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1st Pre-Board Exam

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS ATTY. J. ONG

RFBT. 102 —CONTRACTS MAY 2022 CPALE REVIEW
1. The following pertain to dolo, except? b. The right of choice belongs to A. Hence, he may deliver
a. There is deliberate intent to cause damage or prejudice any of the object at his option.
b. The liability cannot be mitigated or reduced by the courts. c. A may deliver either the gaming computer or washing
c. The waiver of this in the future is void machine but not the pack of shabu.
d. There is failure to observe the diligence required by the d. The obligation of A to B is null and void.
nature of the obligation corresponds with the 9. The following are obligations with a period, except?
circumstances of the person, of the time and of the place. a. Payable "within 6 months from today"
2. A bind himself to sell his land to B for P500,000 if B can make b. “At anytime I have the money,
a dead man live again. In this case c. “As soon as possible”
a. The condition is void but the obligation is valid d. “Payable at sight”
b. The condition and the obligation are void 10. A bought 80 box of ballpen at P1,500 per box from B.
c. The condition is valid, but the obligation is void. However, the contract mistakenly showed a total contract
d. The condition and obligation are valid. price of P140,000 because of arithmetical computation.
3. Which of the following is not correct in an obligation with a Which of the following statement is correct?
period? a. The contract between A and B is void.
a. When the debtor binds himself to pay when his means b. The remedy of the parties is annulment of contract.
permit him to do so, the obligation shall be deemed to be c. Either party may ask for its correction.
one with a period. d. Only B may ask for the reformation of the instrument.
b. Whenever in an obligation a period is designated, it is 11. Statement 1: If the party alleging it knew the doubt,
presumed to have been established for the benefit of both contingency or risk affecting the object of the contract may file
the creditor and the debtor. an action for annulment on the ground of mistake.
c. The court as a rule is authorized to fix the period even the Statement 2: There is undue influence when one of the
period was not intended. contracting parties is compelled by a reasonable and well-
d. The debtor loses the right to make use of the period, when grounded fear of an imminent and grave evil upon his person
the debtor after the obligation has been contracted, he or property, or upon the person or property of his spouse,
becomes insolvent, unless he gives a guaranty or security descendants or ascendants, to give his consent.
for the debt. a. First statement is true; second statement is false.
4. Mr. Soler is under obligation to deliver to Mr. Buitre a Honda b. First statement is false; second statement is true.
CRV 2022 Model with engine #122477 and plate CHEL 03154. c. Both statements are true.
When Mr. Soler was on his way to deliver the car, it was d. Both statements are false.
destroyed but Mr. Soler was not yet in legal delay. The law 12. When the service has become so difficult as to be manifestly
presumes that the loss is due to: beyond the contemplation of the parties, the obligor may also
a. The defective nature of the car be released therefrom, in whole or in part. This states in our
b. A fortuitous event. law the:
c. Default on the part of the Debtor a. doctrine of unforeseen events
d. The fault or negligence of the debtor. b. doctrine of subsequent event
5. The obligation read as follows: “I will sell to you my land for c. doctrine of stare decisis
P500,000 if you will not kill B” (Sgd A). which of the following d. doctrine of res judicata
is a correct statement? 13. Arnold worked for Bambi as Chinese interpreter. Even
a. The condition must be fulfilled before the obligation arise. without an express agreement as to compensation, Arnold is
b. The obligation becomes a pure and valid obligation entitled to compensation because of:
c. The obligation is subject to resolutory condition. a. Do ut facias c. Facio ut facias
d. The condition and obligation are void. b. Do ut des d. Facio ut des
6. When the debtor binds himself to pay his obligation once he 14. D and C agreed that prior to the delivery of D’s only dog name
has the means to do so, his obligation is considered: Ollie, D should keep it in the doghouse, feed it three times a
a. one with an ex die period day, give it a bath five times a week and make it stroll every
b. one with an in-diem period morning for at least three hours. In this case, D should
c. one with a condition precedent therefore, take care of Ollie:
d. one with a condition subsequent a. with high degree of diligence
7. In obligation subject to suspensive condition, once the b. according to stipulation
condition has been fulfilled, shall retroact to the day of the c. with extraordinary diligence
constitution of the obligation. This automatic retroactive d. with diligence of a good father of the family
effect applies to 15. Which of the following statement is not correct?
