obligation and the contract of pledge are both extinguished.
b. Only the principal obligation is extinguished but not the contract of pledge because A did not get back the ring.
c. Both the principal obligations and the contract of pledge are not extinguished because A did not get back the ring.
d. The pledge is extinguished and F is constituted as s depository.
B. REAL MORTGAGE
60. An accessory contract whereby real property is made as security for the faithful fulfilment of a principal obligation but the
possession thereof is retained by the debtor.
a. Real mortgage
b. Pledge
c. Chatter mortgage
d. Antichresis
61. All of the following, except one, are characteristics of a real mortgage
a. Indivisible
b. Real right
c. Accessory
d. Real contract
62. The object is real property in
a. Pledge
b. Chattel mortgage
c. Real estate mortgage
d. Mutuum
63. Similarity between real estate mortgage and antichresis

a. The property is delivered to the creditor
b. The subject matter is a real property
c. The creditor acquires the right to receive the fruits of the property
d. The creditor is obliged to pay the taxes and charges upon the estate.
64. Real mortgage as distinguished from sale a retro except

a. Indivisible
b. No transfer of ownership
c. There is transfer of possession
d. Applies only real property
65. Antonio borrowed one (1) kilo of shabu from Bayrante secured by a mortgage of his land. What is the status of the mortgage?
Amanto obtained a debt of P10,000 from Busalla and mortgaged the coconut land owned by Cantoria in Quezon City without
the knowledge of the owner. What is the status of the mortgage?
a. Valid, Void
b. Valid, Valid
c. Void, Valid’
d. Void, Void
66. Statement 1: A mortgages on real property is by itself a real property also
Statement 2: in the absence of a stipulation, a mortgage on the land will include future houses that may be built thereon.
a. True, True
b. True, False
c. False, False
d. False, True
67. Real estate mortgage

a. Has for its object movables as well as immovables
b. Is perfected at the moment the contract is registered with the Registry of Property.
c. Is inseparable because the mortgage directly and immediately subjects the property upon which it is imposed, whoever
the possessor may be, to the fulfilment of the obligation for whose security it was constituted.
d. Entitles the mortgage to the fruits of the thing mortgaged.
68. Not an essential requisite of a real estate mortgage

a. Mortgage should have free disposal of the property mortgaged, and the absence ithereof, he should be legally authorized
for the purpose.
b. Subject matter of a contract must be immovable property or alienable real rights upon immovables.
c. Mortgagor is the absolute owner of the property mortgaged.
d. Constituted to secure the performance of the principal obligation.
69. The mortgage instrument is not valid if not recorded in the Registry of Deeds.
Third persons with knowledge of the existence of the mortgage are bound because as to them, knowledge of a registered
mortgage is equivalent to registration.
a. True, True
b. True, False
c. False, False
d. False, True
70. X borrowed money from Y and gave a piece of land as a security by way of mortgage. It was agreed between the parties that
upon nonpaymnet of the loan, the land would already belong to Y. If X failed to pay the debt, would Y now become the owner
of the land?
a. Y would become the owner because it was agreed upon by them based on the principle of autonomy of contracts.
b. Y would not become the owner because the agreement that he would become the owner upon dealt of X is against the
law.
c. Y would now become the owner but with right of redemption by X.
d. Y would not become the owner if X annuls the voidable agreement.
71. When the mortgage is already due and remains unpaid, can the mortgagee appropriate the mortgaged property?
1. No, the only right of the mortgagee is to foreclose the mortgage.

2. Yes, if there is a stipulation that the mortgagee can appropriate the property.
a. Only 1st is True

b. Only 2nd is True
c. Both are wrong
d. Both are right
72. Alay-ay borrowed P50,000 from Bevora secured with a mortgage of real property situated in Quezon City. The debt fell due
and was not paid. Assuming no mention was made in the contract on the natural accessions, improvements, or fruits, which of
the following rules is correct?
a. All fruits which were harvested during the pendency of mortgage contract should accrue to the mortgagee.
b. Pending fruits when the obligation becomes due are covered by the contract of mortgage.
c. The mortgage on the land should include future houses thereon, even if there is a stipulation to the contrary.
d. Machinery temporarily removed from the mortgaged land is not included in the mortgage.
73. Alan and Bari are co-owners (in equal shares) of a parcel of land. May Bari mortgage his share in the property?
a. Yes, but he should secure consent of his co-owner.
b. Yes, even without the consent of the co-owner.
c. No, because the contract or mortgage is indivisible
d. No, because the portion of the land owned by Bari is not identifiable.
74. Romeo and Juliet borrowed from Shakespeare and mortgaged their co-owned land. While the mortgage debt is pending,
Romeo and Juliet partitioned the property between them, and Juliet paid his share of the land.
a. The mortgage on the land is extinguished.
b. The mortgage on Juliet’s share of the land is extinguished.
c. The mortgage on Juliet’s share of land is not extinguished.
d. The mortgage on Shakespeare’s share of land is extinguished.
75. Bae borrowed a total sum of P200,000 from Baby, secured by a mortgage of a land in Bicol for a debt of P80,000, and by a
mortgage on a land in Samar for the balance of P120,000. Bae paid P80,000 of the debt.
a. The mortgage on either Bicol land or Samar land cannot be cancelled.
b. The mortgage on both Bicol land and Samar land can be cancelled.
c. Only the mortgage on the land in Bicol can be cancelled.
d. Only the mortgage on the land in Samar can be cancelled.
76. The debtor-mortgagor may sell the mortgaged property in third person
a. If there is no prohibition in the contract.
b. Even if there is a stipulation in the contract forbidding the owner from selling it.
c. Only if he duly authorized by the mortgagee in writing.
d. Only if with the written consent of the mortgagee.
77. D mortgaged his land to C with the stipulation that the former cannot sell his land before he has paid his loan to C. D sold the
land to X despite such agreement. Which of the following is correct?
a. The contract of sale is void.
b. The consent of C is necessary before D can sell the land.
c. The stipulation prohibiting sale of the land is void.
d. The sale is valid if the buyer was not aware of the mortgage.
78. In a real estate mortgage, the mortgagor can sell the mortgaged properly
a. With the consent of the mortgagee in writing.
b. Even without the consent of the mortgagee.
c. Only with the consent of the mortgagee orally or in writing.
79. Alco mortgaged his house and lot in Quezon City to Bon. May Alco sell the house and lot to Cab?
a. No, otherwise the sale is void.
b. Yes, if there is no stipulation forbidding the owner from selling the mortgaged property.
c. No, if there is a stipulation forbidding the owner from selling the mortgaged property.
d. Yes, even if there is a stipulation forbidding the owner from selling the mortgaged property.
80. Cue mortgaged his house and lot to Barbie as collateral for the payment of his loan obligation. The mortgage contract
stipulates that Cue cannot sell the property while the obligation exists. Before maturity of the mortgage, Dez offered to buy the
property from Cue.
a. Cue cannot sell the property to Dez unless he pays the loan obligation.
b. Cue can sell the property only if Barbie consents to it.
c. Cue cannot sell the property to Dez because of the agreement not to sell the property to Dez.
d. Cue can sell the property to Dez despite the stipulation in the mortgage contract not to sell.
81. Alonte mortgaged his land to Barbonio to obtain a debt of P100,000. Alonte then sold the land to Cadores. When the debt falls
due, to whom should Barbonio demand payment?
a. From Alonte only, the mortgagor.
b. From Cadores only, the possessor.
c. From Alonte and if he fails to pay, from Cadores. If the latter does not pay, the mortgaged may be foreclosed and in case
of deficiency, Cadores cannot be held liable fro such deficiency, even if there is a stipulation to the contrary.
d. From Alonte and if he fails to pay, from Cadores. If the latter does not pay, the mortgage may be foreclosed and in case of
deficiency, Carodes cannot be held liable for such deficiency, in the absence of a contrary stipulation.
82. Bes bought from Sal a mortgaged property. if the property is foreclosed because of Sal’s failure to pay, who will be responsible
for the deficiency judgement?
a. Bes
b. Bes even if he does not want to assume the obligation.
c. Sal if Bes does not want to assume the mortgage obligation.
d. Sal because the buyer does not generally assume the mortgaged obligation.
83. In real estate mortgage, the following rules are valid, except
a. A stipulation in the mortgage contract prohibiting the owner from alienating the immovable mortgaged is valid.
b. The mortgagee may alienate the mortgage credit or assign to a third person in whole or in part.
c. Any stipulation allowing the mortgage creditor to appropriate the property mortgaged is null and void.
d. If alienated or mortgage credit is not registered, it is still valid between the parties.
84. D mortgaged his land to C as security for the loan. Fearing foreclosure of the mortgage due to his inability to pay the loan, D
sold the land to B without the consent of C. Which is correct?
a. The sale is void unless C can give another security.
b. B cannot acquire ownership over the land even if D delivers the land to him.
c. D cannot sell the land if there is an agreement prohibiting the mortgagor from alienating the land.
d. D can sell the land even without the consent of C.
85. D borrowed P200,000 from C, and as security, he mortgaged his parcel of land. Unable to pay, foreclosed the mortgage and
sold it at a public auction.
Q1: Assuming that the land was sold for P150,000, can C collect the deficiency to D?
Q2: Assuming that the land was sold for P220,000, is C entitled to the excess?
a. Yes, Yes
b. Yes, No
c. No, No
d. No, Yes
86. Real estate mortgage as distinguished from pledge

a. The debtor is entitled to the excess of the proceeds if stipulated.
b. The debtor shall not be entitled to the excess of the proceeds.
c. The debtor is not entitled to the excess of the proceeds.
d. The creditor cannot recover deficiency.
87. Which of the following stipulation is void?
1st A stipulation in a contract which fixes a tipo or upset price, at which the property will be sold at a foreclosure proceeding.
2nd A stipulation forbidding the owner from alienating the immovable mortgaged.
a. 1st only
b. 1st and 2nd
c. 2nd only
d. Neither 1st nor 2nd
88. 1st statement: in all cases of extrajudicial sale, the mortgagor may redeem the property at any time within the term of one year
from and after the date of registration of sale.
2nd statement: in judicial foreclosure of real estate mortgage, the general rule is that the mortgagor cannot exercise his right of
redemption after the confirmation of the sale by the court.
a. Both are correct

b. Both are wrong
c. 1st is correct
d. 2nd is correct
C. CHATTEL MORTGAGE
89. Which of the following is not a source of Chattel Mortgage Law?

