ACC 216 Oblicon Notes PDF

College of Accounting Education 3rd Floor, PET Building McArthur Highway, Davao City Phone No.: (08...

College of Accounting Education 3rd Floor, PET Building McArthur Highway, Davao City Phone No.: (082)300-5456 Local 137 ACC 216 General Review Instruction: Select the appropriate response. 1. The following statements concerning payment by cession are true, except one. Which is it? a. The creditors become the owners of the properties of the debtor that were ceded to them. b. Payment by cession extinguishes the obligations only to the extent covered by the proceeds of the sale of the debtor’s properties. c. The debtor must be insolvent. d. Cession affects all the properties of the debtor except that exempt from execution. 2. The delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of performance is known as: a. Payment by cession. b. Dation in payment. c. Application of payment. d. Consignation. 3. The offer made by the debtor to pay his obligation to his creditor is known as: a. Consignation. b. Tender of payment. c. Application of payment. d. Dation in payment. 4. M owes P P10,000.00. The obligation is evidenced by a promissory note. Subsequently, P assigned the note to A, A to B, B to C back to M. The obligation of M is extinguished by: a. Compensation. b. Confusion. c. Condonation. d. The obligation is not extinguished because there was no payment. 5. A contract of sale is not a a. Principal contract b. Nominate contract c. Consensual contract d. Real Contract 6. “I promise to pay P or his order the sum of P 10,000.00 30 days after the death of X.” This is an instrument payable: a. At a determinable future time b. On Demand c. Upon the fulfillment of a condition d. At an indefinite time, hence, non-negotiable POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 7. A with violence in her eyes intimidated her husband B to sell his exclusive property to her. The contract of sale is a. Rescissible b. Voidable c. Unenforceable d. Void 8. Three of the following instances will render an offer ineffective before acceptance is conveyed. Which one will not? a. Civil interdiction of either party b. Insanity of either party c. Intoxication of either party d. Insolvency of either party 9. Payment made to a third person is valid to extinguish the obligation of the debtor to the creditor in the following cases, except: a. After payment to the creditor, the third person acquires the creditor’s right. b. When the creditor ratifies the payment to the third person. c. When through the creditor’s conduct, the debtor was led to believe that the third person had authority to receive payment. d. When the third person is subrogated to the rights of the creditor. 10. N, R and J solidarily bound themselves to deliver to S a Honda motorcycle valued at P 60,000. The obligation was not fulfilled through the fault of J. Thereupon, S filed an action in court against N and the court awarded P 72,000 to S representing the value of the motorcycle plus damages. Which of the following situation is valid? a. If N pays S the P 72,000, N can collect R and J P 24,000 each b. S has to collect P 24,000 each from N, R and J to satisfy the court’s award of P 72,000 c. N can refuse to pay the penalty because it should be charged against J, the guilty party d. If S succeeds in collecting the P 72,000 from N, N in turn can collect from R P 20,000 and from J P 32,000 11. P authorized A, a minor, to sell his car for P 1,000,000 in cash. A sold the said car to X on installment at a lesser price of P 900,000. P is now repudiating the contact with X on the ground that he is not bound to since X contracted with a minor who exceeded his authority. Decide. a. P is liable under the contract because it is enough that the principal is capacitated since he is the one entering into the contract. b. P is not liable for the sale on installments since it is unenforceable because his agent acted beyond his powers c. P is not liable because the agent is a minor with whom X contracted d. P is liable provided the sale is in cash for P 1,000,000. 