a. Obligation to give determinate thing a. When the debtor binds himself to pay when his means
b. Obligation to give indeterminate thing permit him to do so, the obligation is conditional.
c. Obligation not to do b. Every obligation whose performance does not depend
d. Obligation to do upon a future or uncertain event, or upon a past event
8. A promised to give B a pack of shabu, or a gaming computer unknown to the parties, is demandable at once.
or a washing machine. Which of the following statement is c. Every obligation which contains a resolutory condition
correct? shall also be demandable, without prejudice to the effects
a. As a rule, B has the right of choice. of the happening of the event.
d. In conditional obligations, the acquisition of rights, as

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Accountancy Review Center (ARC) of the Philippines Inc. (ATTY. ONG – MAY 2022)
well as the extinguishment or loss of those already c. Execution of public instrument in case of donation of real
acquired, shall depend upon the happening of the event property
which constitutes the condition. d. Payment of penalty in case of non-performance upon
16. The following contract must be in a public instrument for maturity.
purpose of convenient. Which is the exception: 25. Which of the following statement is not correct about an
a. Repudiation of hereditary right object of contracts?
b. Acts and contracts which have for their object the a. Impossible things or services cannot be the object of
creation, transmission, modification, or extinguishment contracts
of real rights over immovable property b. All services which are not contrary to law, morals, good
c. Cession of conjugal partnership of gain. customs, public order, or public policy may likewise be
d. When the creditor expressly condoned the debtor’s the object of a contract.
obligation to deliver real property. c. All rights which are not intransmissible may also be the
17. One of the parties may ask for the reformation of the object of contracts.
instrument, when, there having been a meeting of the minds d. The object of every contract may be determinate or
of the parties to a contract, their true intention is not indeterminate as to its kind.
expressed in the instrument purporting to embody the 26. When the obligation modified the object and at the same time
agreement by reason of the principal conditions?
a. Negligence a. There is subjective novation
b. Delay b. There is objective novation
c. Fraud c. There is mixed novation
d. Contravention of tenor of obligation. d. There is expromision
18. Which phrase most accurately completes the statement -Any 27. Compensation is not proper when the debts arise in the
third person who induces another to violate his contract: following, except?
a. shall be liable for damages only if he is a party to the same a. Deposit
contract. b. Mutuum
b. shall be liable for damages to the other contracting party. c. Commodatum
c. shall not be liable for damages to the other contracting d. Legal support
party. 28. The stages of a contract according to the order of their
d. shall not be liable for damages if the parties are in pari occurrence are?
delicto. a. perfection, conception, and termination
19. Which of the following statement is not correct about voidable b. negotiation, consummation, and birth
contract? c. conception, perfection, and consummation
a. When the defect of the contract consists in the incapacity d. termination, negotiation, and birth
of one of the parties, the incapacitated person is not 29. Which of the following statement about a cause of contract is
obliged to make any restitution except insofar as he has not correct?
been benefited by the thing or price received by him. a. Contract without cause is void
b. Ratification extinguishes the action to annul a voidable b. Statement of a false cause in contract shall render them
contract void.
c. Ratification cleanses the contract from all its defects from c. Although the cause is not stated in the contract, it is
the moment it was constituted. presumed that it exists and is lawful
d. In case of undue influence, the action for annulment shall d. When the motive of one contracting party is contrary to
be brought within four years from the time of discovery. law, the contract is void.
20. The following contracts are void, except? 30. The following are acts of liberality, except:
a. That whose object is outside the commerce of men. a. Condonation of debt out of pure generosity
b. That whose object did not exist at the time of transaction. b. Donation Inter vivos
c. That which contemplates an impossible service. c. Donation Mortis causa
d. Those which are relative simulated contract. d. Condonation of debt by reason of past services rendered.
