C

COOPERATIVES
Multiple Choice Questions

Law 505 – FUEGO BATCH

2018 - 2019
 COOPERATIVES (1)

1) The Cooperative Code of 2008 is known as:

a) RA 9250
b) RA 9525
c) RA 9520
d) RA 9252

2) What is a cooperative?
a) A cooperative is an independent and duly registered association of persons, with
a common bond of interest, who have voluntarily joined together to achieve their
social, educational, economic, and cultural needs and aspirations by making
equitable contributions to the capital required, patronizing their products and
services and accepting a fair share of the risks and benefits of the undertaking in
accordance with universally accepted cooperative principles.
b) A cooperative is an autonomous and duly registered association of persons,
with a common bond of interest, who have voluntarily joined together to
achieve their social, economic, and cultural needs and aspirations by
making equitable contributions to the capital required, patronizing their
products and services and accepting a fair share of the risks and benefits of
the undertaking in accordance with universally accepted cooperative
principles.
c) A cooperative is an autonomous and duly registered association of persons, with
a common bond of capital, who have voluntarily joined together to achieve their
social, economic, and cultural needs and aspirations by making equitable
contributions to the capital required, patronizing their products and services and
accepting a fair share of the risks and gains of the undertaking in accordance with
universally accepted cooperative principles.
d) A cooperative is an autonomous and duly registered association of persons, with
a common bond of interest, who have voluntarily joined together to achieve their
social, economic, and cultural needs and aspirations by making equitable
contributions to the capital required, patronizing their products and services and
accepting a fair share of the risks and benefits of the undertaking in accordance
with universally accepted accounting principles.

3) Which of the following is not a cooperative principle?

a) Equal opportunity
b) Member economic participation
c) Voluntary and open membership
d) Concern for Community

4) Which of the following quorum requirements is incorrect?

a) In the case of electric cooperatives registered under this Code, a quorum shall
consist of 5% of all members entitled to vote.

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 b) In the case of cooperative banks, the quorum shall consist of at least 25% of
all the members entitled to vote.
c) In the meetings of the board of directors, the quorum requirement shall be one-half
plus one of all the members of the board of directors.
d) To hold a meeting of the Board, a majority of the members of the board shall
constitute a quorum for the conduct of business, unless the bylaws provide
otherwise.

5) A contract entered into by the cooperative with one or more of its directors, officers, and
committee members is voidable, at the option of the cooperative, unless all the following
condition are present, except:
a) That in the case of an officer or committee member, the contract with the
officer or committee member has been previously authorized by the
Cooperative Development Authority
b) That the contract is fair and reasonable under the circumstances
c) That the presence of such director in the board meeting wherein the contract was
approved was not necessary to constitute a quorum for such meeting
d) That the vote of such director was not necessary for the approval of the contract

6) It is the highest policy-making body of the cooperative and shall exercise such powers as
are stated in the Cooperative Code, in the articles of cooperation and in the bylaws of the
cooperative.
a) Board of Directors
b) Cooperative Development Authority
c) General Assembly
d) Accountancy Convention

7) The following, except one, are the descriptions of the types of cooperatives recognized in
R.A 9520:
a) Promotes and undertakes savings and lending services among its members
b) Organized to own, operate and manage water systems for the provision and
distribution of potable water for its members and their households
c) Primary purpose of providing a wide range of financial services to cooperatives
and their members
d) Bolsters the collective success by arming every entrepreneur with quality
products they can be proud to extend to their network of clients through the
sale of soaps and dietary supplements at a discount

8) The paid-up capital for a cooperative shall not be less than:

a) P 5,000
b) P 15,000
c) P 20,000
d) P 25,000

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9) The contents of the by-laws for a cooperative include the following, except:
a) Procedures to be followed in cases of termination of membership
b) The form for proxies of members and the manner of voting them
c) Qualifications for admission and membership and payment to be made or interest
to be acquired as a condition for the exercise of right of membership
d) Accounting and auditing systems

10) Choose the best answer.