a. Revised Penal Code
b. Civil Code
c. Chattel Mortgage Law
d. 1986 Constitution
90. A contract by virtue f which personal property is recorded in the Chattel Mortgage Register as a security of the performance of
an obligation.
a. Pledge
b. Real Mortgage
c. Antichresis
d. Chattel Mortgage
91. Personal properties that can be mortgaged under the Chattel Mortgage Law
a. Shares of stocks
b. Ungathered fruits or products
c. Interest in business
d. All of the above
92. An oath in a contract of chattel mortgage wherein the parties severally swears that the mortgage is made for the purpose of
securing the obligation specified in the conditions thereof, and for no other purpose, and that the same is a just and valid
obligation, and one not 6entered into for the purpose of fraud is
a. Oath of affirmation
b. Quaker Oath
c. Oath of Office
d. Affidavit of good faith
93. A chattel mortgage is valid between the parties even without an affidavit of good faith.
The mortgagee has the right to take possession if the chattel mortgaged upon dealt of the mortgagor
a. True, True
b. True, False
c. False, False
d. False, True
94. May a leasehold improvement constructed on a rented land be the subject of a chattel mortgage?
a. No, if the mortgagor is lessee.
b. Yes, if the mortgagor is the lessor.
c. No, because a leasehold improvement is a real property.
d. Yes, if the mortgagor and the mortgagee agree and no third persons are prejudiced.
95. Ann borrowed P25,000 from Julie and delivered her ring to Chace as security. If the accessory contract is made orally it is a
a. Chattel Mortgage
b. Pledge
c. Real Mortgage
d. Antichresis
96. Which of the following statement is not correct?

a. If the thing pledged will be returned by the pledgee, the contract of pledge is extinguished.
b. Any stipulation allowing the pledgee or mortgagee to appropriate the thing pledged or mortgaged is void.
c. In case the creditor foreclosed the chattel mortgage, he cannot recover any deficiency in case the proceeds of the
foreclosure sale are less than the unpaid obligation.
d. A public document containing a clear and complete description of the property mortgaged must be registered in the
Chattel Mortgage Register, otherwise, the mortgage contract is not valid.
97. Aaron borrowed from Jiro and as security for its payment of mortgaged his car to Chun. Upon failure to pay, Chun sold the
mortgaged chattel but the proceeds did not fully satisfy the secured debt. Can the mortgagee recover the deficiency from the
mortgagor?
a. No, the provisions on pledge prohibiting recovery will apply.
b. No, the provisions of Recto Law will apply.
c. Yes, there is no such prohibition under the Civil Code although prohibited under the Chattel Mortgage Law.
d. Yes, there is no such prohibition under the Civil Code and the Chattel Mortgage Law.
98. A mortgaged his car to B for P200,000. A failed to pay his obligation. B sold it at public auction for P180,000. Can B recover
the deficiency?
a. Yes, even without the stipulation
b. Yes, only if there is stipulation
d. No, unless there is stipulation
99. Using the preceding number, if the sale is for P220,000, can A recover the excess?
a. Yes, even without the stipulation
b. Yes, only if there is stipulation
d. No, unless there is stipulation
100. Chattel mortgage as distinguished from pledge

a. The excess over the amount due after foreclosure goes to the debtor.
b. The sale of the object in an auction extinguished the obligation.
c. The delivery of the personal property is necessary.
d. The registration of the property in the Registry of Property is necessary.
101. Debtor Aban issued a promissory note in the amount of P10,000 in favour of Metrobank secured by mortgage of the properties
worth P30,000. When Aban failed to pay the indebtedness, despite demands made by Metrobank, the later instituted a
collection suit to enforce payment of the P10,000 account. Subsequently, Metrobank also filed foreclosure proceedings against
Aban for the security given for the account. Which of the following statement is false?
a. If the amount realized in the auction sale is P15,000, Aban can collect from Metrobank the excess amount of P5,000.
b. If it is P9,000 etrobank, can collect from Aban the deficiency of P1,000.
c. Metrobank can instituted an auction for collection and at the same time foreclose the mortgaged propert.
d. In letter (A), Aban can only collect the excess amount if there is an stipulation to that effect.
102. S sold to B a specific car for P20,000 payable in four equal instalments, S delivered the car to B but required B to mortgaged it
back to S to answer for the unpaid instalments. B paid the 1 st instalment, but the last three he failed to pay. S foreclosed the
mortgaged property and sold it at public auction for P13,000.
a. S can recover from B the balance of P2,000
b. S can recover from B the balance of P2,000 if there is stipulation to that effect.
c. S cannot recover the deficiency anymore even if there is stipulation.
103. In case of foreclosure of the personal property mortgaged, where such thing was previously sold to the buyer on an instalment
basis and the proceeds of the sale at public auction is less than the personal obligation, can the seller recover the deficiency
from the buyer?
1st answer: no, the seller is not entitled to recover the deficiency from the buyer.
2nd answer: yes, the seller is entitled to recover the deficiency from the buyer.
a. Both answers are correct

b. Both answers are wrong
c. Only 1st answer is correct
d. Only 2nd answer is correct.
SPECIAL LAWS
COOPERATIVES
1. The minimum number of natural persons required to organize a primary cooperative well.
A. 15
B. 10
C. 5
D. 20
2. A single-purpose cooperative may transform into a multi-purpose cooperative and may create subsidiaries only after at least:
A. 2 years of operation
B. 2 years from registration
C. 2 years from cooperation
D. 5 years from registration
3. A cooperative duly registered shall have:

A. Limited Liability
B. Comprehensive Liability
C. Absolute Liability
D. General Liability
4. A cooperative may register for a term not exceeding how many years?
A. 50
B. 25
C. 20
D. 100
5. A cooperative may apply for extension of term but such extension cannot he made earlier than years prior to the original or
subsequent expiry date/dates.
A. 5
B. 4
C. 3
D. 2
6. The minimum subscription of the authorized capital stock of a cooperative is:

A. 25% of the ACS
B. 30% of the ACS
C. 10% of the ACS
D. 15% of the ACS
7. The minimum paid-up share capital of a cooperative shall be 25% of the total subscription but not less than:
A. 2,000
B. 10,000
C. 5,000
D. 3,500
8. A cooperative formed and organized under the Cooperative Code acquires juridical personality from the:
A. Date the CDA issues the certificate of registration
B. Date the directors and officers are duly elected
C. Date the articles of Cooperation are submitted to the CDA
D. Date indicated in the Articles of Cooperation
9. The Articles of Cooperation and bylaws of the Cooperative maybe amended by ____ vote of all members with voting rights,
A. 2/3
B. 1/3
C. 1/2
D. 1/4
10. Contracts executed between private persons and cooperatives prior to the registration of the cooperative shall be ____ between
the parties and upon registration of the cooperative.
A. Valid
B. Void
C. Voidable
D. Unenforceable
11. Any registered cooperative may resolve to divide itself into 2 or more cooperatives by a resolution approved by a vote of ____ of
all the members with voting rights.
A. 3/4
B. 2/3
C. 1/2
D. 1/4
12. Any registered cooperative may resolve to merge or consolidate with another cooperative by a resolution approved by a vote of
____ of all the members with voting rights.
A. 3/4
B. 2/3
C. 1/2
D. 1/4
13. Any merger or consolidation of Cooperatives shall be effective upon:
A. The issuance of the certificate of merger and consolidation by the CDA
B. The filing of the articles of merger and consolidation with the CDA
C. The election of the directors of the merged and consolidated cooperatives
D. The date indicated in the articles of merger and consolidation
14. It is a cooperative the primary purpose of which is and distribute commodities to members and non-members.
A. Consumers
B. Producers
C. Credit
D. Procurement
15. It is a cooperative that undertakes joint production whether agricultural or industrial.

A. Producers
B. Consumers
C. Farmers
D. Agro-Industrial
16. It is a cooperative engaged in the supply of production inputs to members and markets their products.
A. Marketing
B. Producers
C. Advertising
D. Suppliers
17. It is a cooperative which combines 2 or more of the business activities of the different types of cooperatives.
A. Multi-purpose
B. Bi-purpose
C. Tri-purpose
D. Complex
18. It is a cooperative the members of which are natural persons.

A. Primary
B. Secondary
C. Tertiary
D. Natural
19. It is a cooperative the members of which are primary cooperatives.

A. Secondary
B. Tertiary
C. Federation
D. Union
20. It is a cooperative the members of which arc secondary cooperatives.

A. Tertiary
B. Primary
C. Federation
D. Union
21. The kinds of membership in a cooperative are:

A. Regular and Associate
B. Regular and Special
C. Ordinary and Extra-Ordinary
D. Class A and B
22. An associate who meets the minimum requirements of regular membership, continues to patronize the cooperative for ____
years, and signifies his/her intention to remain a member shall be considered a regular member.
A. 2
B. 1
C. 3
D. 4
23. A cooperative organized by minors shall be considered a cooperative.