21. The prescriptive period of action for an oral contract is? 31. The obligations are extinguished under the following, except?
a. Ten (10) years c. Four (4) years a. By payment
b. Six (6) years d. One (1) year b. By the loss of indeterminate thing
22. Statement 1: Failure to disclose facts, when there is a duty to c. By remission of the debt.
reveal them, as when the parties are bound by confidential d. By the merger of the rights of creditor and debtor.
relations, constitutes fraud. 32. The following are subject to ratification, except?
Statement 2: Misrepresentation made in good faith is not a. Rescissible contract
fraudulent but may constitute error. b. Voidable contract
a. First statement is true; second statement is false. c. Unenforceable contract
b. First statement is false; second statement is true. d. Void contract
c. Both statements are true. 33. Statement 1: Payment as mode of extinguishment, means the
d. Both statements are false. delivery of money, or delivery of determinate or
23. Statement 1: Consignation may be judicial or extrajudicial. indeterminate thing only.
Statement 2: Tender of payment is an act on the part of the Statement 2: The creditor is bound to accept payment or
active subject of offering to the passive subject the thing or performance by a third person who has no interest in the
amount due. fulfillment of the obligation unless there is a stipulation to the
a. First statement is true; second statement is false. contrary.
b. First statement is false; second statement is true. a. First statement is true; second statement is false.
c. Both statements are true. b. First statement is false; second statement is true.
d. Both statements are false c. Both statements are true.
24. Which of the following is an example of an accidental element d. Both statements are false.
of contract? 34. Which of the following statement is not correct about
a. Implied warranty against hidden defect condonation?
b. Payment of price in a contract of sale. a. Condonation is essentially gratuitous and requires the

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Accountancy Review Center (ARC) of the Philippines Inc. (ATTY. ONG – MAY 2022)
acceptance by the obligor. b. New York Rule
b. Condonation may be express or implied. c. English Rule
c. Condonation be subject to the rules which govern d. Beijing Rule
inofficious donations. 43. A own a specific parcel of land with fair market value of
d. Condonation whether express or implied must comply P1,000,000 and sold it to B only for only P500,000 which is
with the forms of donation. 50% less than the Market value.
35. In the following cases, the pacto de retro sale entered into by a. The sale rescissible because the seller suffers a lesion of
the parties will be regarded as an equitable mortgage. Choose more than ¼.
the exception. b. The sale is voidable because the price is grossly
a. When the price of a sale with right to repurchase is inadequate.
expensive. c. The sale is perfectly valid because gross inadequacy of
b. When the vendor remains in possession as lessee or price does not affect a contract of sale.
otherwise. d. The sale is void because the price seems too inadequate
c. When the purchaser retains part of the purchase price. as to shock the conscience of man.
d. When the vendor binds himself to pay the taxes on the 44. In a contract to sell, which of the following is correct?
thing sold. a. This is subject to a positive suspensive condition.
36. Which of the following is not correct about universal b. Failure to pay the price is a breach of contract
partnership? c. Non-payment of the price is a resolutory condition
a. Articles of universal partnership, entered without d. Rescission is not allowed.
specification of its nature, only constitute a universal 45. Which of the following accurately apply to emptio spei?
partnership of profits. a. If the expected thing did not materialize, the sale is not
b. Husband and wife are prohibited to enter a universal effective
partnership of all present property but not universal b. This refer to future thing which is expected.
partnership of all profits. c. Sale of the hope itself
c. A universal partnership of profits comprises all that the d. Sale of expectancy that should materialize.
partners may acquire by their industry or work during 46. Which of the following is a correct statement?
the existence of the partnership. a. The thing must be licit, and the vendor must have a right
d. A universal partnership may refer to all the present to transfer the ownership thereof at the time it is
property or to all the profits. delivered.