I. The reserve fund must at most be 10% of the net surplus
II. The education and training fund must be more than 10% of the net surplus
III. The community and development fund must not be less than 3% of the net surplus
IV. The optional fund shall exceed 7%

a) Statement 1 is True, Statement 2 is True

b) Statement 2 is True, Statement 3 is False
c) Statement 1 is False, Statement 3 is True
d) Statement 2 is False, Statement 4 is True

11) Choose the best answer.

I. The proportionate amount of patronage refund shall be paid to a member patron
with unpaid share capital contribution unless he agrees to credit the amount to his
account as additional share capital contribution.
II. The proportionate amount of patronage refund shall be set aside in a general fund
for non-member patrons and shall be allocated to individual non-member patrons
only upon request and presentation of evidence of the amount of his patronage.
III. The proportionate amount of patronage refund shall be credited to the account of
a member patron with paid-up share capital contribution until his share capital
contribution has been fully paid.
IV. Any subscriber who has not fully paid his subscribed share capital or any non-
member patron who has accumulated the sum necessary for membership but who
does not request nor agree to become a member, the amount credited to their
account together with any part of the general fund for non-member patrons shall
be credited to the reserve fund or to the education and training fund, at the option
of the cooperative.

a) Statement 1 is False, Statement 2 is True

b) Statement 2 is True, Statement 3 is True
c) Statement 3 is True, Statement 4 is False
d) Statement 4 is False, Statement 1 is True

12) Choose the best answer.

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 I. The cooperatives may dispose by way of burning or other method of destruction
any document, record or book which are already more than five (5) months old.
II. Each cooperative shall maintain records of accounts such that the true and correct
condition and the results of the operation of the cooperative may be ascertained
therefrom at any time.

Statement I Statement II
a) True False
b) False True
c) True True
d) False False

13) When does the cooperative have to submit their regular reports of its program of activities
to the Authority?
a) within 90 days from the end of calendar year
b) within 90 days from the end of seasonal year
c) within 120 days from the end of calendar year
d) within 120 days from the end of seasonal year

14) Choose the best answer.

I. Cooperatives who do not transact any business with non-members or the general
public shall not be subject to any taxes and fees imposed under the internal
revenue laws and other tax laws.
II. Cooperatives who transact business with both non-members and non-members
shall not be subject to tax on their transaction with members.

a) Statement I is true but Statement 2 is false

b) Statement I is false but Statement 2 is true
c) Statement I is true and Statement 2 is true
d) Statement I is false and Statement 2 is false

15) The following are some of the privileges of Cooperatives, except:

I. Depositing their sealed cash boxes or containers, documents or any valuable
papers in the safes of the municipal or city treasurers and other government offices
free of charge.
II. Cooperatives organized among government employees, shall enjoy the free use
of any available space in their agency, whether owned or rented by the
Government.
III. Cooperatives organized by faculty members and employees of educational
institutions shall have the preferential right in the management of the library and
other services related to the operation of the educational institution where they are
employed

a) Statement I

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 b) Statement II
c) Statement III
d) None of the above

16) Which of the following is false?

Performance and social audit reports which contain the findings and recommendations of
the auditor shall be submitted to the board of directors.
a) The social audit shall be conducted by a CPA accredited by the Authority.
b) The financial audit shall be conducted by an external auditor who is independent,
a member of PICPA, and accredited by BOA and CDA.
c) The Authority, in consultation with the cooperative sector, shall promulgate the
rules and standards for the social audit of cooperatives.

17) Choose the best answer.

I. A member shall have the right to examine the records required to be kept by the
cooperative during reasonable hours on business days and he may demand, in
writing, for a copy of excerpts from said records without charge except the cost of
reproduction
II. If refusal is pursuant to a resolution or order of the board of directors, the liability
under this article shall be imposed upon the directors who voted for such refusal
a) Statement I is correct
b) Statement II is correct
c) Both statements are correct
d) Both statements are incorrect

18) How many votes are needed for a merger or consolidation of cooperatives to happen?
a) ¾ vote of all members present and constituting a quorum of each constituent
cooperatives at separate general assembly meetings
b) 2/3 vote of all members present and constituting a quorum of each constituent
cooperatives at separate general assembly meetings
c) ¾ vote of all members present and constituting a quorum of each constituent
cooperatives in one general assembly meeting
d) ¾ vote of all members with voting rights, present and constituting a quorum
of each of the constituent cooperatives at separate general assembly
meetings

19) Cooperatives registered under this Code may derive their capital from any or all of the
following sources, except
a) Member’s share capital
b) Revolving capital
c) Deposits
d) None of the above

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 20) The Authority may suspend or revoke, after due notice and hearing, the certificate of
registration of a cooperative on any of the following grounds, except
a) Failure to meet the required maximum number of members in the
cooperative
b) Willful violation, despite notice by the Authority, of the provisions of this Code or
its bylaws
c) Willful failure to operate on a cooperative basis
d) Existing for an illegal purpose

COOPERATIVES (2)

1) What is the title of R.A. 9520?

a) Philippine Cooperative Code of 2008

b) Cooperative Development Authority
c) The Cooperative Code

2) It is an autonomous and duly registered association of persons, with a common bond of

interest, who have voluntarily joined together to achieve their different needs.

a) Cooperative
b) Corporative
c) Corporation

3) It is a principle wherein the cooperative is open to all persons who are willing render
services and accept the responsibilities of membership

a) Democratic Member Control

b) Voluntary and Open Membership
c) Autonomy and Independence

4) An economic survey contains the following except:

a) Area of Operation
b) Size of Membership
c) Purpose of the Cooperative

5) A cooperative has a(an)

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 a) Unlimited Liability
b) No Liability
c) Limited Liability

6) Cooperatives are owned, managed, and patronized by

a) Members
b) Manager
c) Proprietor

7) How many votes are required to amend the articles of cooperation and by-laws?

a) Majority vote of all the members

b) 2/3 vote of all the members
c) 3/4 vote of all the members

8) One who has no right to vote nor be voted upon and shall be entitled only to such rights
and privileges as by-laws may provide

a. Regular Member
b. Associate Member
c. Independent Director

9) A cooperative organized by minors that must be affiliated with a registered cooperative

a. Laboratory Cooperative
b. Multipurpose Cooperative
c. Education Cooperative

10) The full membership of the cooperative duly assembled for the purpose of exercising all the
rights and performing all the obligations pertaining to the cooperatives

a. General Assembly
b. Special Assembly
c. Cooperative’s Assembly

11) In the case of electric cooperative, unless otherwise provided in the by-laws, Quorum shall
consist of how many percent of all members who has the right to vote?

a. 51%
b. 5%

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 c. 25%

12) The Board of Directors must consist of how many members?

a. 5-10 members
b. 1-15 members
c. 5-15 members

13) During the meetings of the board of directors, what constitutes a quorum?

a. Majority of the members of the board

b. 3/4 of the members of the board
c. 60% of the members of the board

14) Who is responsible for the continuous and periodic review of books and records of
accounts?

a. Bookkeeper
b. Audit Committee.
c. Board of Directors
15) Reports shall be filed with the Authority within 120 days from the end of ______________.
a. Fiscal year
b. Calendar year
c. Neither of the two

16) What amount is the fine payable by the Accountable Officer for the delay of compliance of
requirements?

a. P100 per day

b. P100 per week
c. P200 per day

17) Which of the following is a source of capital of a Cooperative

a. Member’s share capital

b. Loans and borrowings
c. Subsidies, donations, aids, and other assistance from any institution
d. All of the above

18) Which share is only issued to a regular member?

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 a. Common share capital
b. Preferred share capital
c. Both A and B

19) Article 73 states that “No member in a primary cooperative other than the cooperative
itself shall own or hold more than ____ of the share capital of the cooperative”.

a. 15%
b. 20%
c. 10%

20) A Cooperative is not subject to tax for the transactions with its members

a. True
b. False

Answer:

1. A 6. A 11. B 16. A
2. A 7. B 12. C 17. D
3. A 8. B 13. A 18. A
4. C 9. A 14. B 19. C
5. C 10. A 15. B 20. A

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