12. A gets a loan of P 1,000,000 from B which becomes due on October 1, 2008 and mortgaged his house as security for the debt. On June 30, 2008, the mortgaged house completely destroyed the fire through the fault of C. A week later, B demanded payment from A. Is B’s demand valid? a. No, the destruction of the house was not thru the fault of A. b. No, the obligation is one with a definite period which is deemed intended for the benefit of both the debtor and creditor c. Yes, the debt becomes demandable unless A can give another security equally satisfactory d. Yes, the debt becomes demandable even if A can give another security equally satisfactory POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 13. One of the following characteristics of dacion en pago is also a characteristic of a contract of sale. Which is it? a. There is a pre-existing credit b. Obligations are extinguished c. There is less freedom in fixing the price d. Ownership of the object transferred to the other party 14. An obligation where various prestations are due but the performance of all of them is required in order to extinguish the obligation is known as: a. Alternative obligation b. Facultative obligation c. Conjunctive obligation d. Simple obligation 15. It is an affirmation of fact or any promise by the seller relating to the thing which has a natural tendency to induce the buyer to purchase the same, relying on such promise or affirmation. a. Condition b. False representation c. Warranty d. Seller’s talk 16. Which of the following contacts is rescissible? a. Contracts entered into during a hypnotic spell b. Contracts entered into in a state of drunkenness c. Contracts entered into to defraud creditors when the latter cannot collect the claims due them d. Contracts where both parties are incapable of giving consent 17. Which among the following contracts is void? a. A contract of barter between S, insane, and B, 17 years old b. A contract of sale where B, the buyer, twisted the arm of S, the seller, so that S would sign the deed of sale c. A contract of sale where B, the buyer, aimed a gun at the wife of S, so that S would sign the deed of sale d. A contract for the sale of a cow which is suffering from a contagious disease 18. A, B, C and D, joint debtors, are obliged to give V, W, X, Y and Z, solidary creditors, P 20,000.00 a. V may collect B P 20,000 b. V may collect from B P 4,000 c. V may collect from B P 5,000 d. V may collect from B P 1,000 19. Which is not true about novation? IT is the modification of an obligation by: a. Changing the principal object b. Substituting the person of the debtor c. Substituting the person of the creditor d. Subrogating a third person in the rights of the creditor POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 20. It is the conveyance of ownership of a thing as an accepted equivalent of performance a. Cession b. Performance c. Payment d. Adjudication en pago 21. 1st: Although the guarantor is only substantially not principally bound, he is given the right to set up compensation as regard what the creditor owes the principal debtor. 2nd: Consent of the parties is not required in legal compensation. a. Both are true b. Both are false c. 1st is true; 2nd is false d. 1st is false; 2nd is true 22. A requirement in compensation requiring the absence thereof. It refers to the credit of one of the parties is subject to the satisfaction of the claims of third persons. a. Retention b. Controversy c. Dispute d. Conflict 23. C is the creditor of D in the amount of P 50,000 G is the guarantor of D. D paid C partially with P 20,000. A not knowing the partial payment of D and against the will of D , paid the amount of P 50,000. What is the effect of this payment in the obligation? a. The obligation is not extinguished A’s payment being agains the will of D does not extinguish the obligation. b. The obligation is extinguished A can demand P 30,000 from D but if D cannot pay, A cannot ordinarily proceed against guarantor G because A is not entitled of subrogation. c. The obligation is extinguished A cannot recover any amount from D, but A can demand reimbursement from G in the amount of P 50,000. d. The obligation is not extinguished. A can demand P 30,000 from D because this amount benefited D, or A having been subrogated into the rights of C, can proceed against the guarantor G. 24. Which statement is correct? a. Condonation is gratuitous b. Condonation is onerous c. Condonation is essentially gratuitous d. Condonation is generally gratuitous POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 25. Case 1: D owes C P 5,000 which is due today. In here, C can refuse to accept a check from D, however, if C accepts the check, there is already payment on the part of D. Case2: Lolong obliged himself to give 100 grams of shabu to Lilong. Later the parties agreed that Lolong would instead give to Lilong 20 sacks of rice. In here the new obligation is only voidable because Lolong had not yet performed the original obligation at the time of the novation. a. Both are true b. Both are false c. 1st is true; 2nd is false d. 1st is false; 2nd is true 26. The following are primary modes of extinguishing obligations. Which is not? a. Confusion b. Compensation c. Condonation d. Compromise 27. Three of these are characteristics