37. A sold to B his only car for P1,000,000. A deliver the car to B b. The thing must be licit, and the vendor must have a right
but the latter failed to pay the price. to transfer the ownership thereof at the time of
a. The sale is void for lack of consideration. perception.
b. The sale is voidable because B failed to pay the price. c. The thing may be licit or illicit and the vendor must have
c. The sale is perfectly valid. The failure to pay the agreed a right to transfer the ownership thereof at the time it is
price does not cancel a sale for lack of consideration, for delivered.
the consideration is still there which is the price. d. The thing may be licit or illicit and the vendor must have
d. The sale may be rescinded for lack of consideration. a right to transfer the ownership thereof at the time of
38. A granted B the right to sell “Product X” as an “agent” of A in perfection.
the National capital region. Based on their written agreement, 47. In a sale of personal property on the installment basis, should
A has the obligation to supply “Product X” and B was obliged the buyer fail to pay one installment, the unpaid seller has this
under the contract to pay for “Product X” at a discount of 20% remedy or remedies -
as commission on the sales. The contract also provides that B a. To exact fulfillment only
should make a payment whether or not he could sell “Product b. To cancel the sale only
X”. What is the contract between A and B? c. To foreclose the chattel mortgage only
a. Contract for a piece of work d. To choose from exacting fulfillment cancellation of the
b. Contact of Sale sale or foreclosure of the chattel mortgage, if any has been
c. Contract of an agency to sell constituted
d. No contract because the agreement is ambiguous. 48. Within what time should be the action for a proportionate
39. The following are future goods, except? reduction of the price or rescission be filed if the object is
a. Goods to be acquired after the perfection of the contract immovable property?
of sale a. Within forty (40) days from delivery.
b. Goods to be manufactured b. Within six (6) months from delivery.
c. Goods to be raised c. Within one (1) year from delivery.
d. Goods that are owned and possessed by the vendor d. Within four (4) years from delivery.
40. When is the contract of sale consummated? 49. What mode of extinguishing a contract of sale is effected when
a. Upon execution of a written contract of sale a person is subrogated upon the same term and condition
b. When there is a definite offer, and the acceptance is stipulated in the contract in the place of one who acquires a
absolute thing by onerous title?
c. Upon delivery of the determinate thing and payment of a. Compensation c. Novation
the price. b. Conventional redemption d. Legal redemption
d. Upon meeting of the offer and acceptance as to the object 50. S sell to B for P1,000,000 his inheritance from his father F.
(determinate thing) and as to the cause (Price). However, the contract of sale does not enumerate the things
41. The following are obligations of the vendor, except? of which it is composed. At the time of sale F is already dead.
a. To transfer ownership But the property left by F is not yet distributed with the legal
b. To deliver the determinate thing heirs including S. What is the status of the sale between S and
c. To pay a price certain in money B?
d. To deliver the accession and accessories a. Perfectly valid c. Unenforceable
42. Under Philippine law, what school of thought is followed to b. Voidable d. Void ab initio
determine whether it is a contract of sale or a contract for a 51. Real property mortgaged
piece of work? a. Generally, is not possessed by the creditor.
a. Massachusetts rule

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Accountancy Review Center (ARC) of the Philippines Inc. (ATTY. ONG – MAY 2022)
b. Cannot be acquired by the creditor, even if he is in d. The mortgagee because the right to specific partnership
possession for 30 years by prescription. property is assignable.
c. Mortgage cannot appropriate the property for himself, 60. A owes B the sum of P800. A pledge his solid Seiko gold watch
even if stipulated. as security. Later, A borrowed an additional sum of P200.
d. All of the above. from B. A paid B the P800 and demands the return of the solid
52. It is the right of the mortgagor to redeem the property that Seiko gold watch which was the property pledged. B refused.
was mortgage after it was sold. a. B should return the solid Seiko gold watch as the original
a. Equity of redemption loan was already paid.
b. Right of subrogation b. B should retain the watch until the P200 is paid.
c. Right of redemption. c. B should deposit the solid Seiko gold watch with the
d. Right of pre-emption. court.
53. Dean borrowed from Bean P20,000. Dean offered his ring by d. B should sell the watch at public auction to the highest
way of pledge. It was expressly stipulated that upon non- bidder to insure the collection of P200.
payment of the debt on time, the ring would belong to Bean. 61. Statement I - Future property cannot be the subject of
This forfeiture clause, which has traditionally not been mortgage or pledge
allowed, is called: Statement II – Future property cannot be the subject of
a. Pacto de retro c. Commodatum contract of sale
b. Pacto comisorio d. Mutuum a. First statement is true; second statement is false.
