ReSA - THE REVIEW SCHOOL OF ACCOUNTANCY

CPA Review Batch 47  May 2024 CPALE  17 February 2024  3:00 – 5:00 PM

REGULATORY FRAMEWORK for BUSINESS TRANSACTIONS FIRST PRE-BOARD EXAMINATION

INSTRUCTIONS: Select the correct answer for each of the questions. Mark only one
answer for each item by shading the box corresponding to the letter of your choice on
the answer sheet provided. STRICTLY NO ERASURES ALLOWED. Use pencil no. 2 only.

1. A corporation is not entitled to which constitutional right?

a. Right against unreasonable search and seizure
b. Right to due process
c. Right to equal protection
d. Privilege against self-incrimination

2. Which of the following is a public company?

a. Those with assets of at least P50,000,000.00 and having 200 or more
holders of shares, each holding at least 100 shares of a class of its
equity shares
b. Those with assets of at least P15,000,000.00 and having 200 or more
holders of shares, each holding at least 100 shares of a class of its
equity shares
c. Those with assets of at least P50,000,000.00 and having 100 or more
holders of shares, each holding at least 100 shares of a class of its
equity shares
d. Those with assets of at least P50,000,000.00 and having 100 or more
holders of shares, each holding at least 200 shares of a class of its
equity shares

3. Corporations vested with public interest are required to have independent

directors comprising at least __ of its board of directors.
a. 10%
b. 20%
c. 25%
d. 30%

4. What is a minimum requirement of continued good faith in case of a de facto

corporation?
a. Submission of articles of incorporation
b. Issuance of certificate of incorporation by the SEC
c. Submission of by-laws
d. Use of corporate powers

5. An SEC-registered non-stock corporation is a Philippine national if at least __

of its members entitled to vote are Filipinos.
a. 50%
b. 50% plus 1
c. 60%
d. 75

6. Which of the following is not true about piercing of the corporate veil?
a. It is only an equitable remedy.
b. It is an exercise of judicial power.
c. It applies only to a particular transaction.
d. None of the choices

7. Which of the following refers to the trust fund of the corporation?

a. Authorized capital
b. Paid-up capital
c. Subscribed capital
d. Common stock

8. For which of the following matters are non-voters not entitled to vote?
a. Amendment of the articles of incorporation
b. Adoption of by-laws
c. Amendment of by-laws
d. Incurring, creating, or decreasing bonded indebtedness

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ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
9. Investment of corporate funds for primary purpose requires:
a. Board approval only
b. Board approval and at least majority of shareholders holding outstanding
capital stock
c. Board approval and at least 60% of shareholders holding outstanding
capital stock
d. Board approval and at least 2/3 of shareholders holding outstanding
capital stock

10. Outstanding capital stock means the total shares of stock issued under binding
subscription agreements to subscribers or stockholders, whether or not fully or
partially paid, except:
a. Treasury shares
b. Redeemable shares
c. Preferred shares
d. Founders’ shares

11. Which of the following capital structure is proper in incorporating stock

corporations?
a. Authorized: 1,000,000; Subscribed: 200,000; Paid-up: 200,000
b. Authorized: 5,000; Subscribed: 5,000; Paid-up: 5,000
c. Authorized: 1,000,000; Subscribed: 500,000; Paid-up: 50,000
d. All of the choices

12. When does an amendment to the articles of incorporation take effect?

a. Upon approval by the SEC or from the date of filing with the SEC if not
acted upon within 6 months from the date of filing for a cause not
attributable to the corporation
b. Upon approval by the SEC or upon expiration of 6 months from the date of
filing with the SEC if not acted upon for a cause not attributable to the
corporation
c. Upon approval by the SEC or from the date of filing with the SEC if not
acted upon within 6 months from the date of filing for a cause attributable
to the corporation
d. Upon approval by the SEC or upon expiration of 6 months from the date of
filing with the SEC if not acted upon for a cause attributable to the
corporation

13. Who among the following may be elected as a director?

X: Subscribed for 1,000 shares for P100,000 due on December 31, 2022
Y: Subscribed for 500 shares for P50,000, but has paid in full, but no
certificate has been issued yet
Z: Subscribed for 500 shares for P50,000, but has paid P25,000 with the
balance declared due and payable by the board of directors and no payment
was made within 30 days from due date
a. No one
b. All of them
c. X and Y
d. Y only

14. The total yearly compensation of directors, as such directors, shall not exceed:
a. 10% of the net income before income tax of the corporation during the
preceding year
b. 10% of the gross income before income tax of the corporation during the
preceding year
c. 10% of the net income before income tax of the corporation during the
current year
d. 10% of the gross income after income tax of the corporation during the
preceding year

15. First Statement: Stockholdings of at least 20% of the outstanding capital stock
shall be considered substantial for purposes of interlocking directors.
Second Statement: Even if not provided for in the by-laws, an executive committee
may be created by affirmative vote of majority of the board of directors with
ratification of stockholders owning or representing at least 2/3 of the
outstanding capital stock.

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ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
a. Both statements are true.
b. Both statements are false.
c. Only the first statement is true.
d. Only the second statement is true.
16. Do all stockholders of a stock corporation have pre-emptive right?
a. Yes, unless it is denied by the articles of incorporation or an amendment
thereto.
b. Yes, unless it is denied by the articles of incorporation and by-laws.
c. Yes, unless it is denied by the articles of incorporation and such denial
is printed in the certificate of share.
d. No, unless such right is expressly provided and stipulated in the articles
of incorporation.
17. Walang Nagmamahal, Inc. is a corporation engaged in the sale of real properties.
It has an inventory of 100 condominium units. How many units can it sell without
needing the authorization of the stockholders representing at least 2/3 of the
outstanding capital stock?
a. 100
b. 95
c. 51
d. 50
18. Cardo subscribed for 100 shares of Magtanggol Corporation for P100,000 (P1,000
per share). After initially paying P20,000, Cardo can no longer pay the balance
anymore. The board of directors of the corporation declared the balance of
P80,000 due and payable. Due to Cardo’s failure to pay the balance, a delinquency
sale was held where Victor offered to pay the full amount due inclusive of
interest and costs for the acquisition of 70 shares. Loki offered the same
amount for the acquisition of 10 shares. How will be corporation distribute the
certificate of stock for the 100 shares?
a. 20 for Cardo; 70 for Victor; 10 for Loki
b. 30 for Cardo; 70 for Victor
c. 20 for Cardo; 10 for Loki; 70 shall become treasury shares
d. 90 for Cardo; 10 for Loki
19. Where can the members of a non-stock corporation whose principal office is
located at PSE Building Makati City hold their special meeting?
a. PSE Building
b. Makati City
c. Anywhere in Metro Manila only
d. Anywhere in the Philippines
20. What is the nature of membership in a non-stock corporation?
a. It is personal and non-transferable, unless the articles of incorporation
or the by-laws otherwise provide.
b. It is personal and non-transferable, notwithstanding what the articles of
incorporation or the by-laws provides.
c. It is personal and transferable, unless the articles of incorporation or
the by-laws otherwise provide.
d. It is personal and transferable, notwithstanding what the articles of
incorporation or the by-laws provides.
21. A foreign corporation is
a. At least 60% of the voting rights are owned by foreign nationals
b. 100% foreign-owned corporation
c. Incorporated under laws other than the Philippines
d. One with a resident agent representative in the Philippines

22. Samahan ng mga Naiwan, Inc.’s initial term was to end on December 31, 2030. On
July 1, 2022, it filed with the SEC for the amendment of its corporate term
which is to end on August 1, 2022. The SEC approved the amendment on August 15,
2022. The corporation’s representative received the certificate of approval on
August 31, 2022. When is the corporation’s dissolution considered effective?
a. July 1, 2022
b. August 1, 2022
c. August 15, 2022
d. August 31, 2022

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 MANAGEMENT SERVICES
ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam

23. If a corporation intends to increase its authorized capital from P30,000,000 to

P50,000,000, how much of the planned increase should be subscribed?
a. At least P12,500,000
b. At least P5,000,000
c. At least P10,000,000
d. None

24. If a corporation intends to increase its authorized capital from P30,000,000 to

P50,000,000 and the intended subscription of additional capital amounts to
P10,000,000, how much of the intended subscription should be paid up?
a. At least P2,500,000
b. At least P5,000,000
c. At least P10,000,000
d. None

25. When is appraisal right not available?

a. When the corporation acquires its own shares
b. When the corporation sells all of its corporate assets
c. When the corporation extends its corporate term
d. When the corporation shortens its corporate term

26. Which of the following dividends may be declared by an executive committee?

a. Cash
b. Property
c. Stock
d. None of the above

27. When the board of directors declare stock dividends for distribution, what is
the voting threshold required from the stockholders?
a. Majority
b. 2/3
c. None
d. 3/4

28. What is the maximum term of management contracts entered into by a corporation
with another corporation?
a. 3 years
b. 5 years
c. 10 years
d. No maximum term

29. What is the term of a director in a educational corporation organized as a stock

corporation?
a. 1 year
b. 2 years
c. 3 years
d. 5 years

30. Which of the following statements is false?

a. An independent director must own at least one stock of the stock
corporation.
b. An independent trustee need not be a member of the non-stock corporation.
c. A tenure may be shorter or longer than a term.
d. None of the above

31. How can a vacancy caused by the resignation of a hold-over director be filled?
a. By appointment by the President
b. By vote of the stockholders
c. By appointment by the Board of Directors
d. By vote of the remaining members of the Board

32. What is the minimum number of members of the executive committee?

a. 3
b. 4
c. 5
d. 7

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 MANAGEMENT SERVICES
ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
33. Adoption of the articles of merger or consolidation would require:
a. Majority of the BoD + approval of the Majority of the Outstanding Capital
Stock
b. Majority of the BoD + approval of the 2/3 of the Outstanding Capital Stock
c. 2/3 of the BoD + approval of the Majority of the Outstanding Capital Stock
d. 2/3 of the BoD + approval of the 2/3 of the Outstanding Capital Stock

34. The Corporation has 5 directors, 2 of which resigned. Who will fill up the
vacancy?
a. The Board of Directors since they still constitute a quorum
b. The Board of Directors even if they do not constitute a quorum
c. The Stockholders if the directors no longer have a quorum
d. The Stockholders even if the directors have a quorum
35. In a corporation vested with public interest, the required vote to approve the
transaction of the self-dealing director would require __ of the entire
membership of the board and __ of the independent directors:
a. Majority; Majority
b. Majority; 2/3
c. 2/3; 2/3
d. 2/3; Majority

36. D is a stockholder and director of both A Corporation and B Corporation. Both

corporations had a contract of sale which each other. Which of the following
ownership of D would make the contract voidable as to B?

A B
Corporation Corporation
a. 20% 15%
b. 25% 20%
c. 5% 25%
d. 35% 30%

37. The factors for the application of the doctrine of piercing the corporate veil
are the following, except:
a. Stock ownership by one or common ownership of both corporations
b. Identity of directors and officers
c. The manner of keeping corporate books and records
d. Identity of corporate president and other directors
38. Statement I – A treasurer must not be the President and must be a resident of
the Philippines
Statement II – A single stockholder (One Person Corporation) may not be appointed
as Corporate Secretary and Treasurer
a. Only statement I is true.
b. Only statement II is true.
c. Both statements are true.
d. Both statements are false.
39. The Articles of Incorporation of a corporation provides for voting rights
privilege of its founder’s shares, as follows:
“In terms of voting rights, FOUNDER’S shares shall have a 1:10 ratio as opposed
to 1:1 ratio for the COMMON shares. In the other words, one FOUNDER’S share is
equivalent to ten votes. All shares regardless of whether it is FOUNDER’S or
COMMON shall be allowed to vote on all matters of the holding corporation,
including the right to vote and be voted for in the election of directors.”
Is the 1:10 voting rights ratio above for founder’s shares subject to a limited
period not to exceed five (5) years provided under Section 7 of the Revised
Corporation Code (RCC)?
a. Yes, the 1:10 voting rights ratio for Founder’s share is subject to the
limited period not to exceed five (5) years provided under Section 7 of
the RCC since this provision only applies to the exclusive right to vote
and be voted for in the election of directors.
b. Yes, the 1:10 voting rights ratio for Founder’s share is subject to the
limited period to exceed five (5) years provided under Section 7 of the
RCC since this provision only applies to the exclusive right to vote and
be voted for including on all matters of the holding corporation.
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ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
c. No, the 1:10 voting rights ratio for Founder’s share is not subject to
the limited period not to exceed five (5) years provided under Section 7
of the RCC since this provision only applies to the exclusive right to
vote and be voted for in the election of directors.
d. None of the above

40. Who shall be the chairman of the audit committee of a corporation?

a. Chairman of the Board of Directors
b. Independent director
c. President of the Corporation
d. Compliance officer
41. To whom shall the compliance officer report directly?
a. President of the corporation
b. Chairman of the board of directors
c. Independent director
d. Chairman of the audit committee
42. The following are characteristics of a limited partnership, except:
a. It is formed by compliance in good faith with the statutory requirements.
b. One or more general partners control the business and are personally
liable to creditors.
c. One or more limited partners contribute to the capital and share in the
profits and participate in the management of the business.
d. The limited partners are not personally liable for partnership obligations
beyond their capital contributions.
43. Rosh, Juju and Anna formed a partnership where Rosh’s participation is 40%;
Juju, 40%; and Anna, 20%. Rosh and Juju would supply the entire capital. Anna
would contribute her management expertise and be manager for the first 5 years
without compensation. They also agreed that Anna shall not liable for losses.
Unfortunately, the partnership became bankrupt. What is the status of the
agreement exempting Anna from losses?
a. Valid
b. Void
c. Voidable
d. Unenforceable
44. Gem, Mondy and Maddie formed a general partnership with the following
contributions to the common fund: Gem, P20,000; Mondy, P40,000; Maddie, P60,000.
There was no agreement on the division of profits or apportionment of losses.
After some years of business operations, the assets of the partnership dwindled
to P30,000, so the partners agreed to stop their business. The partnership is
indebted to Sansa for a loan of P120,000. Under the circumstances, how much can
Sansa collect from the partners if the liability would be shared based on the
capital contribution?
a. Gem, P15,000; Mondy, P30,000; Maddie, P45,000
b. Gem, P20,000; Mondy, P40,000; Maddie, P60,000
c. Gem, P30,000; Mondy, P30,000; Maddie, P30,000
d. Gem, P40,000; Mondy, P40,000; Maddie, P40,000

45. Ruth, Carlo, Maricel, and Dustin organized a general partnership, with Ruth and
Carlo as industrial partners and Maricel, who contributed P30,000 to the common
fund, and Dustin, who contributed P10,000 to the common fund as capitalist
partners. Ruth and Carlo were both appointed managing partners without any
specification of their respective duties. When the firm commenced business
operations, the 2 appointed Olive as accountant of the firm. A year later, Ruth
decided to dismiss Olive, but this was opposed by Carlo. How can the conflict
between Ruth and Carlo be resolved?
a. Dustin and Maricel will decide.
b. Ruth and Carlo will decide.
c. Maricel will decide.
d. Ruth prevails.

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 MANAGEMENT SERVICES
ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
46. Jean and John are partners in a certain business, Jean being the managing
partner. Ruth owes Jean P50,000 (more onerous) and the partnership P100,000,
and both credits are demandable. Ruth pays Jean P30,000 and Jean issues a
receipt in the partnership’s name. How much should Jean apply to the
partnership’s credit?
a. Nothing
b. P30,000
c. P20,000
d. P10,000

47. D owes ABC partnership P10,000. D also owes A, Managing Partner of the said
partnership, P5,000. Both debts are due and demandable. D pays A P5,000 where
A issues the partnership’s receipt for such payment. How much may A validly
collect from the said transaction?
a. None
b. P10,000
c. P5,000
d. P3,000

48. Dissolution of the partnership would happen by operation of law in all of the
following instances, except:
a. When a partner contributed the usufruct of the specific property that was
lost prior to its delivery.
b. When a partner promised to contribute a specific property that was lost
prior to its delivery.
c. When a partner contributed the usufruct of the specific property that was
lost after its delivery.
d. When a partner promised to contribute a specific property that was lost
after its delivery.

49. A, B, C and D are partners to ABC Partnership. C and D are limited partners. It
was agreed that any and all liabilities are to be shared equally. By the end of
the fiscal year, the partnership’s assets were P120,000 but the liabilities
amounted to P210,000. In this case,
a. A and B are liable for P45,000 each
b. A, B and C are liable for P30,000 each
c. A, B, C and D are liable for P22,500 each
d. A and B are solidarily liable for P90,000

50. A and B are general partners in AB Partnership with outstanding liabilities of

P6,000 before the admission of C. C is admitted to the existing partnership of
A and B. After several years of operation, the total liabilities of the
partnership increased to P12,000 while the total assets of the partnership are
fully exhausted. How much may the unpaid creditor of the partnership validly
collect from C?
a. P2,000
b. P3,000
c. P4,000
d. P6,000

51. A, B and C are partners in TEN General Partnership. A and B are capitalist
partners while C is an industrial partner. It was agreed that C would be exempt
from third party liabilities. After exhaustion of the partnership assets,
partnership liabilities amounting to P30,000 remained unpaid. From whom may the
partnership creditors collect?
a. C only
b. A, B and C
c. A and B only
d. None of the partners

52. Which of the following credits shall be settled last in a general partnership?
a. Those owing to the creditors other than the partners
b. Those owing to partners other than for capital and profits
c. Those owing to partners with respect to capital contribution
d. Those owing to partners with respect to profit share

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 MANAGEMENT SERVICES
ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
53. Which of the following credits shall be settled last in a limited partnership?
a. Those owing to the limited partners
b. Those owing to the general partners other than for capital and profits
c. Those owing to the general partners with respect to profit share
d. Those owing to the general partners with respect to capital contribution

54. Which of the following has no right to inspect the partnership books?
a. Nominal partner
b. Silent partner
c. Secret partner
d. Dormant partner

55. Ms. Candy usually works in an office for forty (48) hours per week from Monday
to Saturday. She usually starts at 8:00 am and will end by 5:00 pm. One day,
she was informed by her Boss Toto that a flexible working arrangement will
immediately start on February 1, 2023, due to the pandemic and in order to
cushion and mitigate the effect of the loss of income of the employees. The
arrangement provides that the normal work week is reduced from six days (Monday
to Saturday) to four days (Tuesday to Friday) but the total number of work hours
of 48 hours per week shall remain. In effect, the normal workday is increased
from eight hours to twelve hours. Is the arrangement valid?
a. Yes, because flexible working arrangements are valid and beneficial in
terms of reduction of operational cost and helps in saving jobs while
maintaining competitiveness and productivity in industries
b. Yes, because employers and the employees are encouraged to explore
alternative schemes under any agreement and company policy or practice in
order to cushion and mitigate the effect of the loss of income of the
employees.
c. No, because prior to the implementation of the flexible work arrangements,
an employer shall first notify the DOLE regional office.
d. No, because the arrangement will be burdensome to the employee considering
that the normal workday is increased without corresponding overtime
premium.

56. How is the night shift differential pay computed on a rest day or special
holiday?
a. Plus 10% of 125% of regular hourly rate
b. Plus 10% of 130% of regular hourly rate
c. Plus 10% of 150% of regular hourly rate
d. Plus 10% of 200% of regular hourly rate
57. The meal time (lunch break) for the dining crew in Glorious Restaurant is either
from 10:00 a.m. to 11:00 a.m. or from 1:30 p.m. to 2:30 p.m., with pay. But the
management wants to change the mealtime to 11:00 a.m. to 12:00 noon or 12:30
p.m. to 1:30 p.m., without pay. Will the change be legal?
a. Yes, absent an agreement to the contrary, the management determines work
hours and, by law, meal break is without pay as a rule.
b. Yes, the management has control of its operations.
c. No, because lunchbreak regardless of time should be with pay.
d. No, because existing practice cannot be discontinued unilaterally.
58. When an employee works from 8 a.m. to 5 p.m. on a legal holiday falling on his
rest day, which of the following formulas do you use to compute for his day's
wage on that day?
a. His regular daily wage multiplied by 200% multiplied by 125%
b. His regular daily wage plus 200%
c. His daily regular wage
d. His regular daily wage multiplied by 200% multiplied by 130%
59. The following computations of premium pay for a regular holiday are correct,
except:
a. If the employee worked, he/she shall be paid 200% of his/her regular
salary
b. If the employee worked in excess of eight hours (with overtime), he/she
shall be paid an additional 25% of his/her daily rate of 200% percent
c. If the employee worked in excess of eight hours (with overtime), he/she
shall be paid an additional 30% of his/her daily rate of 200% percent
d. None of the above
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ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
60. The paternity leave shall be paid by the employer only for the first ____
deliveries by the wife of the employee.
a. Three (3) deliveries
b. Four (4) deliveries
c. Five (5) deliveries
d. Six (6) deliveries

61. For the longest time, spouses Nick and Rachel were looking to adopt their own
child. They had a housekeeper whose name was Bak Bak. Both spouses were able to
convince Bak Bak that they will take care of her son, Eleanor. Fortunately,
they were able to start with the administrative adoption process pursuant to
the new law. However, after the untimely demise of spouses due to a vehicular
mishap, Eleanor argues that she should be entitled to the SSS pension of both
spouses as dependent. Decide
a. Eleanor is correct since she was legally adopted by both spouses pursuant
to the administrative adoption process. Thus, she is a qualified dependent
b. Eleanor is not correct since she was not legally adopted at all
c. Eleanor is not correct since she is merely a secondary beneficiary
d. None of the above

62. The following are classified as social security benefits, except:

a. Sickness
b. Maternity
c. Employee Compensation
d. Retirement

63. The following are primary beneficiaries, except:

a. Dependent spouse
b. Dependent parents
c. Dependent legitimate child
d. Dependent illegitimate child

64. If a deceased member has not paid the required 36 monthly contributions prior
to the semester of death, his beneficiaries shall be entitled to the higher
between 12 times the monthly pension or:
a. Lump sum equivalent to the monthly pension times the number of monthly
contributions paid to SSS
b. Lump sum equivalent to the monthly pension 36 times the monthly pension
to secondary beneficiaries in case no primary beneficiary
c. Monthly pension to primary beneficiary and dependent’s pension to
dependents for 36 monthly contributions
d. Monthly pension at the time the member dies

65. In 1993, Gerald took out a life insurance policy from X Life Insurance
Corporation designating Rich, her niece as beneficiary. In 1996, when the
insurance policy had been in force for more than two years and seven months,
Gerald died. X Life Insurance Corp. denied the claim on the ground that there
was a misrepresentation. Is the policy already incontestable?
a. Yes, the incontestability clause precludes the insurer from raising the
defense against false representation or concealment provided the
insurance has been in force for a period of one (1) year
b. Yes, the incontestability clause precludes the insurer from raising the
defense against false representation or concealment provided the
insurance has been in force for a period of two (2) years
c. Yes, the incontestability clause precludes the insurer from raising the
defense against false representation or concealment provided the
insurance has been in force for a period of three (3) years
d. No, the incontestability clause merely precludes the insurer from raising
the defense if the ground is mental incapacity of the policy holder

66. The contract of good faith in an insurance policy for the benefit of the insurer
and insured is also known as:
a. Contract of Adhesion
b. Uberrimae fides
c. Res Perit Domino
d. Res ipsa loquitor

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ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
67. Insurable interest in a life insurance policy must exist:
a. At the time insurance takes effect
b. At the time the protected risk occurs
c. At the time insurance takes effect and at the time of loss
d. At the time insurance takes effect and at the time of loss but need not
exist in the meantime

68. Insurable interest in a property insurance policy must exist:

a. At the time insurance takes effect
b. At the time the protected risk occurs
c. At the time insurance takes effect and at the time of loss
d. At the time insurance takes effect and at the time of loss but need not
exist in the meantime

69. The legitimate wife and children of Juan Dela Cruz are asking for the revocation
or reduction in the insurance proceeds designated to Juan’s common law wife and
illegitimate child, Janice. To whom should the designated proceeds go?
a. Common law wife and Janice
b. Janice only
c. Legitimate wife and children
d. Estate of the insured

70. In case of change in interest (transfer of property), as a rule, the policy is

suspended until a person becomes the owner of both the policy and the thing
insured. In which of the following cases will there be no suspension?
a. If the transfer occurs after the happening of the injury or loss insured
against
b. If the transfer occurs before the happening of the injury or loss insured
against
c. If there is a transfer of one or more (but not all) properties covered by
one policy
d. Transfer by will or succession (Death of the insured)

71. On June 1, 2023, X Mailed to Y Insurance Co. his application for life insurance
with payment of insurance premiums. On July 21, 2023, the Insurance Company
accepted the application and mailed on the same day its acceptance. It reached
X’s residence on July 25, 2023. However, on July 24, 2023, X figured in a car
accident. He died a day later. May X’s heirs recover on the insurance policy?
a. Yes, since under the Cognition Theory, the insurance contract was
perfected upon acceptance by the insurer of X's application.
b. No, since there is no privity of contract between the insurer and X’s
heirs.
c. No, since X had no knowledge of the insurer's acceptance of his
application before he died.
d. Yes, since under the Manifestation Theory, the insurance contract was
perfected upon acceptance of the insurer of X's application.

72. Which of the following cases of non-payment of premium shall avoid the insurance?
a. Claim of a third party who was a victim in a vehicular mishap on the
Compulsory Motor Vehicle Liability Insurance (CMVLI)
b. Premium was only partially paid, and the insured was sued for the balance
at the time the loss occurred
c. Premium was not paid but the grace period in life insurance had not yet
expired at the time of death of the insured
d. Parties not bound by estoppel

73. One of the following is not an element of the incontestability clause in life
insurance.
a. It is applicable to all kinds of life insurance policies.
b. The period of 2 years may be shortened, but it cannot be extended.
c. The period is reckoned from the date of the policy or date of its
reinstatement.
d. It is founded on the principles of estoppel.