A. Laboratory
B. Minor
C. Youth
D. Young
24. It is the highest policy-making body of the cooperative.

A. General-Assembly
B. Board of Directors
C. Board of Trustees
D. Executive Committee
25. What is a delegable tower of the GA? ,

A. To approve contracts entered into by the cooperative
B. To determine and approve amendments to the articles of cooperation
C. To elect or appoint the members of the board of directors and remove them for cause
D. To approve developmental plans of the cooperatives
26. Only for purposes of prompt and intelligent decision-making, the GA may by a vote of all its members with voting rights, delegate
some of its powers to a smaller body of the cooperative.
A. 3/4
B. 2/3
C. 1/2
D. 1/4
27. What is the required quorum during a meeting of the GA?

A. At least 25%
B. At least 20%
C. At least 50%
D. At least 50% plus 1
28. Each member of a primary cooperative shall have only ____ vote/s.
A. 1
B. 2
C. 3
D. 5
29. In case of members of secondary or tertiary cooperatives, they shall have basic vote/s and as may incentive votes but not
exceed ____ vote/s
A. 1.5
B. 1.1
C. 5.5
D. 5.1
30. Voting by proxy may be allowed by the bylaws of a cooperative other than a cooperative.
A. Primary
B. Secondary
C. Tertiary
D. Federation
31. It is where the direction and management of the affairs of the cooperative shall be vested.
A. Board of Directors
B. General Assembly
C. Executive Committee
D. Office of the President
32. The Board of Directors of a cooperative is composed of:

A. Not less than S but not more than 15
B. Not less than 10 but not more than 15
C. Not less than 15 but not more than 20
D. Not less than 10 but not more than 20
33. Who elects the members of the Board of Directors of a cooperative?

A. Genera] Assembly
B. Stockholders
C. Shareholders
D. Executive Committee
34. What is term of the members of the board of directors of a cooperative?

A. 1
B. 2
C. 3
D. 5
35. First Statement: A director or committee member appointed by any financing institution need not be a member of the
cooperative. Second Statement: A director or Committee member appointed by any financial institution shall have no powers,
rights nor responsibilities except to provide technical assistance as required by the cooperative.
A. Both statements are true
B. First statement only is true
C. Second statement only is true
D. None of the statements is true
36. Unless the bylaws provide otherwise, what constitutes a quorum for the conduct of business in board meetings?
A. Majority
B. 2/3
C. 1/2
D. 1/3
37. First Statement Directors of a cooperative cannot attend or vote by proxy at board meeting. Second Statement: A vacancy in the
board of directors in a cooperative, other than by expiration of term, may be filled by the vote of at least a majority of- the
remaining directors, if still constituting a quorum.
B. First statement is only true
C. Second statement is only true
38. First Statement: Loss of confidence shall not be a valid ground for removal of an officer of a cooperative. Second Statement: No
2 or more persons with relationships up to the 3Td civil degree of consanguinity or affinity nor shall any person engaged in a
business similar to that of the cooperative nor who in any other manner’ has interests in conflict with the cooperative shall serve
as an appointive officer.
B. First statement is only true
C. Second statement is only true
D. None of the statement is true
39. No additional compensation other than per diems shall be paid to a director of a cooperative during of existence of any
cooperative.
A. First year
B. First 2 years
C. First 3 years
D. First 5 years
40. Unless already fixed in the bylaws, the compensation of all other employees of the cooperative shall he determined by the:
A. Board of Directors
B. General Assembly
C. Executive Committee
D. Compensation Committee
41. A contract entered into by the cooperative with one or more of its directors, officers and committee members may be ratified by a
vote of all members with voting rights, present and constituting a quorum in a meeting called for the purpose.
A. 3/4
B. 1/2
C. 1/2 + 1
D. 2/3
42. An act of disloyalty of a director of a Cooperative may be ratified by a vote of all members with voting rights, present and
constituting a quorum in a meeting called for the purpose.
A. 3/4
B. 1/2
C. 1/2 + 1
D. 2/3
43. An elected officer of a cooperative may, be removed by a vote of all members with voting rights, present and constituting a
quorum in a meeting called for the purpose.
A. 3/4
B. 1/2
C. 1/2 + 1
D. 2/3
44. Cooperatives with accumulated reserves and undivided net savings of not more than shall be exempt from all national, city,
provincial, municipal or barangay taxes of whatever name and nature.
A. P10 million
B. P5 million
C. P3 million
D. P1 million
45. All tax-free importations of a qualified cooperative shall not be sold nor the beneficial ownership thereof be transferred to any
person until after years, otherwise, the cooperative and the transferee or assignee shall be solidarily liable to pay twice the
amount of the imposed tax and/or duties.
A. 5
B. 4
C. 3
D. 2
46. In areas where there are no available notaries public, the judge exercising his ex officio capacity as notary public, shall render
service, free of charge, to any person or group of persons requiring the administration of oath or the acknowledgement of articles
of cooperation and instruments of loan from cooperatives not exceeding:
A. P50,000
B. P250,000
C. P200,000
D. D. P100,000
47. Upon dissolution of a cooperative, what happens to the capital donated to said cooperative?
A. It is subject to escheat
B. It shall be divided among the members of the cooperative
C. It shall be returned to the donor
D. It shall be donated to another cooperative with a similar purpose
48. No member of the primary cooperative other than the cooperative itself shall own or hold more than _____ of the share capital of
the cooperative.
A. 10%
B. 15%
C. 20%
D. 25%
49. No member shall transfer his shares or interest in the cooperative or any part thereof unless he has held such share capital
contribution or interest for not less than:
A. One year
B. 2 years
C. 3 years
D. 5 years
50. What capital is raised by the cooperative to strengthen its capital structure?
A. Revolving Capital
B. Retained Capital
C. Reserve Capital
D. Raising Capital
51. It shall not be construed as profit but as an excess of payments made by the members for the loans borrowed, or the goods and
services availed by them from the cooperative, or the difference of the rightful amount due to the members for their products sold
or services rendered to the cooperative
A. Net surplus
B. Retained earnings
C. Revenues
D. Income
52. First Statement: The GA of the Cooperative may decrease the amount allocated to the reserve fund when it already exceeds the
share capital. Second Statement: Upon the dissolution of the cooperative, the reserve fund shall not be distributed among the
members.
B. First statement only is true
C. Second statement only is true
53. Where no creditors are affected the cooperative may be voluntarily dissolves by vote of the board of directors and by a resolution
duly adopted by the affirmative vote of at least all the members with voting rights, present and constituting a quorum at a meeting
to be held upon call of the directors.
A. Majority; ¾
B. 3/4; ¾
C. 2/3; ¾
D. Majority; 2/3
54. A cooperative may be dissolved by order of a competent court alter due hearing on the ground/s of:
First: Violation of any law, regulation or provisions of its bylaws
Second: Insolvency
A. First and Second
B. First only
C. Second only
D. None of the given
55. A cooperative may be dissolved if it has not commenced business and its operation within years after the issuance of its
certificate of registration.
A. 2
B. 3
C. 4
D. 5
56. A cooperative may be dissolved if it has not carried on its business for consecutive years.
A. 2
B. 3
C. 4
D. 5
57. Every cooperative whose charter expires by its own limitation or whose existence is terminated by voluntary dissolution or
through an appropriate judicial proceeding shall nevertheless continue to exist for years after the time it is dissolved to wind up
its affairs.
A. 3
B. 4
C. 5
D. 6
58. Upon the winding up of the cooperative affairs, any asset distributable to any creditor, shareholder or member who is unknown or
cannot be found shall be given to the:
A. Federation or union to which the cooperative is affiliated with
B. Government
C. Trustee
D. Any federation or union
59. Every cooperation shall conduct its affairs in accordance with Filipino culture and experience and the universally accepted
principles of cooperation which include the following, except:
A. Open and Voluntary Membership
B. Democratic Control
C. Unlimited Interest in Capital
D. Division of Net Surplus
60. A duly registered cooperative shall have the following powers and capacities, except:
A. Of succession
B. To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage, and otherwise deal with such real and
personal property as the transaction of the lawful affairs of the cooperative may reasonably and necessarily require
C. To join federations or unions
D. None of the above
61. No merger or consolidation shall be valid unless approved by ________ of each of the constituent cooperatives at _________
meetings. The dissenting members shall have the right to exercise their right __________.
1st Blank
A. Majority of all the members eligible to vote
B. (2/3) of all the members
C. (2/3) of all the members eligible to vote
D. Quorum
2nd Blank
A. Separate General Assembly
B. Special General Assembly
C. Joint General Assembly
D. General Assembly
3rd Blank
A. To withdraw their vote
B. To withdraw their membership
C. Of appraisal
D. To file a derivative suit
FINANCIAL REHABILITATION AND INSOLVENCY ACT
62. Which debtors arc covered by the FRIA?

A. GOCCs
B. Banks and Quasi-Banks
C. Insurance Companies
D. Pie-Need Companies
63. Which debtors are not covered by the FRIA?