54. In a real estate mortgage, the mortgagor can sell the b. First statement is false; second statement is true.
mortgaged property c. Both statements are true.
a. With the consent of the mortgagee in writing. d. Both statements are false.
b. Even without the consent of the mortgagee. 62. Statement I - A pledge or mortgage may be constituted to
c. Only with the consent of the mortgagee in writing or secure a voidable obligation.
orally. Statement II - A pledge or mortgage may be constituted to
d. All of the above. secure a void obligation.
55. Which phrase best completes the statement - When a debt is a. First statement is true; second statement is false.
secured by a real estate mortgage, upon default of the debtor: b. First statement is false; second statement is true.
a. the only remedy of the creditor is to foreclose the real c. Both statements are true.
estate mortgage. d. Both statements are false.
b. another remedy is filing an action for collection and then 63. Which of the following can generally be assigned, be attached,
foreclose if collection is not enough. be subject to legal support?
c. the creditor can foreclose the mortgage and demand a. Rights in specific partnership property
collection for any deficiency. b. Interest in the partnership
d. None of the above. c. Right to participate in the management
56. Which of the following is not correct about partner’s right d. Right to inspect partnership books
over specific partnership property? 64. Which of the following act requires the consent of all
a. A partner is co-owner with his partners of specific partners?
partnership property. A. Dispose the goodwill of the business
b. A partner's right in specific partnership property is not B. Confess a judgment
assignable. C. Renounce a claim of the partnership
c. A partner's right in specific partnership property is not D. Submit a partnership claim to arbitration
subject to legal support. E. Enter into a compromise agreement concerning a
d. A partner's right in specific partnership property is not partnership claim
subject to attachment or execution even on a claim a. Only A, B, C and D c. Only A, B and C
against the partnership. b. Only A, B, C and E d. All of them
57. Statement 1: A partner appointed as manager in a contract 65. A partnership without a definite period of existence and
other than the articles of partnership may be removed with or which can be dissolved at any time by any of the partners is
without cause. called:
Statement 2: The conveyance of the whole interest of a a. Universal partnership of all present property
partner in the partnership of itself dissolves the partnership. b. Universal partnership of profits
a. First statement is true; second statement is false. c. Particular partnership
b. First statement is false; second statement is true. d. Partnership at will
c. Both statements are true. 66. A, B and C were partners. While acting within the scope of the
d. Both statements are false firm’s business, A committed a tort against X, a third person.
58. In A, B, C and D partnership, only B did not deliver his agreed Is the firm liable?
capital contribution in the form of a specific house and lot. The a. No because only A was only at fault
remedy against him is: b. Yes. Moreover A, B and C as well as the firm itself, are
a. annulment of the partnership contract liable in solidum
b. for A, C and D to get back their contributions c. Yes. Moreover A, B and C as well as the firm itself, are
c. for specific performance liable pro rata.
d. dissolution of the partnership d. No. X remedy is to go after only the property of A who
59. A and B were partners. A mortgaged his right in a certain committed the torts.
specific partnership property. Later the firm creditor wanted 67. Which of the following statement is not correct?
to get said property. Who should prevail, the firm creditor or a. Every partner may associate another person with him in
the mortgagee? his share, but the associate shall not be admitted into the
a. The firm creditors, for the mortgaged in specific partnership without the consent of majority of the other
partnership property is void, B not having assigned his partners, even if the partner having an associate should
right. be a manager.
b. The mortgagee because the mortgaged is perfectly valid b. The partnership books shall be kept, subject to any
c. The firm creditor is entitled to the property provided the agreement between the partners, at the principal place of
mortgagee waive his right in the mortgaged property business of the partnership, and every partner shall at

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Accountancy Review Center (ARC) of the Philippines Inc. (ATTY. ONG – MAY 2022)
any reasonable hour have access to and may inspect and 73. Statement 1: A partnership can become an incorporator of a
copy any of them. corporation.
c. Partners shall render on demand true and full Statement 2: All capacitated persons may enter a contract of
information of all things affecting the partnership to any universal partnership.
partner or the legal representative of any deceased a. First statement is true; second statement is false.
partner or of any partner under legal disability b. First statement is false; second statement is true.
d. The capitalist partners cannot engage for their own c. Both statements are true.
account in any operation which is of the kind of business d. Both statements are false
in which the partnership is engaged unless there is a 74. May be required additional contribution in case of imminent
stipulation to the contrary. loss:
68. Statement 1: Co-ownership or co-possession of itself a. Capitalist partner
establishes a partnership provided the co-owners or co- b. Industrial partner.
possessors divide the produce from the thing owned in c. Limited partner.
common. d. None of the above.
Statement 2: Dissolution automatically terminates the 75. Which of the following is not correct? In a limited partnership
juridical personality of the partnership. composed of Andy, Blood and Carlito, the contribution may be
Statement 3: The death of a limited partner dissolves the as follows:
partnership. a. Andy - cash (limited partner); Blood - cash (general
Statement 4: A partner has an interest in specific partnership partner); Carlito - services (general partner).
property which he can assign to anybody, according to his will b. Andy - property (limited partner); Blood - services
or discretion (general partner); Carlito - cash (general partner).
a. Only one statement is false c. Andy - services (limited partner); Blood - cash (general
b. Two statements are false partner): Carlito -services (general partner)
c. Three statements are false d. Andy - cash (limited partner); Blood - property (general
d. All statements are false partner); Carlito - services (general partner).
69. Which of the following is not correct about partner’s right 76. A, B, C, D, E, F, G, and H are the partners of ABC Partnership. A,
over specific partnership property? B, C, D, and G are the appointed manager in the Articles of
a. A partner is co-owner with his partners of specific Partnership. There is a stipulation in the article of partnership
partnership property. that none of the managing partners shall act without the
b. A partner's right in specific partnership property is not consent of the others. In this case, which of the following
assignable. statement is correct?
c. A partner's right in specific partnership property is not a. Any of the managing partner (A, B, C, D or G) can perform
subject to legal support. all kind of administration without the consent of the other
d. A partner's right in specific partnership property is not if this are beneficial to the partnership.
subject to attachment or execution even on a claim b. The concurrence of all partners (A, B, C, D E, F, G and H)
against the partnership. shall be necessary for the validity of the acts, and the
70. Statement 1: Every partner is responsible to the partnership absence or disability of any one of them cannot be alleged,
for damages suffered by it through his fault, and he cannot unless there is imminent danger of grave or irreparable
compensate them with the profits and benefits which he may injury to the partnership.
have earned for the partnership by his industry. c. The concurrence of all managing partners (A, B, C, D and
Statement 2: The risk of specific and determinate things, G) shall be necessary for the validity of the acts, and the
which are not fungible, contributed to the partnership so that absence or disability of any one of them cannot be alleged,
only their use and fruits may be for the common benefit, shall unless there is imminent danger of grave or irreparable
be borne by the partner who owns them injury to the partnership.
Statement 3: A partner's interest in the partnership is his d. All the partners (A, B, C, D, E, F, G or H) shall be considered
share of the profits only. agents and whatever any one of them may do alone shall
Statement 4: A stipulation which excludes one or more bind the partnership.
partners from any share in the profits or losses is valid. 77. 1st statement: A contract of partnership is always perfected by
a. Only one statement is true mere consent.
b. Two statements are true 2nd statement: Partnership is only a form of agency
c. Three statements are true a. Both statements are true
d. All statements are true b. Both statements are false
71. Statement 1: Every partner is an agent of the partnership for c. 1st statement is true, and 2nd statement is false
the purpose of its business and may generally exercise alone d. 1st statement is false, and 2nd statement is true
acts of administration. 78. In the partnership of A, B and C, A was appointed in the Article
Statement 2: Corporations and partnership are created only of Co-partnership as managing partner. As such manager and
with the consent of the State. acting in good faith:
Statement 3: There can be partnership with 150,000 partners. a. His power is revocable even without his consent.