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 MANAGEMENT SERVICES
ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
74. Taxi Driver Deesong, driving recklessly, killed a pedestrian and his passenger.
What is/are the sources of Deesong’s obligation?
a. Culpa criminal and culpa acquiliana
b. Culpa criminal only
c. Culpa criminal and culpa contractual
d. Culpa criminal, culpa acquiliana and culpa contractual

75. Which of the following donations need not be in writing?

a. Real property valuing more than P5,000
b. Real property valuing less than P5,000
c. Personal property valuing more than P5,000
d. Personal property valuing P5,000

76. Which of the following obligations is not enforceable by a court action?

a. Legal obligation
b. Contractual obligation
c. Civil obligation
d. Natural obligation

77. What minimum quantum of evidence must be proved by an offended party to be

entitled to civil damages arising from crime or delict?
a. Proof beyond reasonable doubt
b. Clear and convincing evidence
c. Preponderance of evidence
d. Substantial evidence

78. In an obligation to do whereby only the debtor can do the thing, what is the
remedy of the creditor if the debtor fails to do the prestation?
a. Action for specific performance with damages.
b. Action for annulment of obligation with damages.
c. The creditor or third person may do it in a proper manner at the expense
of the debtor.
d. Action for indemnification for damages.

79. What law shall governs dation in payment or dacion en pago as a mode to
extinguish an obligation?
a. Law on Contracts
b. Law on Obligation
c. Law on Sales
d. Law on Chattel or Real Estate Mortgage

80. On September 18, 2023, Passenger X boarded M/V Prince of the Moon bound for
Cebu City from Manila. The travel commenced smoothly although there was an
anticipated typhoon. However, about two (2) hours after, while he was lying in
his cabin, he heard a loud sound which lasted for about 30 minutes. He went out
of his cabin and saw other passengers already panicking. He went to the upper
level where he grabbed a life jacket. He stayed there until the ship eventually
sank. He went with the ship underwater but was able to swim therefrom and hold
on to a life raft. Eventually, he was rescued by a chopper at about 2:30 or
3:00 in the afternoon of the next day after being in the water for about 15
hours.

He lost P10,000 in cash, shoes, watch and important documents. Apart from
hospital bills, the owner of the ship paid him P5,000. Accordingly, passenger
X was only able to testify but was not able to proffer pieces of evidence such
as official receipts supporting his claims.

Based on the facts presented above, the following are the damages that can be
claimed by Passenger X, except:
a. Moderate damages
b. Exemplary damages
c. Actual damages
d. Moral damages

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ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam

81. Statement 1: Robbery per se is considered as a fortuitous event

Statement 2: The burden of proving that the loss was due to a fortuitous event
rests on both parties in an obligation
a. Both statements are true.
b. Both statements are false
c. Only the first statement is true.
d. Only the second statement is true.

82. Liam, Gab, and Apple wrote a promissory note which states “I promise to pay
P30,000 to Des with the following maturity dates, October 4, 2023 for Liam’s
share, November 5, 2023 for Gab’s share, and December 7, 2023 for Apple’s share.
How much may Des collect from Apple if today is October 4, 2023.
a. None
b. P10,000
c. P20,000
d. P30,000

83. Jack, Jen, Jamil are solidarily liable to Xyra for P30,000. Jack is insolvent.
Xyra condoned Jen’s obligation. Which of the following statements is correct?
a. Jamil is liable Xyra in the amount of P10,000 only
b. Jen is still liable to Xyra in the amount of P20,000
c. Xyra may only collect P10,000 from Jen
d. Xyra may only collect P10,000 from Jamil

84. D is indebted in the amount of P10,000 to C. With the agreement of D, T paid

P8,000 to C for D’s obligation to C. After such payment, D has remaining assets
with realizable value of P3,000. How much will be received by T out of such
remaining assets of P3,000?
a. P3,000
b. P2,000
c. P1,000
d. P2,400

85. It refers to the right of unpaid creditor to exercise all rights and actions of
the judgment debtor to recover his claim, except those rights which are
inherently personal to the latter.
a. Accion subrogatoria
b. Accion pauliana
c. Accion directa
d. Accion publiciana

86. It refers to the right of unpaid creditor to to ask for the rescission or
cancellation of the contracts made by the debtor in fraud of former’s rights.
a. Accion subrogatoria
b. Accion pauliana
c. Accion directa
d. Accion publiciana

87. Which of the following obligations is immediately demandable?

a. Obligation ex die
b. Obligation in diem
c. Obligation with a suspensive condition
d. Obligation payable as soon as possible

88. It refers to a meeting of minds between two persons whereby one binds himself,
with respect to the other, to give something or to render some service.
a. Contract
b. Obligation
c. Agreement
d. Right

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 MANAGEMENT SERVICES
ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
89. As an exception to relativity of contract, which defective contract may be
assailed by a third person?
a. Voidable contract
b. Rescissible contract
c. Unenforceable contract
d. Contract with stipulation pour atrui

90. Formal contracts are perfected by:

a. Execution of the required formality by law
b. Meeting of the minds or through consent
c. Delivery
d. By operation of law

91. H and W entered into a contract of marriage on year 1990 without any prenuptial
agreement. H, through force and intimidation, compelled W to give consent and
to sign the deed of sale involving the exclusive property of W to H at a bargain
price of P100,000 whereby W suffered lesion amounting to P30,000. What is the
status of the contract?
a. Rescissible contract
b. Voidable contract
c. Unenforceable contract
d. Void contract

92. H and W entered into a contract of marriage on year 2020 with prenuptial
agreement of complete separation of property regime. H, through force and
intimidation, compelled W to give consent and to sign the deed of sale involving
the exclusive property of W to H at a bargain price of P500,000 whereby W
suffered lesion amounting to P130,000. What is the status of the contract?
a. Rescissible contract
b. Voidable contract
c. Unenforceable contract
d. Void contract

93. H and W celebrated their marriage on August 3, 1989. H, without the consent of
W, sold their community property to Janet, a third party. What is the status of
the contract?
a. Rescissible contract
b. Voidable contract
c. Unenforceable contract
d. Void contract

94. There are certain contracts for which the law prescribes certain forms for their
validity. The following are contracts which should appear in writing to be valid
and enforceable, except:
a. Sale of a piece of land or any interest therein through an agent
b. Antichresis
c. Partnership where immovable property or real rights are contributed
d. Donation of personal property whose value exceeds P5,000

95. There are certain contracts for which the law prescribes certain forms for their
validity. Which of the following contracts should appear in a public instrument
to be valid:
a. Agreements regarding payment of interest in a contract of loan
b. Sale of real property by its absolute registered owner
c. Donation of immovable property
d. Partnership where a movable property is contributed

96. What is the status of the intended (hidden part) contract in case there is
relative simulation?
a. Valid and binding
b. Voidable
c. Void
d. Unenforceable

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 MANAGEMENT SERVICES
ReSA Batch 47 – May 2024 CPALE Batch
17 February 2024  3:00 PM to 5:00 PM RFBT First Pre-Board Exam
97. What is the status of the ostensible contract in case there is relative
simulation?
a. Valid and binding
b. Voidable
c. Void
d. Unenforceable

98. What is the status of the contract where A, a minor, bought B’s, of legal age,
car worth P1,000,000.
a. Valid
b. Void
c. Voidable at the option of A
d. Voidable at the option of B

99. In the following instruments, no reformation shall be allowed, except:

a. Pacto de retro sale intended to be loan with mortgage
b. Simple donation inter vivos
c. Wills
d. Absolutely simulated contracts

100. The following are the characteristics of unenforceable contracts, except

a. They are valid but cannot be compelled or enforced through court action.
b. They may be assailed by third persons.
c. They are susceptible of ratification.
d. Formality required for evidentiary purposes only.

- END of EXAMINATION -

KEY ANSWERS
1 D 26 B 51 B 76 D
2 A 27 B 52 D 77 C
3 B 28 B 53 D 78 D
4 B 29 A 54 A 79 C
5 C 30 D 55 C 80 C
6 D 31 B 56 B 81 B
7 C 32 A 57 A 82 B
8 D 33 B 58 D 83 B
9 A 34 A 59 B 84 C
10 A 35 D 60 B 85 A
11 D 36 B 61 B 86 B
12 A 37 D 62 C 87 B
13 C 38 A 63 B 88 A
14 A 39 C 64 A 89 B
15 B 40 B 65 B 90 A
16 A 41 B 66 B 91 D
17 A 42 C 67 A 92 B
18 D 43 A 68 D 93 D
19 A 44 A 69 B 94 C
20 A 45 C 70 B 95 C
21 C 46 B 71 C 96 A
22 D 47 A 72 D 97 C
23 B 48 D 73 A 98 C
24 A 49 B 74 D 99 A
25 A 50 A 75 D 100 B

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