A. National and Local Government Agencies or Units
B. DTI-Registered Sole Proprietorship
C. SEC-Registered Partnership
D. Insolvent Individual Debtor as defined by the FRIA
64. It is the financial incapacity of the debtor to pay his liabilities as they fall due in the ordinary course of business of whenever his
liabilities are greater than his assets.
A. Insolvency
B. Suspension of Payments
C. Liquidity
D. Solvency
65. It refers to the postponement, by court order, of the payment of debts of one who possesses sufficient property to cover all his
debts but foresees the impossibility of meeting them when they respectively fall due.
A. Suspension of Payments
B. Voluntary Insolvency
C. Involuntary Insolvency
D. Preliminary Injunction
66. It is a procedure where the debtor applies to-be discharged from his debts and liabilities.
A. Voluntary Insolvency
B. Involuntary insolvency
C. Suspension of Payments
D. Special Civil Action
67. In case of a sole proprietorship, the petition for voluntary insolvency must be approved by the:
A. Owner
B. Majority of the partners
C. Majority of the directors
D. Owner and spouse
68. In case of partnerships, the petition for voluntary insolvency must be approved by the:
A. Majority of the partners
B. 2/3 vote of the partners
C. 3/4 vote of the partners
D. All of the partners
69. In case of corporation, the petition for voluntary insolvency must be approved by the:
A. Majority vote of the board of directors or trustees and authorized by the vote of the stockholders representing at least 2/3 of
the outstanding capital stock (or, of the members)
B. Majority vote of the board of directors or trustees and authorized by the vote of the stockholders representing at least 1/2 of
the outstanding capital stock (or, of the members)
C. 2/3 vote of the board of directors or trustees and authorized by the vote of the stockholders representing at least 2/3 of the
outstanding capital stock (or, of the members)
D. 2/3 vote of the board of directors or trustees and authorized by the vote of the stockholders representing at least 3/4 of the
outstanding capital stock (or, of the members)
70. It refers to a natural person who is a resident and citizen of the Philippines that has become insolvent.
A. Individual debtor
B. Joint Debtor
C. Resident Debtor
D. Individual Creditor
71. It refers to proceedings initiated by creditors.

A. Involuntary proceedings
B. Voluntary proceedings
C. Creditor’s actions
D. Special proceedings
72. If the liquidator appointed is a juridical entity, it must designate a natural person who possesses all the qualifications and none of
the disqualifications as its representative, it being understood that the juridical entity and the representative are liable to all
obligations and responsibility of the liquidator.
A. Solidarity
B. Individuality
C. Jointly
D. Primarily
73. It refers to a corporation which has control over another corporation either directly or. indirectly through one or more
intermediaries.
A. Parent
B. Mother Unit
C. Subsidiary
D. Holding Company
74. It refers to the restoration of the debtor to a condition of successful operation and solvency, if it is shown that its continuance of
operation is economically feasible and its creditors can recover by way of the present value of payments projected in the plan,
more if the debtor continues as a going concern that if it is immediately liquidated.
A. Rehabilitation
B. Conservatorship
C. Liquidation
D. Dissolution
75. It refers to a plan by which the financial well-being and viability of an insolvent debtor can be restores using various means
including, but not limited to, debt forgiveness, debt rescheduling, reorganization or quasi-reorganization, dacion en pago, debt-
equity conversion and sale of the business (or parts of it) as a going concern, or setting-up a new business entity, or other similar
arrangements as may be approved by the court or creditors.
A. Rehabilitation Plan
B. Restoration Plan
C. Conservatorship Plan
D. Liquidation Plan
76. A stay order is an order to:

First: Suspend all actions or proceedings, in court or otherwise, for the enforcement of claims against the debtor.
Second: Suspend all actions to enforce any judgment, attachment or other provisional remedies against the debtor.
Third: Prohibit the debtor from selling, encumbering, transferring or disposing in any manner any of its properties except in the
ordinary course of business.
Fourth: Prohibit the debtor from making any payment of its liabilities outstanding as of the commencement date except as
otherwise provided.
A. All of them
B. First, Second, and Third only
C. First, Third, and Fourth only
D. Second, Third, and Fourth only
77. First Statement: The rehabilitation receiver has the power to sue and recover, with the approval of the Court, all property or
money of the debtor paid, transferred or disbursed in fraud of the debtor or its creditors, or which constitute under preference of
creditor/s. Second Statement: Unless appointed by the court, the rehabilitation receiver shall not take over the management and
control of the debtor but may recommend the appointment of a management committee over the debtor in the cases provided by
RA10142
A. Both statements are true.
B. Only the first statement is true.
C. Only the second statement is true.
D. None of the statements is true.
78. It is a type of rehabilitation which has been endorsed or approved by creditors holding at least 2/3 of the total liabilities of the
debtor, including secured creditors holding more than 50% of the total secured claims of the debtor and unsecured creditors
holding more than 50% of the total unsecured claims of the debtor.
A. Pre-negotiated rehabilitation
B. Out-of-court rehabilitation
C. Informal restricting agreement
D. Liquidation plan
INSOLVENCY LAW/ CORPORATE REHABILITATION
79. This shall refer to the financial condition of a debtor generally unable to pay its or his liabilities as they fall due
in the ordinary course of business or -has liabilities that are great than its or his assets.
A. Individual debtor
B. Rehabilitation
C. Liquidation
D. Insolvent/Insolvency
80. This refers to the restoration of the debtor to a condition of successful operation and solvency, if it is shown that its continuance
of operation is economically feasible and its creditors can recover by way of the present value of payments projected in the plan,
more if the debtor continues as a going concern than if it is immediately liquidated.
A. Liquidation
B. Rehabilitation
C. Voluntary
D. Rehabilitation plan
81. This shall refer to a plan by which the financial well-being and viability of an insolvent debtor can be restored using various
means or other arrangements as may be approved by the court or creditors.
A. Liquidation
B. Rehabilitation
C. Voluntary proceedings
D. Rehabilitation plan
82. This shall refer to the person or persons, natural or juridical, appointed as such by the court pursuant to the FRIA and which shall
be entrusted with such powers and duties as set forth therein.
A. Rehabilitation receiver
B. Stakeholder
C. Securities market participant
D. Affiliate
83. An individual debtor who, possessing sufficient property to Cover all his debts but foreseeing the impossibility of meeting them
they respectively fall due, may file a verified petition that he be declared in the state of suspension of payments by the court of
the province or city in which he has resided for six (6) months prior to the filing of his petition. He shall attach to his petition the
following except:
A. A schedule of debts and liabilities
B. An inventory of assets
C. A proposed agreement with his creditors
D. Certificate of non-forum shopping
84. The following are true in order for an individual debtor to file a petition for suspension of payment, except:
A. The debtor has sufficient properties to cover all his debts but he foresees the impossibility of meeting his debts when they
respectively fall due
B. The purpose is to suspend or delay the payment of debts
C. The amount of indebtedness is not affected (not reduced or discharged)
D. Answer not given
85. Statement No. 1: In suspension of payments, the debtor is not insolvent. The debtor has sufficient assets to over his liabilities.
Statement No. 2: In liquidation, the debtor is insolvent. His assets are insufficient to cover the debtor’s liabilities.
A. Both are true
B. Both are false
C. First is true, second is false
D. First is false, second is true
86. Statement No. 1: Suspension of payments applies to an individual debtor only.

Statement No. 2: Rehabilitation applies to business organizations, single proprietorship, partnership, and corporations.
A. Both are true
B. Both are false
D. First is false, second is true
87. Excluded from the operation of the FRIA ate the following:
A. Banks and quasi-banks
B. Insurance companies
C. Pre-needed companies
D. All of the above
88. Debtors covered by the FRIA

A. A DTI registered sole proprietorship
B. A SEC registered partnership/ corporation (including GOCCs and non-banking GFIs)
C. An insolvent individual debtor as defined by FRIA
D. All of the above
89. The following are among the minimum requirements included in the petition to initiate voluntary proceedings by a debtor, except:
A. An inventory of all its assets including receivables and claims against third parties
B. A rehabilitation plan
C. Identification of the creditor, its principal activities arid its addresses
D. The names of at least three (3) nominees to the position of rehabilitation, receiver
90. In involuntary liquidation of business organizations, the debt or aggregate of debts must be at least:
A. P1,000,000 or equivalent to 25% of the subscribed capital stock or partners’ contribution, whichever is higher
B. P1000,000
C. 25% of the subscribed capital stock or partners’ contribution
D. P500,000
91. The rehabilitation proceedings shall commence upon the issuance of the Commencement Order, which shall include a Stay or
Suspension Order having the following effects, except:
A. Suspend all actions or proceedings, in court or otherwise, for the enforcement of claims against the debtor
B. Suspend all actions to enforce any judgment, attachment or other provisional remedies against the debtor
C. Prohibit the debtor from selling, encumbering, transferring or disposing in any manner any of its properties except in the
ordinary course of business
D. All of the above
92. The rehabilitation receiver shall have the following minimum qualifications, except:
A. A citizen of the Philippines or a resident of the Philippines in the six (6) months immediately preceding his nomination
B. Of good moral character and with acknowledged in impartiality and independence
C. Is not blind, deaf, or dumb
D. Has no conflict of interest: Provided, That such conflict interest may be waived, expressly or impliedly, by a party who may
be prejudiced thereby
93. The following are some of the contents of a rehabilitation plan except for one:
A. Identify the debtor’s role in the implementation of the Plan
B. Ensure that the payments made under the plan follow the priority established and agreed upon by the parties
C. Include a certified copy of a certificate of tax clearance or evidence of a compromise settlement with the BIR
D. State the compensation and status, if any, of the rehabilitation receiver after the approval of the Plan
94. An informal restructuring agreement or rehabilitation plan that is not necessarily court supervised and that meets the minimum
requirements recognized under the FRIA.
A. Standstill period
B. Out-of-court rehabilitation
C. Cross-border insolvency proceedings
D. Cram down effect
95. The following shall be considered acts of insolvency, except:

A. That such person is about to depart or has departed from the Republic of the Philippines, with intent to defraud his creditors
B. That he conceals himself to avoid the service of legal process for the purpose of hindering or delaying the liquidation or of
defrauding his creditors
C. That for a period of thirty (30) days, he has paid, after demand any moneys deposited with him or received by him in a
fiduciary
D. That an execution having been issued against’ him on final judgment for money, he shall have been found to be without
sufficient property subject to execution to satisfy the judgment
96. This shall refer to all demands of whatever nature or character against the debtor or its property, whether for money or
otherwise, liquidated or unliquidated, fixed or contingent, matured or unmatured, disputed or undisputed.
A. Claim
B. Liabilities
C. Administrative expenses
D. Lien
97. Refers to monetary claims against the debtor, including stockholder’s advances that have been recorded in the debtor audited
financial statements as advances for future subscriptions
A. Lien
B. Administrative expenses
C. Claim
D. Liabilities
98. Refers to a statutory or contractual claim or judicial charge on real or personal property that legality entities a creditor to resort to
said property for payment of the claim or debt secured by such.
A. Encumbered property
B. Lien
C. Insolvent debtor’s estate
D. Possessory lien
99. In appointing a receiver, the court should consider whether the company’s financial situation is serious and whether there is clear
and imminent danger that it will lose its corporate assets if a receiver is not appointed. This is called:
A. Business judgment rule
B. “Close now, hear later” doctrine
C. Jason clause
D. Serious situation test
BOUNCING CHECKS
100. The crime of estafa by issuing a check has the following elements. Which among the following is not included:
A. Existence of a contract between the parties
B. Postdating or issuance of a check in payment of an obligation contracted at the time the check was issued
C. Insufficiency of funds to cover the check
D. Damage to the payee
101. Statement No. 1: A single act can give rise to several offenses, such as estafa and violation of B.P. 22.
Statement No. 2: Unlike estafa, under B.P. 22 one need not prove that the check was issued in payment of an obligation, or that
there was damage; the damage done is to the banking system.
A. First is true, second is false
B. First is false, second is true
C. Both are true
D. Both are false
102. Purpose of B.P 22 or the Bouncing Checks Law:
A. B.P. 22 was devised to. safeguard the interest of the banking system and the legitimate public checking account user
B. B.P. 22 was purposely enacted to prevent the proliferation of worthless checks in the mainstream of daily business
C. The purpose of ¡IP. 22 in declaring the mere issuance of a bouncing check as malum prohibiturn is to punish the offender in
order to deter him and others from committing the offense.
D. All of the above
103. A stale check is a check:

A. That cannot anymore be paid although the underlying obligation still exists
B. That cannot anymore be paid and the underlying obligation under the check is also extinguished
C. That can still be negotiated or indorsed so that whoever the holder can claim payment therefrom
D. Which has not been presented for payment within a period of 30 days
104. The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds
presented within 90 days from the date of the check, shall prima facie evidence of knowledge of such insufficiency of funds.
Which among the following is an exception to the foregoing statement:
A. When the maker or drawer issues another check in favor of the holder thereof
B. Makes arrangements for payment in full by the drawee of such check within 5 banking days after receiving notice that such
check has not been paid by the drawee
C. When the maker or drawer pays the holder thereof half of the amount due thereon
D. Makes arrangements for partial payment by the drawee of such check within 5 banking days after receiving notice that such
check has not been paid by the drawee
105. Statement No. 1: Any person who makes or draws and issues any check knowing at the time of issue that he does not have
sufficient funds with the drawee bank, or having sufficient funds but fails to keep sufficient funds to cover full payment of the
check presented, shall be punished by imprisonment or by fine or both such fine and imprisonment at the discretion of the court.
Statement No. 2: Where the check is drawn by a corporation, company or entity, the company manager, secretary, and treasurer
shall be deemed liable under B.P. 22
A. Both are true
B. Both are false
D. Second is true, first is false
106. This is construed to mean an arrangement with the bank for the payment of such check.
A. Funds
B. Liability
C. Deposit
D. Credit
107. It shall be the duty of the drawee of any check, when refusing to pay the same to the holder thereof upon presentment, to cause
to be written, printed, or stamped in plain language thereon, or attached thereto, the reason for drawee’s dishonor or refusal to
pay the same: Provided,
A. That where there are no sufficient funds in drawee bank, such fact shall not be explicitly stated in the notice of dishonour or
refusal
B. That where there are no sufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the
notice of dishonour or refusal
C. That where there are no sufficient funds in or credit with such drawee bank, such fact shall only be stated in the notice of
dishonour or refusal if allowed by company bank practice
D. That where there are no sufficient in or credit with such drawee bank, such fact shall only be stated in the notice of
dishonour or refusal upon prior agreement
108. In all prosecutions under B.C 22, the introduction in evidence of any unpaid and dishonored check, having the drawee’s refusal
to pay stamped or written thereon or attached thereto, with the reason therefore as aforesaid, shall be:
A. Conclusive Evidence
B. Substantial Evidence
C. Prima Facie Evidence
D. Circumstantial Evidence
109. Statement No. l ‘The offense under B.P 22 is a continuing offense and may therefore be prosecuted within the territory where
any of the elements have been committed.
Statement No. 2: Each act of drawing and issuing of a bounced check constitutes a violation of B.P 22.
A. Both are true
B. Both are false
C. First is true, Second is false
D. Second is true, First is false
110. Under the provision of B.P 22, an offense is committed when the following elements are present, except:
A. Making, drawing, and issuance of any check to apply for account or for value
B. Knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the
drawee bank for the payment of such check in presentment
C. Subsequent dishonour of the check by the drawee bar insufficient of funds or credit or dishonour for the same reason had
not the drawer ordered the bank to stop payment
D. Failure to inform the payee of such circumstance
111. Statement No. 1: A postdated check can be dishonored if presented for payment before its due date.
Statement No. 2: Uncollected deposits are not the same as insufficient funds.
A. Both are true
B. Both are false
112. Statement No. 1: The notice of dishonour to maker of a check may be in writing or a mere oral notice.
Statement No. 2: Inaccuracy of description of dishonored checks in the written notice of dishonour is a-fatal defect.
A. Both are true
B. Both are false
PDIC LAW
113. The following arc the three main functions of PDIC, except:
A. Deposit insurer
B. Receiver/liquidator of distressed banks
C. Loan functions
D. Co-regulator of the BSP over banking institutions
114. An employee of a large manufacturing firm earns a salary which is just a bit more than what he needs for a comfortable living.
He is thus able to still maintain a P10, 000 savings account, a P20,000 checking account, a P30,000 money market placement,
and a P40,000 trust fund in a medium-sized commercial bank. Which of the four accounts are deemed insured by the PDIC:
A. The P10,000 savings account and the P20,000 checking account
B. The P30,000 money market placement and the P40,000 trust fund
C. The P10,000 savings account and the P30,000 money market placement
D. The P20,000 checking account and the P40,000 trust fund
115. X is a depositor for AAA Bank. She has three (3) deposit accounts all under her name. One, in checking account, one in saving
account and another one in time deposit account. Each account has a balance of P250,000. AAA Bank became insolvent.
Philippine Deposit Insurance Corporation closed the Bank. X therefore is unable to withdraw from all of the accounts. She then
filed her claims with the Philippine Deposit Insurance Corporation. Which statement is most accurate?
A. X can claim a total of P500,000 for all the three (3) accounts
B. X can only claim from (1) account of P250,000
C. X can claim a total of P750,000 from all the three (3) accounts
D. X cannot claim anything from any deposit accounts
116. The amount due to any bona fide depositor for legitimate deposits in an insured bank net of any obligation of the depositor to the
insured bank as of the date of closure, but not exceed Five Hundred Thousand Pesos (P500,0001).
A. Deposit
B. Insured Deposit
C. Transfer Deposit
D. Trust Funds
117. Statement No. 1: A joint account shall be insured separately from any individually-owned deposit account.
Statement No. 2: Membership of banks to PDIC is mandatory; hence, all operating banks are members of PDIC.
A. First is false, Second is true
B. Second is false, First is true
C. Both are false
D. Both are true
118. The PDIC shall not pay deposit insurance for the accounts or transactions, except for:
A. Deposit account which are unfunded, fictitious or fraudulent
B. Deposit products constituting or emanating from unsafe and unsound banking practices
C. Deposit accounts that resulted from splitting of deposits
D. Foreign currency deposits
119. What is PDIC’s maximum deposit insurance coverage?

A. P150,000
B. P1,000,000
C. P500,000
D. P250,000
120. This occurs whenever a deposit account with an outstanding balance of more than the statutory maximum amount of insured
deposit maintained under the name of persons is broken down and transferred to two or more accounts in the name of persons
or entities who have no beneficial ownership on transferred deposits in their names within 120 days immediately preceding or
during a. bank-declared bank holiday, or immediately preceding a closure order issued by the Monetary Board for the purpose of
availing of the maximum deposit insurance coverage.
A. Inter-Branch deposits
B. Transfer deposits
C. Splitting of deposits
D. Insured deposits
121. This means the unpaid balance of money. or its equivalent, received by a bank in the usual course of business and for which is
has given or is obliged to give credit to a commercial, checking, savings, time or thrift account.
A. Insured deposit
B. Deposit
C. Transfer deposit
D. Trust fund
122. This refers to the possibility, that failure of one bank to settle net transactions with other banks will trigger a chain reaction,
depriving other banks of funds leading to a general shutdown of normal clearing and settlement activity.
A. Assumption of risk
B. Systematic risk
C. Clearing risk
D. Transaction risk
123. The following are powers of the PDIC, except for:

A. Power of examination of banks
B. Power to secure corrective actions from the Monetary Board
C. Power to underwrite and advance costs of litigation
D. Power to exercise taxation and eminent domain
124. Statement No. I: The PDIC is exempted from income tax, final withholding tax, value-added tax on assessments collected from
member banks, and local taxes.
Statement No. 2: For purposes of meeting its insurance purposes and its financial assistance functions, PDIC is authorized to
borrow from BSP.
A. Both are true
B. Both are false
125. PDIC covers only:

A. The risk of a bank closure ordered by the Monetary Board
B. Bank losses due to theft, fire, fortuitous events, force majeure
C. Closure by reason of strike or existence of public disorder revolution or civil war
D. Answer not given
126. Statement No. 1: Deposit insurance Coverage is not determined on a per-account basis.
Statement No. 2: Deposits in different banking institutions are not insured separately.
A. Both are true
B. Both are false
127. The depositor of the closed insured bank has months from date of bank takeover to file his deposit insurance claim.
A. 6
B. 12
C. 24
D. 36
128. What happens when the depositor of a closed bank fails to file his claim within the 24-month period>
A. All the rights of the depositor with respect to insured deposit shall be honored only after successfully filing for an extension
within 6 months from the lapse of the 24-month reglementary period.
B. All rights of the depositor with respect to the insured deposit shall no longer be honored. But he may still make a claim
against the assets of the closed bank.
C. All rights of the depositor with respect to the insured deposit shall no longer be honored and he shall be barred from making
a claim against the assets of the closed bank.
D. All rights of the depositor with respect to the insured deposit shall still be honored, but he may only make a claim against the
assets of the closed bank.
129. The following are required to file deposit insurance claims, except:
A. Depositors who have outstanding obligations with the closed bank regardless of amount of depositors
B. Depositors with account balances of less than P 100,000 who have no updated addresses in the bank records or who have
not updated their addresses through the Mailing Address Updated Form (MAUF) issued by the PDIC.
C. Depositors who maintain their accounts u rider the name of business entities, regardless of type of account and account
balance.
D. Answer not given
130. Statement No. 1: Inter-branch deposits are not covered by deposit insurance.
Statement No. 2: The liability of the PDIC for insured deposits rests upon the existence of deposits with insured bank, not on the
negotiability or non-negotiability of the certificates evidencing these deposits.
A. First is true, Second is false
B. Second is true, First is true
C. Both are false
D. Both are true
131. This is the stage within which the PDIC manages the affairs of the closed bank and preserves its assets for the benefit of
creditors:
A. Receivership
B. Liquidation
C. Examination
D. Rehabilitation
132. This refers to the recovery and conversion of assets into cash for distribution to all creditors in accordance with the order of
creditor preference pursuant to law:
A. Receivership
B. Liquidation
C. Examination
D. Rehabilitation
133. This following are powers of the PDIC as a corporate body, except:
A. To adopt and use a corporate seal
B. To have succession
C. To make contracts
D. Answer not given
SECRECY OF BANK DEPOSITS AND UNCLAIMED BALANCES LAW
134. All deposits with banks or banking institutions in the country are confidential, and may not be examined or looked into by any
person, government, official, bureau, or office. 1-lowever, it does provide exemptions:
A. The depositor gives written permission
B. Cases of impeachment
C. Cases where the money deposited or invested is the subject matter of the litigation
D. All of the above
135. Deposits that have .become dormant for a period of ____ years may be escheated in favor of the government.
A. 10 years
B. 15 years
C. 20 years
D. 25 years
136. X, a private individual, maintains a dollar deposit with ABC Bank. X is suspected to be the leader of a Kidnap for Ransom Gang
and he is suspected of depositing all ransom money in said deposit account which are all in US Dollars. The police want to open
said account to know if there are really deposits in big amounts. Which statement is most accurate?
A. An approval from the Monetary Board is necessary to open account
B. The same rules under secrecy of Bank Deposit Act will apply
C. Because the deposit is in US Dollars, it is covered by the Foreign Currency Deposit Act which allows disclosure only upon
written permission of the depositor
D. Approval from the court is necessary to order disclosure of the account
137. The Bank Secrecy Law (RA 1405) prohibits disclosing any information about deposit records of an individual without court order
except:
A. In an investigation by the Ombudsman
B. In an investigation for violation of anti-Graft and Corrupt Practices
C. In an examination to determine gross estate of a decedent
D. In an impeachment proceeding
138. Which of the following is an exception to the secrecy of bank deposits which are in the Philippine Pesos, but NOT an exception
to the secrecy of foreign currency deposits?
A. Upon Bangko Sentral ng Pilipinas (SSP) inquiry into or examination of deposits or investments with any bank, when the
inquiry or examination is made in the course of the SSP’s periodic special examination of said bank to ensure compliance
with the Anti-Money Laundering Act (AMLA)
B. Upon Philippine Deposit Insurance Corporation (PDIC) and SSP inquiry into an examination of deposit accounts in case
there is a finding of unsafe or unsound banking practice
C. Upon inquiry by the Commissioner of Internal Revenue in the event a taxpayer files an application to compromise his tax
liabilities on the ground of financial incapacity
D. Upon inquiry in cases of impeachment
139. ____ include credits or deposits of money, bullion, security or other evidence of indebtedness of any kind, and interest thereon
with banks, buildings and loan associations, and trust corporations, as hereinafter defined, in favor of any person known to be
dead or who has not made further deposits or withdrawals during the preceding ten years of more.
A. Peso deposits
B. Foreign currency deposits
C. Deposit insurance
D. Unclaimed balances
140. Statement No. 1: Publication of the list of unclaimed balances is intended to safeguard the right of depositors, their heirs and
successors to due process.
Statement No. 2: Initially, there should be notice to the depositor of the unclaimed balance.
A. First is true, Second is false
B. Second is true, First is false
C. Both are true
D. Both are false
141. Within the month of January of every odd year, all banks, building and loan associations, and trust corporations shall forward to
the Treasurer of the Philippines a statement, under oath, of their respective managing officers, of all credits and deposits held by
them in favor of persons known to be dead, or who have not made further deposits or withdrawals during the preceding ten years
or more, arranged in alphabetical order according to the names of creditors and depositors, EXCEPT:
A. The names and last known place of residence or post office addresses of the persons in whose favor such unclaimed
balances stand
B. The publication of a list of such unclaimed balance and the amount thereof
C. The amount and the date of the outstanding unclaimed balance and whether the same is in money or in security, and if the
latter, the nature of the same
D. The date when the person in whose favor the unclaimed balance stands died, if known, or the date when lie made his last
deposit or withdrawal
142. Statement No. 1: Money-market placement is not covered by R.A 1405 because it is not deposited in a bank.
Statement No. 2: A co-payee in a check deposited in a bank is, likewise a co-depositor thereof; no written consent of other co-
payee is necessitated in an inquiry of the deposits by the said co-depositor.
A. Both are true
B. Both are false
143. Statement No. 1: Demand drafts cannot be escheated but telegraphic notes can be escheated.
Statement No. 2: The unclaimed balances may be subject or escheat proceedings, after proper publication and the depositors
still do not lay claim them.
A. Both are false
B. Both are true
C. First is false, Second is true
D. Second is false, First is true
GENERAL BANKING LAW
144. Entities engaged in the lending of funds obtained in the form of deposits from the public.
A. Pawnshop
B. Lending institutions
C. Investment company
D. Banks
145. Entities engaged in the borrowing of funds through the issuance, endorsement or assignment with recourse or acceptance of
deposit substitutes for purposes of relending or purchasing or receivables and other obligations
A. Banks
B. Quasi-Banks
C. Commercial Banks
D. Universal Banks
146. Banks that has authority to exercise, in addition to the powers and functions of commercial banks, powers of an investment
house and the power to invest in non-allied enterprises.
A. Cooperative banks
B. Universal banks
C. Rural banks
D. Thrift banks
147. Banks that are given all such power necessary to engage in commercial banking in addition to general corporate powers.
A. Universal banks
B. Quasi-banks
C. Cooperative banks
D. Commercial banks
148. Banks that are created to make needed credit available and accessible in the rural areas for the purpose comprehensive rural
development.
A. Islamic banks
B. Thrift banks
C. Quasi-banks
D. Rural banks
149. These include savings and mortgage banks, private development banks, and stock savings and loan associations.
A. Thrift banks
B. Cooperative banks
C. Rural banks
D. Quasi-banks
150. Banks that primarily provides financial, banking and credit services to cooperative organizations and its members.
A. Commercial banks
B. Universal banks
C. Cooperative banks
D. Quasi-banks
151. The bank created under R.A 6848 to promote and accelerate the socio-economic development of the Autonomous Region by
performing banking, financing and investment operations and to establish and participate in agricultural, commercial and
industrial ventures based on the Islamic concept of banking.
A. Islamic banks
B. Rural banks
C. Thrift banks
D. Quasi-banks
152. Persons or entities whose principal functions include the lending, investing or placement of funds or evidences of indebtedness
or equity deposited with them, acquired by them, or otherwise coursed through them, either for their own account or for the
account of others.
A. Banks
B. Quasi banks
C. Financial intermediaries
D. Commercial banks
153. This bank was conceived and created as private commercial bank owned by the Filipino veterans of World War II and deeply
imbued and impressed with public interest.
A. Philippine Veterans Bank
B. Land Bank of the Philippines
C. Development Bank of the Philippines
D. United Coconut Planters bank
154. Created to finance the acquisition and distribution of all agricultural estates for division and resale to small landlords as purchase
of the landholding by the agricultural lessee.
A. United Coconut Planters Bank
D. Bangko Sentral ng Pilipinas
155. It’s primary purpose is to provide banking services principally to cater to the medium and long-term needs of agricultural and
industrial enterprises with emphasis on small and medium- scale enterprises.
A. Bangko Sentral ng Pilipinas
B. United Coconut Planters Bank
D. Land Bank of the Philippines
156. Refers to a branch, subsidiary or affiliate of a foreign banking corporation duly authorized by BSP to transact offshore banking
business in the Philippines.
A. Foreign banks
B. Allied enterprises
C. Financial intermediaries
D. Off-shore banking unit
LOANS (UNDER GENERAL BANKING LAW)
157. Loans, other credit accommodations and guarantees shall exclude:

A. Loans and other credit accommodations secured by obligations of the Bangko Sentral or of the Philippine Government
B. Loans and other credit accommodations covered by assignment of deposits maintained in the lending bank and: held in
Philippines
C. Loans, credit accommodations and acceptances under letters of credit to the extent. covered by margin deposits
D. All of the above
158. The total of loans, credit accommodations and guarantees that may be extended by a bank to any other person, partnership,
association, corporation or other entity shall at no time exceed 25% of the net worth of such bank
A. Single Borrower’s Limit
B. Ceiling
C. DOSRI accounts
D. Loan
159. The single borrower’s limit (SBL) provides that the total amount of loans, credit accommodations and guarantees that may be
extended by a bank to any person, partnership, association, corporation or other entity shall at no time exceed ____ of the net
worth of such bank.
A. 20%
B. 25%
C. 30%
D. 35%
160. The total amount of loans, credit accommodations and guarantees may be increased by an additional ____ of the net worth of
such bank provided the additional liabilities of any borrower are adequately secured by trust receipts, shipping documents,
warehouse receipts or other similar documents transferring or securing title covering readily marketable, non-perishable goods
which must be fully covered by insurance.
A. 15%
B. 12%
C. 10%
D. 6%
161. The prescribed ceilings for SBL shall include:

A. The direct liability of the maker or acceptor of paper discounted with or sold to such bank and the liability of general
endorser, drawer or guarantor who obtains a loan or other credit accommodation from or discounts paper with or sells
papers to such bank
B. In the case of an individual who owns or controls a majority interest in a corporation partnership, association or any other
entity, the liabilities of said entities to such bank
C. In the case of a corporation, all liabilities to such ban of all subsidiaries in which such corporation owns or controls a majority
interest
D. All of the above
162. Even if a parent corporation, partnership, association, entity or an individual who owns or controls a majority interest in such
entities has no liability to the bank, the Monetary Board may prescribe the combination of the liabi1ities of subsidiary
corporations or members of the partnership, association, entity or such individual under certain circumstances, including but not
limited to any of the following situations:
A. The parent corporation, partnership, association, entity or individual guarantees the repayment of the liabilities
B. The liabilities were incurred for the accommodation of the parent corporation or another subsidiary or of the partnership or
association or entity or such individual
C. The subsidiaries through separate entities operate merely as departments or divisions of à single entity
D. All of the above
163. Statement No. 1: A bank shall grant loans and other credit accommodations only in amounts and for the periods of time essential
for the effective completion of the operations to be financed.
Statement No. 2: Dealings of a bank with any of its directors, officers or stockholders and their related interests shall be upon
terms less favorable to the bank than those offered to others.
A. Both are true
B. Both are false
C. First is false, Second is true
D. Second is false, First is true
164. Outstanding loans and other credit accommodations, deferred letters of credit less margin deposits and guarantees. Except as
specifically provided, total credit commitment shall be reckoned on credit risk-weighted basis consistent with existing regulations
A. Total credit commitment
B. Single borrower’s limit
C. DOSRI account
D. Classified loans
165. The following are requisites for the restrictions on bank exposure to DOSRI accounts, except:
A. The borrower is a director, officer, or any stockholder of a bank and related interest
B. He contracts a loan or any form of financial accommodation
C. The loan or financial accommodation is from an insurance company
D. The loan or financial accommodation is in excess of capital and surplus of the lending bank or in the maximum amount
permitted by law, whichever is lower
166. Dealings of a bank with any of its DOSRI shall be upon terms not less favorable to the bank than those offered to others.
A. Aggregate ceilings
B. Arms length rules
C. Individual ceilings
D. Reportorial requirement
167. The monetary board may regulate the amount of loans, credit accommodations and guarantees that may be extended, directly or
in directly, by a bank to its DOSRI, as well as investments of such bank in enterprises owned or controlled by said DOSRI.
A. Individual ceilings
B. Reportorial requirement
C. Aggregate ceilings
D. Procedural requirement
168. The outstanding loans, credit accommodations and guarantees extended to DOSRI shall be Limited to an amount equivalent to
their respective unencumbered deposits and book value of their paid-in capital contribution in the bank.
A. Arms length rule
B. Aggregate ceilings
C. Ceiling on unsecured loans
D. Individual ceiling
ANTI-MONEY LAUNDERING ACT
169. Covered Persons supervised or regulated by BSP are the following, except:
A. Foreign exchange dealers
B. Money changers
C. Pawnshops
170. Covered Persons supervised or regulated by Insurance Commission are the following except:
A. Insurance companies
B. Holding companies
C. Insurance agents
D. Real Estate Brokers
171. Covered Persons supervised or regulated by SEC are the following:

A. Securities, dealers, brokers, salesmen, investment houses, and other similar persons managing securities or rendering
services, such as investment agents, advisors, or consultants
B. Mutual funds or open-end investment companies, close-end investment companies or issuers, and other similar entities
C. Other entities, administering or otherwise dealing in commodities, or financial derivatives based thereon, valuable objects,
cash substitutes, and other similar monetary instruments or properties, supervised regulated by the SEC
D. All of the above
172. “Suspicious Transaction refers to a transaction, regardless of amount, where any of the following circumstances exists, except:
A. There is no underlying legal or trade obligation, purpose or economic justification
B. The client is properly identified
C. The amount involved is not commensurate with the business or financial capacity of the client
D. Taking into account all known circumstances, it may be perceived that the client’s transaction is structured in order to avoid
being the subject of reporting requirements under the AMLA
173. “Covered transaction” refers to:

A. A transaction in cash or other equivalent monetary instrument exceeding Five Hundred Thousand Pesos (P500,000)
B. A transaction exceeding One Million Pesos (P1,000,000) in cases of jewelry dealers in precious metals and dealers in
precious stones
C. All of the above
174. “Unlawful Activity” refers to any act or omission, or series or combination thereof, involving or having direct relation, to the
following, except”
A. Kidnapping for Ransom
B. Plunder
C. Robbery and Extortion
175. (1) Covered institutions shall maintain accounts only in the true account owner or holder. The provisions of existing laws to the
contrary notwithstanding, anonymous accounts, accounts under fictitious names, incorrect name accounts and all other similar
accounts shall be ABSOLUTELY prohibited.
(2) When a covered institution acquires the business of another covered institution, either in whole or as a product portfolio, it is
NOT NECESSARY for the identity of all existing customers to be re-established: Provided, that all customer account records are
acquired with the business and due diligence inquiries do not raise any doubt as to whether or not the acquired business has
fully complied with all the requirements business has fully complied with all the requirements under the AMLA and these Rules.
A. Statement 1 is true, Statement 2 is false
B. Statement 1 is false, Statement 2 is true
C. Both statements are true
D. Both statements are false
NEW CENTRAL BANK ACT
176. The State’s central monetary authority charged with the responsibility of administering the monetary, banking and credit system
of the country and is granted the power of supervision and examination over bank and non-bank financial institutions performing
quasi-banking functions, including savings and loan associations.
A. Bangko Sentral ng Pilipinas
D. National Treasury
177. The following are roles of the BSP, except for:

A. Banker of the Government
B. Representation with the National Treasury
C. Representation with the ÌMF
D. Fiscal Operations
178. The following are BSP privileges and prohibitions, except for:
A. Tax exemption
B. Phase-out of Fiscal Agency Function
C. Non-exemption from Custom Duties
D. Phase-out of Regulatory Powers over the Operations of Finance Corporations and other Institutions
179. All noted and coins issued by the Bangko Sentral shall be fully guaranteed by the Government of the Republic of the Philippines
and shall be legal tender in the Philippines for all debts, both public and private.
A. Purchasing power
B. Legal character
C. Interconvertibility of currency
D. Legal tender power
180. Unless otherwise fixed by the Monetary Board, coins shall be legal tender in amounts not exceeding _____ for denominations of
twenty-five centavos and above, and in amounts not exceeding _____ for denominations of ten centavos or less.
A. P50, P20
B. P20, P50
C. P100, P50
D. P50, P25
181. Checks representing demand deposits do not have legal tender power and their acceptance in the payment of debts, both public
and private, is at the option of the creditor: Provided, however, that a check which has been cleared and credited to the account
of the creditor shall be equivalent to a delivery to the creditor of cash in an amount equal to the amount credited to his account.
A. Legal tender power
B. Legal character
C. Interconvertibility of currency
D. Purchasing power
182. The following are grounds for conservatorship for a bank or quasi-bank, except for:
A. A state of continuing liability
B. Unwillingness to maintain a condition of liquidity deemed adequate to protect the interest of depositors and creditors
C. The bank has willfully violated a cease and desist order
D. Answer not given following are powers of a conservator, except:
183. The following are powers of a conservator, except:

A. To take charge of the assets, liabilities, and the thereof
B. To reorganize the management of the subject bank
C. To collect all monies and debts
D. To issue a cease and desist order
184. The following arc grounds for receivership and liquidation, except for:
A. The bank is unable to pay its liabilities as they become due in the ordinary course of the business
B. The bank has insufficient realizable assets
C. The bank cannot continue operating without involving probable losses to its depositors or creditors
D. Answer not given
185. The following are the function and obligations of a receiver, except for one:
A. The receiver shall immediately gather and take charge of all assets and liabilities of the institution, administer the same for
the benefit of its creditor
B. The receiver may deposit or place the funds of the institution in non-speculative investments
C. The receiver shall determine as soon as possible, but not later than 90 days from takeover, whether the institution may be
rehabilitated or otherwise
D. The receiver shall pay or commit any act that will involve the transfer or disposition of any asset of the institution
186. No prior hearing is necessary in appointing a receiver and in closing the bank. it is enough that subsequent judicial review is
provided for.
A. Close now-hear later scheme
B. Conservatorship
C. Receivership and Liquidation
D. Closure
187. The following mandatory requirements for bank closure, one is incorrect:
A. Examination by the appropriate BSP department condition of the bank
B. Examination showing that the condition of the bank is one insolvency, or that its continuance in business would involve
probable loss to its depositors or creditors
C. Director shall inform the Monetary Board (MB) in writing of such fact
D. Within 90 days, the MB shall determine and confirm if the bank is insolvent, and if public interest requires, shall order the
liquidation of the bank
188. The following are the effects of receivership and liquidation, except for:
A. The assets of an institution under receivership or liquidation shall be deemed in custodial legis in the hands of the receiver
and shall be exempt from any order of garnishment, levy, attachment, or execution
B. There will be no preference even if the claimant-depositor obtained writ of preliminary attachment
C. The appointment of a receiver does not dissolve the corporation nor does it interfere with the exercise of corporate rights
D. Interest on loans extended by the BSP are no longer demandable
189. All Philippine notes and coins issued or circulating in accordance with the provisions of the NCBA.
A. Legal tender
B. Money
C. Cash
D. Currency
190. An alternative form of obtaining funds from the public, other than deposits, through the issuance, endorsement, or acceptance of
debt instruments for the borrower’s own account, for the purpose of relending or purchasing of receivables and other obligations.
A. Demand deposits
B. Peso deposits
C. Emergency loans and advances
D. Deposit substitutes
191. All those liabilities of the Bangko Sentral and of other banks which are denominated in Philippine currency arid are subject to
payment in legal tender upon demand by the presentation of checks.
A. Peso deposits
B. Deposit substitutes
C. Open market operations
D. Demand deposits
INTELLECTUAL PROPERTY LAW (R.A. 8293)
192. What is a well-known mark?

A. A mark that is popular and known all over the world
B. A mark that is declared by a competent and authoritative business based on its profitability
C. A mark which is declared as such by a judge based on a certain given criteria
193. When may a mark that is identical with, or confusingly similar to, or constitute a translation of a mark considered well-known in
Section 123.1, par. E, which is registered on the Philippines, be registrable?
A. When the goods or service are similar to those with respect to which registration is applied for
B. Never registrable
C. When the goods or services are not similar to those with respect to which registration is applied for
D. Always registrable
194. Any visible sign capable of distinguishing goods or services of an enterprise and shall include a stamped or marked container of
goods would be a:
A. Logo
B. Lay-out Design
C. Geographical Indications
D. Trademark
195. The term id Broadcast is:

A. Fifty (50) years from the end of the year which they took place
B. Thirty (30) years from the end of the year they took place
C. Twenty (20) years from the date they took place
196. How may the rights in a mark be acquired?

A. Trademark rights are acquired through intellectual creation
B. Trademark rights are acquired through registration
C. Trademark rights are acquired from the moment of creation
D. Trademark rights are acquired through first use and adoption of mark
197. The term of protection of works of applied arts is:

A. Lifetime of the author, plus fifty (50) .years after his death
B. Twenty-five (25) years from the date of making
C. Fifty (50) years from the date of publication, and if unpublished, from the date of making
198. The term protection for copyrighted works under Section 172 and 73 is:
A. Lifetime of the author, plus fifty (50) years after his death
B. Twenty-five (25) years from the date of making
C. Fifty (50) years from the date of publication, and if unpublished, from the date of making
199. Copyrightable works are protected

A. After examination
B. From the moment of creation
C. Upon registration
D. Upon adoption
200. In the case of work created by an employee during and in the course of his employment, ownership of copyright shall be
determined based on:
A. Whether or not there is an agreement by the parties
B. Whether or not the creation of the object of copyright is part of his regular duties
C. Whether or not the employee used the time, facilities and materials of the employer
201. Any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially
applicable shall be patentable. It may be, or may relate to, a product, or process, or an improvement of any of the foregoing.
A. Lay-out Design
B. Patentable Inventions
C. Work of Applied Art
D. Utility Model
202. An application for patent filed by any person who has previously applied for the same invention in another country which by
treaty convention, or law affords similar privileges to Filipino citizens, shall be considered ad filed as of the date of filing the
foreign application:
A. The local application expressly claims priority
B. It is filed within twelve (12) months from the date the earliest foreign application was filed
C. A certified copy of the foreign application together with an English translation is filled with six (6) months from the date of
filing in the Philippines
D. All of the above
203. The term o a patent shall be “____” years from the filing date of the application
A. Ten (10)
B. Fifteen (15)
C. Twenty (20)
D. Twenty-five (25)
204. Any interested person may, upon payment of the required fee, petition to cancel the patent or any claim thereof, or parts of the
claim, on any of the following grounds, except:
A. That what is claimed as the invention is not new or patentable
B. That the patent does not disclose then invention in a manner sufficiently clear and complete for it to be carried out by any
person skilled in the art
C. That the patent is contrary to public order or morality
D. The invention forms part of a prior art
205. (1) Any prior user, who, in good faith was using the invention or has taken serious preparations to use the invention in his
enterprise or business, before the filing date or priority date of on which a patent is granted, shall have the right to the use
thereof envisaged in such preparations within the territory where the patent produces it’s effect
(2) The right of the prior user may only be transferred or assigned together with his enterprise or business, or with that part of
his enterprises in which the use or preparations for use have been made
A. Statement 1 is true, Statement 2 is false
B. Statement 2 is true, Statement 1 is false
C. Both statements are true
D. Both statements are false
206. A Government agency or third person authorized by the government may exploit the invention even without agreement of the
patent owner where:
A. The public interest, in particular, national security, nutrition, health or the development of other sectors, as determined by the
appropriate agency of the government, so requires
B. A judicial or administrative body has determined that the manner of exploitation, by the owner of the patent or his licensee is
anticompetitive :
C. Both a and b

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ACCOUNTING INTEGRATION PART 3

BLT MODULE RBR BACAY, CPA, MBA

1. Which of the following is not a characteristic of sale?

2. A characteristic of a Contract of Sale which involves exchange of value

3. Dacion en Pago as distinguished from sale

4. Sale is distinguished from dation in payment in that is a sale:

9. Which of the following may not be object of a contract of sale?

10. There is not be a valid object of sale

20. A case where a contract of sale must not necessarily be in writing

21. Which is not correct? In a sale by auction

22. Which of the following statement is incorrect?

26. Which of the following obligations of the vendor cannot be waived?

28. Which of the following is considered s an actual delivery?

29. Which of the following is not constructive delivery in sale?

a. Both statements are true

40. The Recto Law is applicable on:

46. Which of the following statement is false:

a. 1st statement true, 2nd statement false

57. Warranty against hidden defect is:

63. One of the following is not a remedy granted to an unpaid seller.

65. Which of the following statement is not correct?

2nd Statement: payment of price is essential to delivery of the thing sold.

74. Which of the following statements is not correct?

83. Pacto de retro sale is distinguished from mortgage:

85. The sale shall not be presumed to be an equitable mortgage when?

2. Which of the following is not a characteristic of an agency?

3. Statement 1: a contract is needed to have an agency relationship

Which of the above statements is true?

6. The following distinguished agency from a negotiorum gestio except

7. All of the following are characteristics of an agency to sell, except

8. In agency, the agent represents

12. Which of the following does not create an implied agency?

14. The is not implied agency in the following

18. The following statements pertain to the appointment of an agent

In your evaluation of the foregoing statements:

a. Both statements are true

25. A appoints B to sell his land.

32. Which of the following constitute an act of strict domination or ownership?

34. Which of the following statement is true?

37. A special power to sell includes the power to

39. Which of the following contracts is void?

a. 1st contact only

49. One of the following is not a requisite if agency by necessity.

a. Yes to 1st Question; No to 2nd Question

63. A guarantee commission agent

64. Features of guarantee commission agent. Which is the exception?

a. Only 1st is correct

74. Agent is not extinguished by

80. Which of the following is not fundamental obligation of an agent?

84. One of the following is not an obligation of an agent?

85. The principal is not liable to expenses incurred by the agent

86. The principal is liable to expenses incurred by the agent

a. Both are True

No. 2: Agency by operation of law is synonymous “presumed agency” or “tacit agency”

a. Both statements are true

3. Which is not characteristic of pledge?

a. Both statements are false

5. One of the following is not a common characteristic of pledge and mortgage?

6. Which of the following is not a common requisite to pledge and mortgage?

7. Which of the following is not an essential requisite to pledge and mortgage?

14. Real property may be the object of pledge.