Statement 4: The law fixes the period of liquidation of b. His power can be revocable at any time even without just
partnership affairs for two (2) year. cause if it is approved by the partners owning the
a. Only one statement is true controlling interest.
b. Two statements are true c. He may execute all acts of administration despite the
c. Three statements are true opposition of B and C.
d. All statements are true d. He can be removed for valid cause without the vote of the
72. The following are the effect of unlawful partnership except: partners owning the controlling interest.
a. Unlawful partnership has no legal personality 79. This is the point in time after all the partnership affairs have
b. Partners forfeit their share in the profit been wounded up.
c. Partners forfeit their capital whether it becomes an a. Dissolution c. Termination
instrument or effect of the crime. b. Winding up d. Execution
d. Judicial decree is no longer required.

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Accountancy Review Center (ARC) of the Philippines Inc. (ATTY. ONG – MAY 2022)
80. Statement 1: Every partner is an agent of the partnership for b. No-par value shares must be issued for a consideration of
the purpose of its business and may generally exercise alone at least Five pesos (P5.00) per share.
acts of administration. c. Shares of capital stock issued without par value shall be
Statement 2: Corporations and partnerships are created only deemed fully paid and nonassessable and the holder of
with the consent of the State. such shares shall not be liable to the corporation or to its
Statement 3: There can be partnerships with 150,000 creditors in respect thereto
partners. d. No par value shares have no voting right.
Statement 4: The law fixes the period of liquidation of 87. The minimum number of incorporators to validly organize an
partnership affairs for two (2) years. ordinary stock corporation.
a. Only one statement is true a. One (1)
b. Two statements are true b. Two (2)
c. Three statements are true c. Five (5)
d. All statements are true d. Fifteen (15)
81. W, X, Y and Z are the general partners, who contributed 88. Which of the following statement is not correct?
P500,000.00, P300,000.00, P100,000.00 and services to the a. Each incorporator of a stock corporation must own or be
common fund, respectively. After dissolution, the partnership a subscriber to at least one (1) share of the capital stock.
suffered losses amounting to P600,000.00. How much shall b. All incorporators must be of legal age without exception.
be the share of Z in the losses? c. A corporation with a single stockholder is considered a
a. Equal with the capitalist partners One Person Corporation.
b. According to agreement, if there is any d. An individual who are licensed to practice a profession
c. Just and reasonable shall not be allowed to organize as one person
d. None corporation.
82. On February 1, 2018, A, B and C agree to form a partnership 89. ABC Corporation certificate of incorporation was issued on
that will commence on March 1, 2018. In their written April 21, 1989. The article of incorporation provides a term of
agreement, they stipulate that they will contribute as follows: 30 years. ABC corporation did not amend its article of
A P200,000; B P300,000 and C P500,000. There is no incorporation to extend the life of the corporation prior to
agreement as to the distribution of profit and loss. They also April 21, 2019. In this case
provide that the partnership will have a fixed term that will a. ABC corporation is ipso facto dissolve on April 22, 2019.
end on March 1, 2022. On March 2, 2022, A, B and C continue b. ABC corporation shall automatically have an extended life
the partnership operation without any settlement of the of 30 years.
partnership affairs. In this case, which of the following is not c. ABC corporation shall have perpetual existence.
correct? d. ABC corporation is allowed to amend the article of
a. The partnership commences its legal personality on incorporation to extend its life not exceeding 50 years.
February 1, 2018. 90. Under the revised corporation code, no articles of
b. Upon arrival of March 1, 2022, the partnership with a incorporation or amendment to articles of incorporation of
fixed term is automatically dissolved. the following shall be approved by the Commission unless
c. The profit or loss will be divided 20%, 30% and 50% to A, accompanied by a favorable recommendation of the
B and C respectively. appropriate government agency to the effect that such articles
d. On March 2, 2022, there is prima facie evidence of a or amendment is in accordance with law, except?
continuation of the partnership. a. Pawnshop
83. A is the capitalist partner and B the industrial partner. A b. Non-Stock Saving and loan associations (NSSLA’s)
engaged personally in the same kind of business the c. Insurance Company
partnership is engaged in: d. Educational Institution
a. If there are losses, the partnership will bear the losses. 91. Under the Revised Corporation Code, the certificate of
b. If there are profits, the profits will share by A and the incorporation shall be deemed revoked if the corporation
partnership. failed to formally organize and commence its business
c. If there are profits, A will give the profits to the a. within one (1) year from the date of its incorporation.
partnership. b. within two (2) years from the date of its incorporation.
d. A will be excluded from the partnership and pay damages c. within three (3) years from the date of its incorporation.
84. A is the managing partner of ABC and company. X owes A d. within five (5) years from the date of its incorporation.
personally and ABC and Company P20,000 each. A collected 92. The one who elect corporate secretary?
and received from X P10,000 and he issued a receipt wherein a. Stockholders
it’s stated that the amount is applied against his personal b. Board of directors
credit. c. President
a. The amount received will be applied in favor of the d. Chairman
partnership credit. 93. Under the revised corporation code, these officers require to
b. The amount received will be applied in proportion to both be a resident of the Philippines
credits. a. President and Secretary
c. The amount received will be applied in the credit of A. b. Treasurer and Secretary
d. All the partners will decide as to whose favor it will apply. c. President and Treasurer
85. Which of the following is not an obligation of a partner? d. Vice president and Secretary
a. To give his capital contribution 94. A director of a corporation may be removed from office
b. Not to engage in unfair competition with the partnership a. by a vote of the stockholders holding or representing at
c. To pay partnership for damages suffered by it through his least majority of the outstanding capital stock
fault b. by a vote of the stockholders holding or representing at
d. To inspect and copy partnership books least two-thirds (2/3) of the outstanding capital stock
86. Which of the following statement is not correct about no par c. by a vote of Majority of the board of directors fixed in the
value share? articles of incorporation.
a. The entire consideration received by the corporation for d. By a vote 2/3 of the board of directors present and
its no-par value shares shall be treated as capital and shall constituting a quorum.
not be available for distribution as dividends.

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Accountancy Review Center (ARC) of the Philippines Inc. (ATTY. ONG – MAY 2022)
95. Which of the following call of special meeting of the
stockholders for the purpose of removing any director is
valid?
a. When the special meeting is called by the corporate
secretary on order of the president
b. When the special meeting is called by the president moto
propio
c. When the special meeting is called by the chairman of the
board
d. When the special meeting is called by stockholders in
writing representing 51% of the total number of
stockholders.
96. When here is vacancy in the board of directors due to death,
there must be an election to fill up the vacancy
a. On the same date of death
b. Not later than thirty (30) days from the time of death
c. Not later than forty-five (45) days from the time of death
d. Within seven (7) days from knowledge of death
97. A, B, C, D and E are the present directors of ABC Corporation,
a stock corporation. On January 10, 2022, A was removed by
the stockholder’s representing 90% of the outstanding capital
stock. In this case, which of the following statement is correct?
a. The vacancy may be filled up by B, C, D and E, because
they still constitute a quorum.
b. The vacancy must be filled up by the stockholders in a
regular or special meeting called for that purpose.
c. The vacancy may be filled up by the remaining board of
directors if the stockholders decided to refer to them.
d. The vacancy can be filled up by the board of directors
upon order by the Securities and Exchange Commission.
98. Which of the following is not correct about the emergency
board?
a. the vacancy prevents the remaining directors from
constituting a quorum.
b. The emergency action is required to prevent grave,
substantial, and irreparable loss or damage to the
corporation.
c. the vacancy may be temporarily filled from among the
officers of the corporation by Majority vote of the
remaining directors.
d. The action by the designated director or trustee shall be
limited to the emergency action necessary.
99. Which of the following is not correct about compensation of
the directors?
a. As a rule, directors shall not receive any compensation in
their capacity as such, except for reasonable per diems.
b. The stockholders representing at least majority of the
outstanding capital stock may grant directors or trustees
with compensation and approve the amount thereof at a
regular or special meeting.
c. In case compensation of director is granted, the total
yearly compensation of directors should not exceed ten
percent (10%) of the net income after income tax of the
corporation during the preceding year.
d. Directors are not allowed to participate in the
determination of their own per diems or compensation.
100. When a director who willfully and knowingly vote for or
assent to patently unlawful acts of the corporation. The
director violates his
a. Duty of obedience
b. Duty of diligence
c. Duty of loyalty
d. Duty of efficiency

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