of payment by cession. Which is the exception? a. More than one debt b. Complete or partial insolvency c. Abandonment of all the debtor’s properties except those exempt from execution d. One debtor, one credito 28. The following are special form of payment, except: a. Dation in payment b. Payment by cession c. Tender of payment and consignation d. Compensation 29. A has two creditors, B and C. B is a mortgage creditor for P 20,000, and C is an ordinary creditor for P 10,000. C paid A’s debt of P 20,000 to B. 1st- If C’s payment is with A’s knowledge, C will be subrogated in the rights of B. 2nd- If C’s payment is without A’s knowledge, C will not be subgrogated in the rights of B. a. Both are true b. Both are false c. 1st is true; 2nd is false d. 1st is false; 2nd is true 30. The substitution or change of an obligation by another, which extinguishes or modifies the first, by changing its object is called: a. Personal obligation b. Real novation c. Merger of things or rights d. Conventional compensation POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 31. Meeting in one person of the characteristics of both debtor and creditor in one and the same obligation extinguishes the obligation by way of: a. Merger or confusion b. Condonation or remission c. Novation d. Compensation or set off 32. In which of the following cases will the loss of a determinate thing extinguishes the obligation? ANALYSIS a. When the nature of the obligation requires the assumption of risk b. When it is stipulated by the parties c. When the loss is due to mora solvendi d. When the debtor has promised to deliver the same thing to two or more persons who so not have the same interest. 33. A owes B P 2,000 demandable and due on September 10, 2015. B on the other hand, owes A P 2,000 demandable and due on or before September 20, 2015. If B claims compensation on September 10, 2015, can A rightfully oppose? a. No. B who was giving the benefit of the term, may claim compensation because he could then choose to pay his debt on September 10, 2015 which is actually “ on or before September 20, 2015.” b. Yes, A can properly oppose because for compensation to take place, mutual consent of both parties is necessary. c. Yes, A can properly oppose and if B still refuses to accept his payment made on September 20, 2015, A can deposit his payment in court. d. None of the above. 34. In novation, which of the following is incorrect? ANALYSIS a. If the new obligation is void, original obligation shall subsist. b. In expromission, the insolvency of the new debtor shall not revive the action of the creditor against the original debtor. c. If the original obligation is subject to a suspensive condition, the new obligation is not subject to the same condition unless stated. d. While if the condition is resolutory the new is also resolutory condition, unless otherwise stated. 35. Requisites of application of payment, except. a. Debts are all due. b. Debts are of different kinds c. Two or more debts d. One debtor and one creditor POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 36. 1st: Merger taking place in the person of the guarantor shall extinguish only the secondary contract such as the contract of guaranty but not the principal obligation. 2nd: When the debtor promises to pay his obligation “whenever his means permit him to do so” the obligation is with a period. a. Both are true b. Both are false c. 1st is true; 2nd is false d. 1st is false; 2nd is true 37. 1st: Payment made to an incapacitated creditor is not valid, when the payment is not beneficial to him. 2nd: Payment made by a third person who does not intend to be reimbursed by the debtor is deemed to be a donation, even without debtor’s consent. a. Both are true b. Both are false c. 1st is true; 2nd is false d. 1st is false; 2nd is true 38. Case 1: D owes C P 30,000. Ader, a third person and without any intention to be reimbursed by D, paid the debt without the consent of D. C accepted the payment. In here, the payment may be considered valid if T had the intention to be reimbursed. Case2: D is indebted to C for P 20,000 which is due on January 9. C owes D P 15,000 which was due on January 5. On January 8, C assigned his credit right to T. D gave his consent to the assignment but did not reserve his right to the compensation. In here, T may collect only P 5,000 from D on January 9. a. Both are true b. Both are false c. 1st is true; 2nd is false d. 1st is false; 2nd is true 39. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. From perfection, parties are bound not only to the fulfilment of what has been expressly stipulated but also to all the consequences which according to their nature, may be in keeping with good faith, usage and law. This is known as the principle of: a. Consensuality of contract b. Consummation of contract c. Obligatory force of contract and compliance in good faith d. Mutuality of contract 40. Three of the following instances will render an offer ineffective before acceptance is conveyed. Which one will not? a. Intoxication of either party b. Insanity of either party c. Civil interdiction of either party d. Insolvency of either party POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 41. On May 5, 2015, S offered to sell a specific car to B for P 500,000. B sent his letter of acceptance to S on May 8, 2015. On May 10, 2015, however, S was murdered and died. His secretary received the letter of acceptance on May 12, 2015 unaware that S has already died. a. The contract was perfected on May 5, 2015 because the acceptance made by B on May 8, 2015 retroact to the date of the offer. b. The contract is perfected on May 12, 2015 when the secretary of S received the letter of acceptance. c. The contract was perfected on May 8, 2015 when B sent his letter of acceptance d. The contract was not perfected because the offer of S became ineffective when he died. 42. The stages of a contract according to the order of their occurrence are: a. Termination negotiation and birth b. Generacion, perfection and consummation c. Conception, consummation and birth d. Perfection, negotiation and termination 43. The elements exist only when they are expressly provided by the parties: a. natural element b. Essential element c. accidental element d. Original element 44. A contract is in the stage of conception when: a. There is meeting of the minds. b. Negotiations are in progress. c. The parties come to an agreement. d. The contract is perfected. 45. Contracts entered into in a state of drunkenness or during a hypnotic spell are: a. valid b. Void c. legal d. Voidable 46. In contracts of pure beneficence, the cause or consideration is a. Merely liberality of the benefactor b. Payment c. Services rendered d. None of the above 47. In this kind of contract, the cause is understood to be, for each contracting party, the prestation or promise of a thing or service by the other a. Onerous b. Contracts of pure beneficence c. Remuneratory d. All of them POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 48. When through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which without them he would not have agreed to. This is— a. Violence b. Undue influence c. Intimidation d. Fraud 49. As a general rule, one of the enumeration is not a requisite for the existence of a valid contract a. Consent of the contracting parties b. Object certain which is the subject matter of the contract c. Cause of the obligation which is established d. Delivery 50. It is the manifestation of the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. a. Consideration b. Cause c. Consent d. Contract 51. One of the following is not incapable of giving his consent. a. Insane persons b. Deaf- mutes who do not know how to write c. Deaf mutes who knows how to read d. Unemancipated minors 52. Lu Uy died leaving properties estimated at P 10,000,000 to his sons Dah and Tuh. Subsequently, Dah sold one half of his inheritance to X for P 3,000,000, although his share was still to be delivered. a. The contract is unenforceable b. The contract is valid since the inheritance is an existing inheritance. c. The contract is void because what Dah sold is future inheritance which may not be the object of a contract as a rule. d. The contract is recissible. 53. A contract that does not have a special name under the law is known as: a. Nominate contract b. Nominal contract c. Special contact d. Innominate contract 54. A, B and C are joint and several liable to D amounting to P 900,000. D allows C an extension of two years within which to pay his portion of the indebtedness. In this case: a. D can compel A or B to pay him the entire P 900,000. b. D can compel A or B or C to pay him P 600,000. c. D can demand only P 300,000 each from A and B. d. D can compel only A or B to pay him P 600,000. POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 55. Which of the following illustrates suspensive period? a. Ayeng will support Baby until end of 2010. b. Ayeng will support Baby if Candy will not marry Bob. c. Ayeng will support Bob after the death of Candy’s father. d. Ayeng will support Baby until Bob passes the CPA board exams. 56. An obligation where several prestations are due but the performance of one is sufficient is. a. Facultative b. Alternative c. Divisible d. Joint 57. An obligation which is not subject to any condition and no specific date is mentioned for its fulfilment and is therefore immediately demandable is: a. Indivisible obligation b. Alternative obligation c. Pure obligation d. Solidary obligation 58. Which of the following is not a conditional obligation?- und a. Ace is to pay Walter P 5,000 if he has the means. b. Edward is to give Son a Toyota Hilux pickup if Son marries Cheng. c. Cherie is to give her puppy to Grace if her cat dies due to rabies. d. Kim is to give Kate P 10,000 if Kate passes the Mockboard examination. 59. “ I will give this ring provided that if I like to have it back, you will return the same to me”. The obligation is a. Void because the fulfilment depends upon the sole will of the debtor. b. Void because the fulfilment depends upon the sole will of the creditor. c. Valid because the condition merely causes the loss of rights previously acquired. d. Valid, but the condition being potestative on the part of the debtor will be disregarded. 60. What are the effects of the loss of the prestation in an alternative obligation where the right belongs to the debtor and the loss is due to his fault? UND A. If only one remains, the obligation still subsists, but it ceases to be alternative as it becomes a simple obligation. B. If two or more objects remain, the obligation still subsists retaining its alternative character. C. If none remains, the obligation is extinguished because he chose not to give anything. a. A and B are the effects b. B and C are the effects c. A and C are the effects d. A,B, and C are the effects POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 61. A, B and C jointly and severally obligated themselves to deliver to X a determinate car worth P 600,000. On due date, because fo B’s fault, said car was not delivered causing a P 9,000 damage to X. B is insolvent. ANL a. X can collect from A, B and C P 203,000 each. b. X can collect from X C the whole of P 609,000 and collect reimbursement from A P 200,000 only. c. X can collect from C the whole amount of P 609,000 and collect reimbursement from A in the amount of P 304, 500. d. X can collect form A the sum of P 600,000 only because he is not the party at fault but can recover reimbursement from C in the whole amount of P 309,000. 62. A, B, and C are solidary debtors of D in the amount of P 150,000. D remitted A’s share. B paid D P 100,000. How much can B demand from C if B will ask for reimbursement? Kinds of obligations- a. P 100,000 b. P 150,000 c. P 50,000 d. P 0 63. Obligation which is susceptible of partial performance based on the purpose of the obligation: a. solidary b. Divisible c. joint d. Indivisible 64. An obligation arising from the meeting of minds of parties. a. Natural Obligation b. Contractual Obligation c. Legal Obligation d. Quasi-contract 65. Defense of good father of a family in the selection and supervision of employee is a proper and complete defense in: a. Culpa Contractual b. Culpa Criminal c. Culpa Aquilana d. Both B and C 66. When X went to Mt. Everest for a month vacation, he asked his neighbor Y to watch for his house when he was away with a promise to give Y souvenirs from Mt. Everest when he returns, with such, Y agreed. When X was away, a thief broke into his house, Y had seen the thief getting out the house, apprehended such but the thief with his gun, shot Y in his left arm then ran away leaving the things he took from X’s house. In here, X is liable to Y because of his obligation to Y arising from: a. Quasi- Contract b. Contract c. Negotiorum Gestio d. Quasi- Delict POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE. 67. S1- Obligation derived from law are presumed except those found in the civil code or in special laws. S2- Prestation is the legal tie which binds the parties to the obligation; otherwise known as juridical tie or vinculum juris. a. Both are true b. Both are false c. 1st is true; 2nd is false d. 1st is false; 2nd is true 68. The following are the elements of an obligation, except: REM a. Passive subject, debtor or obligor. b. Active subject, creditor, or oblige. c. Efficient cause d. Demand 69. Which of the following is not a source of an obligation? UND a. Law b. Delicts c. Quasi- Contracts d. Damages 70. Demand is necessary in order that delay may exist in one of the following. This is a. When there is stipulation or the parties so agrees b. When one of the parties in reciprocal obligation fulfils his obligation c. When demand would be useless, as when the obligor has rendered it beyond his power to perform. d. When from the nature and circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service to be rendered is the controlling motive of the contract. POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE.