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CPA REVIEW SCHOOL OF THE PHILIPPINES REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS COVERAGE: Cooperative Code Direction: Read and select the best answer for the following questions. 1. What is the title of Republic A...

CPA REVIEW SCHOOL OF THE PHILIPPINES REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS COVERAGE: Cooperative Code Direction: Read and select the best answer for the following questions. 1. What is the title of Republic Act No. 9520? a. Philippine Cooperative Code of 2008 b. Cooperative Code of the Philippines of 2004 c. Cooperative Law of the Philippines of 2006 d. Philippine Cooperative Law of 2010 2. It is an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles. a. Corporation b. Cooperative c. Joint Venture d. Association 3. Which of the following is not a cooperative principle? a. Democratic Member Control b. Autonomy and Independence c. Involuntary and Close Membership d. Concern for Community 4. Which of the following is not a cooperative principle? a. Education, Training and Information b. Cooperation among Cooperatives c. Member Economic Participation d. Taxability of Cooperatives 5. This cooperative principle means that Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, cultural, political or religious discrimination. a. Democratic Member Control b. Voluntary and Open Membership c. Autonomy and Independence d. Concern for Community 6. It refers to the government agency created by Cooperative Code entrusted with the supervision and regulation of cooperatives in the Philippines. a. Securities and Exchange Commission (SEC) b. Bangko Sentral ng Pilipinas (BSP) c. Cooperative Development Authority (CDA) d. Insurance Commission (IC) 7. It refers to a type of audit wherein the cooperative assesses its social impact and ethical performance vis-à-vis its stated mission, vision, goals and code of social responsibility for cooperatives to be established by the CDA in consultation with the cooperative sector. a. Social Audit b. Performance Audit c. Financial Statements Audit d. Compliance Audit 8. It refers to a type of audit on the efficiency and effectiveness of the cooperative as a whole; its management and officers; and its various responsibility centers as basis for improving individual team or overall performance and for objectively informing the general membership on such performance. a. Social Audit b. Performance Audit c. Financial Statements Audit d. Compliance Audit CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 1 of 20  9. It refers to a type of cooperative that is undertaking activities which are related to its main line of business or purpose. a. Single-Line or Single-Purpose Cooperative b. Service Cooperative c. Multi-Purpose Cooperative d. Subsidiary Cooperative 10. It is a type of cooperative that promotes cooperativism among its members and the public through socially-oriented projects, education and training, research and communication, and other similar activities to reach out to its intended beneficiaries. a. Education Cooperative b. Advocacy Cooperative c. Training Cooperative d. Learning Cooperative 11. It is a type of cooperative that promotes and undertakes savings and lending services among its members. It generates a common pool of funds in order to provide financial assistance to its members for productive and provident purposes. a. Insurance Cooperative b. Credit Cooperative c. Cooperative Bank d. Financial service Cooperative 12. It is a type of cooperative that is organized for the primary purpose of engaging in savings and credit services and other financial services. a. Insurance Cooperative b. Credit Cooperative c. Cooperative Bank d. Financial service Cooperative 13. It is a type of cooperative the primary purpose of which is to procure and distribute commodities to members and non- members. a. Marketing Cooperative b. Producers Cooperative c. Consumers Cooperative d. Client Cooperative 14. It is a type of cooperative that combines two (2) or more of the business activities of these different types of cooperatives. a. Multi-purpose Cooperative b. Single-line Cooperative c. Dual-purpose Cooperative d. No-purpose Cooperative 15. It is a type of cooperative the members of which are natural persons. a. Primary Cooperative b. Secondary Cooperative c. Tertiary Cooperative d. Intermediate Cooperative 16. It is a type of cooperative that engages in medical and dental care, hospitalization, transportation, insurance, housing, labor, electric light and power, communication, professional and other services. a. Consumers Cooperative b. Producers Cooperative c. Credit Cooperative d. Service Cooperative 17. It is a type of cooperative organized for the primary purpose of undertaking power generations, utilizing renewable energy sources, including hybrid systems, acquisition and operation of subtransmission or distribution to its household members. a. Electric Cooperative b. Insurance Cooperative c. Water Service Cooperative d. Dairy Cooperative CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 2 of 20  18. It is a type of cooperative organized to assist or provide access to housing for the benefit of its regular members who actively participate in the savings program for housing. It is co-owned and controlled by its members. a. Transport Cooperative b. Housing Cooperative c. Workers Cooperative d. Fishermen Cooperative 19. It is a type of cooperative organized by workers, including the self-employed, who are at same time the members and owners of the enterprise. Its principal purpose is to provide employment and business opportunities to its members and manage it in accordance with cooperative principles a. Transport Cooperative b. Housing Cooperative c. Workers Cooperative d. Fishermen Cooperative 20. It is a type of cooperative whose members are engaged in the production of fresh milk which may be processed and/or marketed as dairy products. a. Dairy Cooperative b. Meat Cooperative c. Vegetable Cooperative d. Fruits Cooperative 21. The following are the purposes of a cooperative, except a. To encourage thrift and savings mobilization among the members b. To generate funds and extend credit to the members for productive and provident purposes c. To encourage among members systematic production and marketing d. To promote monopoly and restraint of trade 22. Which of the following is a purpose of a cooperative? a. To promote and advance the economic, social and educational status of the members b. To discriminate against non-members of a cooperative c. To discourage self-help or self-employment as an engine for economic growth and poverty alleviation d. To provide goods and services and other requirements to the non-members 23. Which of the following is the purpose of a cooperative? a. To encourage thrift and savings mobilization among the members b. To maximize the control of wealthy people of businesses c. To acquire land for development as condominium projects for commercial purposes d. To advocate strike, rally and boycott 24. Which of the following is not a purpose of a cooperative? a. To promote and advance the economic, social and educational status of the members b. To encourage and promote self-help or self-employment as an engine for economic growth and poverty alleviation c. To generate funds and extend credit to the members for productive and provident purposes; d. To create monopoly or business considered as restraint of trade 25. Which of the following is an objective of a cooperative? a. To provide goods and services to its members to enable them to attain increased income, savings, investments, productivity, and purchasing power, and promote among themselves equitable distribution of net surplus through maximum utilization of economies of scale, cost-sharing and risk-sharing b. To teach members of inefficient ways of doing things in a cooperative manner c. To allow the higher income and more privileged groups to increase their ownership in the wealth of the nation d. To provide minimal social and economic benefits to its members 26. The following are the functions of a Federation of Cooperatives, except a. To carry on any cooperative enterprise that complements augments, or supplements but does not conflict, complete with, nor supplant the business or economic activities of its member cooperatives. b. To carry on, encourage, and assist educational and advisory work relating to its member cooperatives. c. To render services designed to encourage simplicity, efficiency, and economy in the conduct of the business of its member cooperatives and to facilitate the implementation of their bookkeeping, accounting, and other systems and procedures. d. To print, publish, and circulate any newspaper or other publication in the interest of its member cooperatives and enterprises. e. To coordinate and facilitate the activities of its member cooperatives. f. To develop the cooperative movement in their respective jurisdictions. CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 3 of 20  27. The following are the purposes of Cooperative Unions, except a. To represent its member organizations. b. To acquire, analyze, and disseminate, economic, statistical, and other information relating to its members and to all types of cooperatives within its area of operation. c. To sponsor studies in the economic, legal, financial, social and other phases of cooperation, and publish the results thereof. d. To develop the cooperative movement in their respective jurisdictions. e. To advise the appropriate authorities on all questions relating to cooperatives. f. To raise funds through membership fees, dues and contributions, donations, and subsidies from local and foreign sources whether private or government. g. To enter into joint ventures with national or international cooperatives of other countries in the manufacture and sale of products and/or services in the Philippines and abroad. 28. Which of the following statements is true if a cooperative complies with the provisions of Philippine Cooperative Code of 2008? a. Such cooperative shall be deemed a conspiracy or combination in restraint of trade. b. Such cooperative shall be implied an illegal monopoly. c. Such cooperative shall be considered an attempt to lessen competition or to fix price arbitrarily. d. None of the above. 29. The following are the qualifications of organizers or cooperators of a prospective cooperative, except a. They are 15 or more natural persons. b. They are all Filipino citizens. c. They are all actually residing or working in the intended area of operation. d. They have a common bond of interest. e. They must be incapacitated persons. 30. What is the number of cooperators or founders of a primary cooperative? a. 15 or more natural persons b. Not less than 5 but not more than 15 natural persons c. 5 but not more than 10 natural persons d. 10 or more natural persons 31. What is the maximum foreign investment or ownership in a cooperative? a. 100% b. 40% c. 30% d. 0% 32. It shall refer to a cooperative duly recognized by the Authority, formed and managed principally by minors and is affiliated with another registered cooperative which is called the guardian cooperative. a. Laboratory Cooperative b. Guardian Cooperative c. Student Cooperative d. Youth Cooperative 33. The following are the purposes of laboratory cooperative, except a. To serve as a training ground for its members to prepare them for membership in regular cooperatives b. To teach the value of thrift and saving mobilization among its members c. To instil cooperative values, principles, financial discipline and leadership skills among its members d. To promote and advance Filipino social and cultural values, ecological awareness and sustainable development. e. To accumulate or to raise fund for the setting of guardian cooperative 34. It shall refer to duly registered cooperative to which a laboratory cooperative is affiliated with. a. Laboratory Cooperative b. Guardian Cooperative c. Student Cooperative d. Youth Cooperative 35. The following are the qualifications of organizers or founders of a laboratory cooperative, except a. Fifteen (15) or more minors b. They are all Filipino citizens. c. They are actually residing in the community or enrolled in an educational institution within or near the area of operation of the Guardian Cooperative or out of school minor actually residing in the community. d. They are all gainfully employed. CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 4 of 20  36. What is the age of members of laboratory cooperative? a. At least 7 years old but below 18 years of age b. At least 12 years old but below 18 years of age c. At least 15 years old but below 18 years of age d. At least 10 years old but below 18 years of age 37. What is the minimum years of operation of a single-purpose cooperative in order to transform into a multi-purpose cooperative or in order for a single-purpose cooperative to create a subsidiary cooperative? a. At least one year of operations b. At least two years of operations c. At least three years of operations d. At least four years of operations 38. It refers to the document signed and acknowledged before a notary public by the organizers of a cooperative that will be filed to CDA in order for the prospective cooperative to be created. a. Articles of Co-Partnership b. Articles of Cooperation c. Articles of Incorporation d. Articles of Association 39. Each cooperative to be registered before CDA shall adopt by-laws not inconsistent with the provisions of Cooperative Code. When shall the cooperative by-laws be filed to the CDA? a. Within 30 days from the issuance of CDA of Certificate of Registration of the Cooperative b. Within 20 days from the issuance of CDA of Certificate of Registration of the Cooperative c. Within 10 days from the issuance of CDA of Certificate of Registration of the Cooperative d. At the same time the Articles of Cooperation is submitted to the CDA. 40. What is the minimum prescriptive period to lapse from the filing of application for registration as a new cooperative for the inaction of CDA to be considered an implied approval of the registration? a. At least 30 days b. At least 60 days c. At least 90 days d. At least 120 days 41. What is the minimum prescriptive period to lapse from the filing of application for amendment of articles of cooperation or by laws for the inaction of CDA to be considered an implied approval of the amendment? a. At least 30 days b. At least 60 days c. At least 90 days d. At least 120 days 42. When shall the amendments of Articles of Cooperation and By-Laws of the Cooperative take effect? a. Upon its approval by the CDA or b. Upon the lapse of 30 days from law f the date of filing amendment of articles or cooperation or by-laws if not acted upon by the CDA for a cause not attributable to the cooperative. c. Either A or B d. Neither A nor B 43. What is the minimum subscribed shares before a prospective cooperative be registered with CDA? a. At least 25% of authorized share capital b. At least 1/3 of authorized share capital c. At least ¾ of authorized share capital d. At least majority of authorized share capital 44. What is the minimum paid-up capital before a prospective cooperative be registered with CDA? a. At least 25% of the actual total subscription or P5,000, whichever is higher. b. At least 25% of the actual total subscription or P15,000, whichever is higher. c. At least 50% of the actual total subscription or P5,000, whichever is higher. d. At least 75% of the actual total subscription or P15,000, whichever is higher. 45. What is the voting requirement for registration or formation of an electric cooperative with Cooperative Development Authority? a. At least 20% of all members in good standing b. At least 25% of all members in good standing c. At least 5% of all members in good standing d. At least 10% of all members in good standing CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 5 of 20  46. When does a cooperative formed and organized under Cooperative Code acquire juridical personality? a. From the date of execution of Articles of Cooperation by the members. b. From the date of submission of Articles of Cooperation to CDA. c. From the date of issuance by CDA of Certificate of Registration under its official seal. d. From the date of meeting of minds among the members. 47. What is a conclusive evidence of juridical personality of a cooperative and its due registration with CDA unless it is proved that such registration has been cancelled? a. Articles of Cooperation signed by the members b. Cooperative By-laws signed by the members c. Certificate of Registration issued by CDA under its official seal d. Certificate of Registration issued by BIR under its official seal 48. What is the required vote for amendment of the provisions of Articles of Cooperation of a Cooperative? a. At least 2/3 of all members with voting rights b. At least 2/3 of all regular members and associate members c. At least majority of all members with voting rights d. At least ¾ of all members with voting rights 49. What is the required vote for amendment of the provisions of By-Laws of a Cooperative? a. At least 2/3 of all members with voting rights b. At least 2/3 of all regular members and associate members c. At least majority of all members with voting rights d. At least ¾ of all members with voting rights 50. What is the nature of liability of Cooperative duly registered under CDA? a. Absolute liability b. Unlimited liability c. Limited liability d. Supreme liability 51. What is the term of a cooperative? a. A cooperative shall exist for a term no exceeding 20 years from the date of registration unless sooner dissolve or unless said period is extended but the term is subject to unlimited renewals at a period not exceeding 20 years in any single instance provided that no extension can be made earlier than 2 years prior to the original or subsequent expiry date/dates unless there are justifiable reasons for an earlier extension as may be determined by CDA. b. A cooperative shall exist for a term not exceeding 30 years from the date of registration unless sooner dissolve or unless said period is extended but the term is subject to unlimited renewals at a period not exceeding 30 years in any single instance provided that no extension can be made earlier than 3 years prior to the original or subsequent expiry date/dates unless there are justifiable reasons for an earlier extension as may be determined by CDA. c. A cooperative shall exist for a term not exceeding 40 years from the date of registration unless sooner dissolve or unless said period is extended but the term is subject to unlimited renewals at a period not exceeding 40 years in any single instance provided that no extension can be made earlier than 4 years prior to the original or subsequent expiry date/dates unless there are justifiable reasons for an earlier extension as may be determined by CDA. d. A cooperative shall exist for a term not exceeding 50 years from the date of registration unless sooner dissolve or unless said period is extended but the term is subject to unlimited renewals at a period not exceeding 50 years in any single instance provided that no extension can be made earlier than 5 years prior to the original or subsequent expiry date/dates unless there are justifiable reasons for an earlier extension as may be determined by CDA. 52. He is a type of a cooperative member who has complied with all the membership requirements and entitled to all the rights and privileges of membership. Common shares shall only be issued to this type of member. Therefore, this type of member may invest in common shares and/or preferred shares. a. Regular member b. Common member c. Ordinary member d. Normal member CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 6 of 20  53. He is a type of a cooperative member who has no right to vote nor be voted upon and shall be entitled only to such rights and privileges as the bylaws may provide. This type of member can only invest in preferred share. a. Associate member b. Probationary member c. Preferred member d. Extraordinary member 54. What is the required vote for the termination of a membership in a cooperative for any of the valid causes enumerated by Cooperative Code? a. At least 2/3 of all the members of the cooperative with right to vote b. At least ¾ of all the members of the cooperative with right to vote c. At least ¾ of all the members of the board of directors of the cooperative d. At least majority of all the members of the board of directors of the cooperative 55. The following are the requirements before an associate member shall be considered a regular member, except a. He has met the minimum requirements of regular membership. b. He continues to patronize the cooperative for at least two years. c. He signifies his intention to remain a member. d. He has been elected a director of the cooperative. 56. What is the extent or nature of liability of a member of a cooperative for the latter’s debts to third persons? a. He is liable prorata and subsidiarily up to the extent of his separate assets. b. He is liable solidarily and subsidiaraly up to the extent of his separate assets. c. He is liable up to the extent of his contribution to the share capital of the cooperative. d. He is liable equally and subsidiarily up to the extent of his separate assets. 57. What is the minimum number of days of giving notice to the board of directors before a member may withdraw his membership from the cooperative for any valid reason? a. 60 days notice b. 30 days notice c. 90 days notice d. 120 days notice 58. What is the right of a withdrawing member of a cooperative? a. He shall be entitled to a refund of his share capital all other interests in the cooperative. b. He shall be entitled to a refund of his share capital only. c. He shall be entitled to a refund of the fair market value of his share capital. d. He shall not be entitled to any refund. 59. What is the capital structure of a cooperative before a refund be given to a withdrawing member? a. The value of the assets of the cooperative must be equal its liabilities before the refunding. b. The value of the assets of the cooperative must be equal or exceed its liabilities after the refunding. c. The value of the assets of the cooperative must be less than its liabilities before the refunding. d. The value of the assets of the cooperative must be less than its liabilities after the refunding. 60. Which of the following may be considered ground for termination of membership of a member in a primary cooperative? a. Death of a member b. Insanity of a member c. Either A or B d. Neither A nor B 61. Which of the following may be considered ground for termination of membership of a member in a secondary or tertiary cooperative? a. Insolvency of a cooperative member b. Dissolution of a cooperative member c. Either A or B d. Neither A nor B 62. What is the required vote for termination of membership of a member of a cooperative? a. At least majority vote of all members of board of directors b. At least majority vote of all members of board of directors and ratification by at least 2/3 of cooperative members with voting rights c. At least majority vote of all members of board of directors and ratification by at least 3/4 of cooperative members with voting rights d. At least ¾ vote of all cooperative members with voting rights CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 7 of 20  63. The following are grounds for termination of membership of a member in a cooperative, except a. When a member has not patronized any of the services of the cooperative for an unreasonable period of time as may be previously determined by the board of directors. b. When a member has continuously failed to comply with his obligations. c. When a member has acted in violation of the bylaws and the rules of the cooperative. d. For any act or omission injurious or prejudicial to the interest or the welfare of the cooperative. e. When a member of a cooperative engages in another employment or business. 64. It shall be the highest policy-making body of the cooperative and shall exercise such powers as are stated in the Cooperative Code, in the articles of cooperation and in the bylaws of the cooperative. a. General Assembly b. Board of Directors c. Board of Trustees d. Executive Committee 65. What is the composition of General Assembly of the cooperative? a. The general assembly shall be composed of such members who are entitled to vote under the articles of cooperation and bylaws of the cooperative. b. The general assembly shall be composed of regular members and associate members. c. The general assembly shall be composed of associate members. d. The general assembly shall be composed all members whether with voting rights or without voting rights. 66. The General Assembly may delegate some cooperative powers to the Board of Directors. However, the following are exclusive powers that cannot be delegated by General Assembly to the Board of Directors, except a. To determine and approve amendments to the articles of cooperation and bylaws. b. To elect or appoint the members of the board of directors, and to remove them for cause. c. To approve developmental plans of the cooperative. d. To determine the strategic planning, direction-setting and policy-formulation activities of the cooperatives. 67. What is the required vote for the valid delegation by the General Assembly of some of its delegable powers to a smaller body of the cooperative for purposes of prompt and intelligent decision-making? a. At least three-fourths (3/4) vote of all its members with voting rights, present and constituting a quorum. b. At least three-fourths (3/4) vote of all its members, present and constituting a quorum. c. At least three-fourths (2/3) vote of all its members with voting rights, present and constituting a quorum. d. At least three-fourths (2/3) vote of all its members, present and constituting a quorum. 68. How often shall the regular meeting by the general assembly of a cooperative be held? a. At least annually b. At least monthly c. At least quarterly d. At least weekly 69. In the absence of a date fixed in the cooperative by-laws, when shall the regular meeting by the general assembly of the cooperative be held? a. Any date within 90 days after the close of each fiscal year b. Any day of April c. April 15 d. Any day of December 70. What is the quorum in the meeting of the general assembly of an ordinary cooperative? a. At least majority of all the members entitled to vote b. At least 25% of all the members entitled to vote c. At least ¾ of all the members entitled to vote d. At least 5% of all the members entitled to vote 71. What is the quorum in the meeting of the general assembly of an electric cooperative? a. At least majority of all the members entitled to vote b. At least 25% of all the members entitled to vote c. At least ¾ of all the members entitled to vote d. At least 5% of all the members entitled to vote CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 8 of 20  72. As a general rule, what is the quorum in the regular or special meeting of general assembly of a cooperative bank? a. At least one half plus one of the number of voting shares of all the members in good standing b. At least 25% of all members entitled to vote c. At least 5% of all members entitled to vote d. At least 3/4 of all members with voting rights present and constituting a quorum 73. As an exception to general rule of quorum in a cooperative bank, what is the quorum in the meeting of general assembly of a cooperative bank for the amendment of its articles of cooperation or by-laws? a. At least one half plus one of the number of voting shares of all the members in good standing b. At least 25% of all members entitled to vote c. At least 5% of all members entitled to vote d. At least 3/4 of all members with voting rights present and constituting a quorum 74. What is the number of vote that a regular member of a primary cooperative has? a. Only one vote b. Based on the number of shares held c. Number of shares held multiplied by sits in Board of Directors d. None 75. What is the voting rights of the members of a cooperative bank? a. Each individual member shall have only one vote. b. The voting rights of the members shall be proportionate to the number of their paid-up shares. c. Each individual member shall have one (1) basic vote and as many incentive votes as provided for in the bylaws but not exceed five (5) votes. d. Each individual member shall have five (5) basic votes. 76. What is the number of vote that member cooperatives of a secondary or tertiary cooperative have? a. They shall have one (1) basic vote and as many incentive votes as provided for in the bylaws but not exceed five (5) votes. b. They shall have two (2) basic votes and as many incentive votes as provided for in the bylaws but not exceed ten (10) votes. c. They shall have three (3) basic votes and as many incentive votes as provided for in the bylaws but not exceed fifteen (15) votes. d. They shall have four (4) basic vote and as many incentive votes as provided for in the bylaws but not exceed twenty (20) votes. 77. It shall be the body in a cooperative responsible for the strategic planning, direction-setting and policy-formulation activities of the cooperatives. a. General Assembly b. Board of Directors c. Board of Trustees d. Executive Committee 78. What is the composition of board of directors of a cooperative? a. not less than (5) nor more than (15) members b. not less than (3) nor more than (12) members c. not less than (4) nor more than (10) members d. not less than (10) nor more than (25) members 79. What is the term of office of directors of a cooperative? a. One year b. Two years c. Three years d. Five years 80. What is the quorum necessary for validity of meeting of Board of Directors of ordinary cooperative? a. At least majority of the members of the Board unless the bylaws provide otherwise b. One-half plus one of all the members of the board of directors c. At least 3/4 of the members of the Board unless the bylaws provide otherwise d. At least 2/3 of the members of the Board unless the bylaws provide otherwise CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 9 of 20  81. What is the quorum necessary for validity of meeting of Board of Directors of cooperative bank? a. At least majority of the members of the Board unless the bylaws provide otherwise b. One-half plus one of all the members of the board of directors c. At least 3/4 of the members of the Board unless the bylaws provide otherwise d. At least 2/3 of the members of the Board unless the bylaws provide otherwise 82. The members of the board of directors of a cooperative shall not hold any other position directly involved in the day to day operation and management of the cooperative. Which of the following positions in a cooperative may be held concurrently of a director of a cooperative? a. Chairman or Vice-chairman of the Board of Directors of the Cooperative b. President of the Cooperative c. Secretary of the Cooperative d. Treasurer of the Cooperative 83. What reason of vacancy in the Board of Directors of a cooperative will disqualify the remaining directors despite constituting quorum to fill-up the vacancy, thus, requiring the general assembly to fill-up such vacancy? a. Expiration of term of a director b. Death of a director c. Disqualification of a director d. Resignation or abandonment of office by a director 84. There are ten sits in the Board of Directors of a particular cooperative. Three sits are vacant due to death, resignation and disqualification of a director. How may the three vacancies be filled-up? a. By the vote of at least a majority of the remaining directors, if still constituting a quorum b. By the general assembly in a regular or special meeting called for the purpose c. Either A or B d. Neither A nor B 85. There are nine sits in the Board of Directors of a particular cooperative. Five sits are vacant due to death, resignation, abandonment, disqualification or removal of a director. How shall the five vacancies be filled-up? a. By the vote of at least a majority of the remaining directors even not constituting quorum b. By the general assembly in a regular or special meeting called for the purpose c. Either A or B d. Neither A nor B 86. There are five sits in the Board of Directors of a particular cooperative. One sit is vacant due to expiration of term of such director. How shall the vacancy be filled-up? a. By the vote of at least a majority of the remaining directors, if still constituting a quorum b. By the general assembly in a regular or special meeting called for the purpose c. Either A or B d. Neither A nor B 87. How may an executive committee in a cooperative be created? a. By provision in the by-laws b. By mere resolution of board of directors despite no authorization in the by-laws c. Either A or B d. Neither A nor B 88. How may the powers of the executive committee in a cooperative be delegated to it? a. By provision in the by-laws b. By a majority vote of all the members of the board of directors c. Either A or B d. Neither A nor B 89. As a general rule, the directors, officers and committee members are not personally liable for the liabilities of the cooperative. The following are the exceptional cases wherein directors, officers and committee members shall be liable jointly and severally for all damages or profits resulting therefrom to the cooperative, members, and other persons, except a. They willfully and knowingly vote for or assent to patently unlawful acts. b. They are guilty of gross negligence or bad faith in directing the affairs of the cooperative. c. They acquire any personal or pecuniary interest in conflict with their duty as such directors, officers or committee members. d. They exercise business judgment bona fide to operate the cooperative. CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 10 of 20  90. In the absence of provision in the by-laws fixing their compensation, to what extent of benefits are directors of a cooperative entitled to? a. Reasonable per diems b. Compensation c. Salary d. Employee benefits 91. What is the required vote in order for directors of a cooperative to be exceptionally entitled to compensation other than reasonable per diems? a. At least majority vote of the members with voting rights b. At least 2/3 vote of the members with voting rights c. At least 3/4 vote of the members with voting rights d. Unanimous vote of the members with voting rights 92. In case there is a provision in the by-laws fixing compensation of directors, to what extent of benefits are directors of a cooperative entitled to during the first year of existence of any cooperative? a. Reasonable per diems b. Compensation c. Both A and B d. Neither A nor B 93. In case there is a provision in the by-laws fixing compensation of directors, to what extent of benefits are directors of a cooperative entitled in the current year when the cooperative reported net loss in the preceding year or when the cooperative reported a dividend rate less than the official inflation rate for the same year? a. Reasonable per diems b. Compensation c. Both A and B d. Neither A nor B 94. When are the directors of a cooperative not entitled to any reasonable per diems and compensation? a. When the cooperative reported net loss in the preceding year b. When the cooperative reported a dividend rate less than the official inflation rate for the same year c. Either A or B d. Neither A nor B 95. How shall the compensation of officers of cooperatives as well as members of the committees be fixed? a. It may be fixed in the bylaws. b. It must be fixed by at least majority vote of the members with voting rights. c. It must be fixed by at least majority vote of the members of board of directors. d. It must be provided in the articles of cooperation. 96. How shall the compensation of other employees of cooperatives be fixed? a. It may be fixed in the bylaws. b. It must be fixed by at least majority vote of the members with voting rights. c. It must be fixed by at least majority vote of the members with and without voting rights. d. It may be fixed by at least majority vote of the members of board of directors present in a meeting with quorum. 97. How often shall the regular meeting of the board of directors of a primary cooperative be held? a. At least monthly b. At least weekly c. At least annually d. At least quarterly 98. The following are considered valid grounds for removal of an officer of a cooperative, except a. Mere loss of confidence b. Loss of confidence in the honesty and integrity as evidenced by acts or omissions c. Such officer has a relative within third civil degree of consanguinity or affinity who is also an officer of the same cooperative. d. Such officer has conflict of interest with employing cooperative. e. Such officer is engaged in a business similar to that of his employing cooperative. CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 11 of 20  99. As a general rule, what is the status of contract entered into by the cooperative with one or more of its directors, officers or committee members also known as contract with self-dealing directors or officers? a. Voidable on the part of the cooperative b. Unenforceable c. Void d. Rescissible 100. What is the required vote for ratification of voidable contract entered by a cooperative with a self-dealing director? a. At least 2/3 of members with voting rights, present and constituting a quorum b. At least 3/4 of members with voting rights, present and constituting a quorum c. At least majority of members with voting rights, present and constituting a quorum d. At least 25% of members with voting rights, present and constituting a quorum 101. The cooperative has 15 sits in the board of directors. A contract with a self-dealing director will be the subject matter of the meeting of the board of directors. In which of the following scenarios will the contract with such self- dealing directors be considered perfectly valid even without ratification by members? Present directors including self-dealing director Approving present directors including self-dealing director a. 9 directors 5 directors b. 8 directors 6 directors c. 11 directors 6 directors d. 9 directors 6 directors 102. What is the liability or obligation of a director of a cooperative who by virtue of his office, acquires for himself an opportunity which should belong to the cooperative? a. He shall be liable but only up to the extent of his capital contribution. b. He shall be liable but only up to the extent of his compensation and reasonable per diems. c. He shall be liable for damages and must account for double the profits that otherwise would have accrued to the cooperative by refunding the same. d. He shall be liable for damages and must account for the profits that otherwise would have accrued to the cooperative by refunding the same. 103. What is the required vote for ratification of acquisition made by a director of a cooperative who by virtue of his office, acquires for himself an opportunity which should belong to the cooperative? a. At least 2/3 of members with voting rights, present and constituting a quorum b. At least 3/4 of members with voting rights, present and constituting a quorum c. At least majority of members with voting rights, present and constituting a quorum d. At least 25% of members with voting rights, present and constituting a quorum 104. What is the liability of a director or officer, or an associate of a director or officer, who, for his benefit or advantage or that of an associate, makes use of confidential information that, if generally known, might reasonably be expected to adversely affect the operation and viability of the cooperative? a. Such director or officer shall be liable to compensate the cooperative for the direct losses suffered by the cooperative as a result of the illegal use of information. b. Such director or officer shall be accountable to the cooperative for any direct benefit or advantage received or yet to be received by him or his associate, as a result of the transaction. c. Both A and B. d. Neither A nor B. 105. What is the required vote for removal of an officer or a director of a cooperative? a. At least 2/3 of members with voting rights, present and constituting a quorum b. At least 3/4 of members with voting rights, present and constituting a quorum c. At least majority of members with voting rights, present and constituting a quorum d. At least 25% of members with voting rights, present and constituting a quorum 106. Which of the following are disqualified to be an appointed officer of a cooperative? a. Two (2) or more persons with relationships up to the third civil degree of consanguinity or affinity b. Any person engaged in a business similar to that of the cooperative nor who in any other manner has interests in conflict with the cooperative c. Either A or B d. Neither A nor B 107. Up to what civil degree of consanguinity or affinity shall two or more persons be disqualified from being appointed officers of a cooperative? a. Up to third civil degree of consanguinity or affinity b. Up to second civil degree of consanguinity or affinity c. Up to first civil degree of consanguinity or affinity d. Up to fourth civil degree of consanguinity or affinity CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 12 of 20  108. What type of cooperative is absolutely exempted from all taxes and fees imposed by national internal revenue taxes and other tax laws even without qualification? a. Duly registered cooperative with CDA that does not transact business with non-members or the general public. b. Duly registered cooperative with CDA that transacts business with members, non-members and the general public. c. Duly registered cooperative with CDA with accumulated reserves and undivided net savings of not more than P10,000,000. d. Duly registered cooperative with CDA with accumulated reserves and undivided net savings of more than P10,000,000. 109. In what type of transaction will a cooperative transacting with both members and non-members be absolutely exempted from national tax and local even without qualification? a. Transaction of cooperative with the general public. b. Transaction of cooperative with non-members. c. Transaction of cooperative with their members. d. All of the above. 110. What type of cooperative dealing with nonmembers shall enjoy the tax exemption from all national, city, provincial, municipal or barangay taxes of whatever name and nature and customs duties, advance sales or compensating taxes on their importation of machineries, equipment and spare parts used by them and which are not available locally a certified by the department of trade and industry? a. Duly registered cooperative with CDA with accumulated reserves and undivided net savings of not more than P10,000,000. b. Duly registered cooperative with CDA with accumulated reserves and undivided net savings of not more than P20,000,000. c. Duly registered cooperative with CDA with accumulated reserves and undivided net savings of not more than P30,000,000. d. Duly registered cooperative with CDA with accumulated reserves and undivided net savings of more than P40,000,000. 111. The following are the types of taxes or custom duties will a cooperative dealing with nonmembers with accumulated reserves and undivided net savings of not more than P10,000,000 be exempted, except a. All national taxes b. All provincial, city, municipal and barangay taxes c. Customs duties, advance sales or compensating taxes on their importation of machineries, equipment and spare parts used by them and which are not available locally a certified by the department of trade and industry d. All customs duties and tariffs 112. In which type of taxes will a cooperative dealing with nonmembers with accumulated reserves and undivided net savings of more than P10,000,000 be exempted? a. Income tax b. Value added tax c. Local tax and national tax on transaction with banks and insurance companies d. All other tax unless otherwise exempted by Cooperative Code 113. The following statements concerning other privileges given by Cooperative Code to cooperatives duly registered with CDA are correct, except a. In areas where there are no available notaries public, the judge, exercising his ex officio capacity as notary public, shall render service, free of charge, to any person or group of persons requiring the administration of oath or the acknowledgment of articles of cooperation and instruments of loan from cooperatives not exceeding Five Hundred Thousand Pesos (P500,000.000. b. Any register of deeds shall accept for registration, free of charge, any instrument relative to a loan made under this Code which does not exceed Two Hundred Fifty Thousand Pesos (P250,000.00) or the deeds of title of any property acquired by the cooperative or any paper or document drawn in connection with any action brought by the cooperative or with any court judgment rendered in its favor or any instrument relative to a bond of any accountable officer of a cooperative for the faithful performance of his duties and obligations. c. Cooperatives shall be exempt from the payment of all court and sheriff’s fees payable to the Philippine Government for and in connection with all actions brought under Cooperative Code, or where such actions is brought by the CDA before the court, to enforce the payment of obligations contracted in favor of the cooperative d. All cooperatives shall be exempt from putting up a bond for bringing an appeal against the decision of an inferior court or for seeking to set aside any third party claim: Provided, That a certification of the CDA showing that the net assets of the cooperative are in excess of the amount of the bond required by the court in similar cases shall be accepted by the court as a sufficient bond. e. Any security issued by cooperatives shall be exempted from the provisions of the Securities Regulation Code even those securities which are considered to be speculative. CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 13 of 20  114. If the dissolution of a cooperative does not prejudice the rights of any creditor having a claim against it, what is the proper procedure for voluntary dissolution of a cooperative? a. By submitting a resolution duly adopted by Board of Directors and members to CDA. b. By filing a petition for dissolution with CDA. c. By filing a petition for dissolution with RTC. d. By filing a petition for dissolution with SEC. 115. If the dissolution of a cooperative prejudices or affects the rights of any creditor having a claim against it, what is the proper procedure for voluntary dissolution of a cooperative? a. By submitting a resolution duly adopted by Board of Directors and members to CDA. b. By filing a petition for dissolution with CDA. c. By filing a petition for dissolution with RTC. d. By filing a petition for dissolution with SEC. 116. What is the required vote for the voluntary dissolution of a cooperative? a. By at least majority vote of the board of directors and by a resolution duly adopted by the affirmative vote of at least 2/3 of all members with voting rights, present and constituting a quorum b. By at least majority vote of the board of directors and by a resolution duly adopted by the affirmative vote of at least 3/4 of all members with voting rights, present and constituting a quorum c. By at least majority vote of the board of directors and by a resolution duly adopted by the affirmative vote of at least majority of all members with voting rights, present and constituting a quorum d. By at least majority vote of the board of directors and by a resolution duly adopted by the affirmative vote of at least 25% of all members with voting rights, present and constituting a quorum 117. The following are valid grounds for involuntary dissolution of a cooperative by order of a competent court after due hearing, except a. Violation of any law or rules and regulations b. Violation of the cooperative's by laws c. Insolvency of the cooperative d. Incurring net loss in the cooperative's operation 118. The following are valid grounds for suspension or revocation, after due notice and hearing, of certificate of registration of a cooperative by Cooperative Development Authority (CDA), except a. The cooperative has obtained its certificate of registration by fraud. b. The cooperative is existing for an illegal purpose. c. The cooperative willfully violated any of the provisions of Cooperative Code or its by laws despite notice given by CDA. d. The cooperative willfully failed to operate on a cooperative basis. e. The cooperative failed to meet the required number of members in the cooperative. f. The cooperative created a subsidiary cooperative after two years of operation. 119. What are the modes of dissolution of a cooperative? a. By the expiration of its charter or certificate of registration for failure to renew its term on the deadline provided by law. b. By termination of its existence through voluntary dissolution. c. By termination of its existence through an appropriate judicial proceeding also known as involuntary dissolution. d. Any of the above. 120. After the dissolution of a cooperative through any of the modes provided by Cooperative Code, what is the maximum period provided by Cooperative Code for the liquidation of the dissolved cooperative? a. For three years from the time it is dissolved. b. For two years from the time it is dissolved. c. For one year from the time it is dissolved. d. For four years from the time it is dissolved. 121. The following transactions may be done by a dissolved cooperative during the three-year liquidation period, except a. Prosecuting and defending suits by or against it. b. Continuing business for which it was established. c. Settling and closing its affairs. d. Disposing, conveying and distributing of its properties and assets to creditors and members. CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 14 of 20  122. In the winding up or liquidation of a cooperative, to whom shall any cooperative's asset distributable to any creditor, shareholder or member who is unknown or cannot be found be given? a. To the city or municipality where the asset is located b. To the federation or union to which the cooperative is affiliated with c. It will be escheated in favor of the Republic of the Philippines. d. To the members of the cooperative 123. In the winding up or liquidation of a cooperative, what will happen to the subsidies, donations, legacies, grants, aids and such other assistance from any local or foreign institution whether public or private given to such dissolved cooperative? a. It will be given to city or municipality where the asset is located. b. It will be given to federation or union to which the cooperative is affiliated with. c. It will be escheated in favor of the Republic of the Philippines. d. It will be given to the members of the cooperative. 124. It refers to a union of two or more existing cooperatives belonging to the same category whereby the surviving cooperative, retaining its identity, absorbs one or more constituent cooperatives. a. Consolidation b. Business combination c. Merger d. Quasi-reorganization 125. What is the required vote for the validity of merger of two or more cooperatives? a. At least 2/3 of members with voting rights, present and constituting a quorum b. At least 3/4 of members with voting rights, present and constituting a quorum c. At least majority of members with voting rights, present and constituting a quorum d. At least 25% of members with voting rights, present and constituting a quorum 126. What is the required vote for division of cooperative to two or more cooperatives? a. At least 3/4 of all the members with voting rights, present and constituting a quorum b. At least 1/3 of all the members with voting rights, present and constituting a quorum c. At least 2/3 of all the members with voting rights, present and constituting a quorum d. At least majority of all the members with voting rights, present and constituting a quorum 127. The following are the sources of capital, property and funds of a cooperative, except a. Member's share capital consisting of common shares and/or preferred shares b. Loans and borrowings including deposits c. Revolving capital which consists of the deferred payment of patronage refunds, or interest on share capital d. Subsidies, donations, legacies, grants, aids and such other assistance from any local or foreign institution whether public or private e. Investment or capital contribution by stockholder 128. What are the types of share capital in a cooperative? a. Common shares b. Preferred shares c. Both a and b d. Neither a nor b 129. To what type of members of cooperative may common shares be issued? a. Regular members b. Associate members c. Either a or b d. Neither a nor b 130. Which of the following statements about common shares in a cooperative is correct? a. Its holders shall be entitled to vote and be voted under the principle of one-man, one vote principle. b. Its holders shall receive interest, the rate which should not exceeded the normal rate on investment. c. Either a or b d. Neither a nor b 131. To what type of members of cooperative may preferred shares be issued? a. Regular members b. Associate members c. Either a or b d. Neither a nor b CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 15 of 20  132. Which of the following statements about preference share holders (associate members) in a cooperative is correct? a. Issuance and limitation on Preferred Share Capital shall be prescribed in the By-laws of the cooperative b. Associate Members shall not be eligible to vote nor be voted on account of such shareholdings but shall be entitled to. c. Holders of preference shares be entitled to, among others the following: (1) Preference in the payment of interest as provided for in the Bylaws of the cooperative; and (2) In case of liquidation, priority in the distribution on Preferred Share Capital shall be prescribed in the By-laws of the cooperative d. All of the above. 133. What is the maximum limitation on share capital holdings of a member of a cooperative? a. No more than 10% of the share capital of the cooperative b. No more than 5% of the share capital of the cooperative c. No more than 20% of the share capital of the cooperative d. No more than 15% of the share capital of the cooperative 134. What is the maximum par value of a share of a cooperative? a. No more than P5 b. No more than P1,000 c. No more than P10 d. No more than P1 135. To what types of annual audit shall a cooperative registered under CDA be subjected to? a. Financial statements audit b. Social audit c. Performance audit d. All of the above 136. Who shall perform the annual financial statements audit of a cooperative registered under CDA? a. Independent CPA in good standing with PICPA and accredited by PRC-BoA and CDA. b. Independent social auditor accredited by CDA. c. Internal auditor of the Cooperative. d. Any of the above. 137. The following are the qualifications of financial statement auditor of cooperative, except a. He must be a member in good standing of PICPA. b. He must be accredited by PRC-BoA as CPA practitioner. c. He must be accredited by CDA. d. He must be accredited by SEC. 138. Who shall perform the annual social audit of a cooperative registered under CDA? a. Independent CPA in good standing with PICPA and accredited by PRC-BoA. b. Independent social auditor accredited by CDA. c. Internal auditor of the Cooperative. d. Any of the above. 139. A member shall have the right to examine the records required to be kept by the cooperative under Article 52 of the Cooperative Code during reasonable hours on business days and he may demand, in writing, for a copy of excerpts from said records without charge except the cost of production. What are the legal implications of refusal by the officer to allow a member to exercise this right? a. Such officer shall be liable to such member for civil damages. b. Such officer shall be guilty of offense or crime punishable by Cooperative Code. c. Both A and B. d. Neither A nor B. 140. Which of the following is a valid ground for refusing to furnish the requested records by a member? a. The member has improperly used any information secured through any prior examination of the records of such cooperative. b. The member is not acting in good faith in making his demand. c. The member will not be using the records for legitimate purpose. d. Any of the above CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 16 of 20  141. It shall not be construed as profit but as an excess of payments made by the members for the loans borrowed, or the goods and services availed by them from the cooperative or the difference of the rightful amount due to the members for their products sold or services rendered to the cooperative including other inflows of assets resulting from its other operating activities and which shall be deemed to have been returned to them if the same is distributed as prescribed in Cooperative Code. a. Retained earnings b. Accumulated profits c. Net surplus d. Contributed capital 142. How shall the net surplus of a cooperative be determined or computed? a. By the existing provisions of Corporation Code. b. By the provisions of the by-laws of the Cooperative. c. By the provisions of full PAS/PFRS. d. By the provisions of PFRS for SMES. 143. What is the first priority in the distribution of the net surplus of a cooperative? a. Reserve fund b. Education and training fund c. Community development fund d. Optional fund e. Interest on share capital of members and patronage refunds 144. This fund shall be used for the stability of the cooperative and to meet net losses in its operations but shall not be utilized for investment, other than those allowed in the Cooperative Code. a. Reserve fund b. Education and training fund c. Community development fund d. Optional fund 145. What is the minimum amount of reserve fund in the first five years of operation of a cooperative? a. At least 50% of net surplus b. At least 10% of net surplus c. At least 3% of net surplus d. At least 7% of net surplus 146. After the first five years of operation of a cooperative, what is the minimum amount of reserve fund of a cooperative? a. At least 50% of net surplus b. At least 10% of net surplus c. At least 3% of net surplus d. At least 7% of net surplus 147. This fund shall provide for the training, development and similar other cooperative activities geared towards the growth of the cooperative movement. a. Reserve fund b. Education and training fund c. Community development fund d. Optional fund 148. What is the maximum amount of education and training fund of a cooperative? a. Not more than 50% of net surplus b. Not more than 10% of net surplus c. Not more than 3% of net surplus d. Not more than 7% of net surplus 149. This fund shall be used for projects or activities that will benefit the community where the cooperative operates. a. Reserve fund b. Education and training fund c. Community development fund d. Optional fund CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 17 of 20  150. What is the minimum amount of community development fund of a cooperative? a. At least 50% of net surplus b. At least 10% of net surplus c. At least 3% of net surplus d. At least 7% of net surplus 151. What is the maximum amount of optional fund of a cooperative? a. Not more than 50% of net surplus b. Not more than 10% of net surplus c. Not more than 3% of net surplus d. Not more than 7% of net surplus 152. What is the maximum interest on share capital that may be distributed by a cooperative? a. Not more than 5% of net surplus b. Not more than 10% of net surplus c. Not more than 3% of net surplus d. Not more than the normal rate of return of investments 153. What is the required vote for allocation of interest on share capital? a. Majority of all members of the board of directors present and constituting a quorum b. Majority of all members of general assembly present and constituting a quorum c. 3/4 of all members of general assembly present and constituting a quorum d. Majority of all members of the board of directors present and constituting a quorum and 3/4 of all members of general assembly present and constituting a quorum 154. What is the required vote for recommendation for the deferment of distribution or payment of interest on share capital to cooperative members? a. Majority of all members of the board of directors present and constituting a quorum b. Majority of all members of general assembly present and constituting a quorum c. 3/4 of all members of general assembly present and constituting a quorum d. Majority of all members of the board of directors present and constituting a quorum and 3/4 of all members of general assembly present and constituting a quorum 155. What is the required vote for approval of the deferment of distribution or payment of interest on share capital to cooperative members? a. Majority of all members of the board of directors present and constituting a quorum b. Majority of all members of cooperatives with voting rights present and constituting a quorum c. 3/4 of all members of general assembly present and constituting a quorum d. 2/3 of all members of general assembly present and constituting a quorum 156. It refers to the portion of net surplus allocated to the amount returned to individual members who patronize the goods and services of the cooperative in proportion to their individual patronage. a. Patronage refund b. Interest on share capital c. Dividend d. Return of investment 157. What is the minimum amount of net surplus allocated as patronage refund? a. At least 30% of the net surplus after deducting the statutory reserves based on the principle of equity. b. At least 20% of the net surplus after deducting the statutory reserves based on the principle of equity. c. At least 10% of the net surplus after deducting the statutory reserves based on the principle of equity. d. At least 5% of the net surplus after deducting the statutory reserves based on the principle of equity. 158. What is the maximum amount of net surplus allocated as patronage refund? a. No more than twice the rate of interest on share capital. b. No more than the rate of interest on share capital. c. No more than thrice the rate of interest on share capital. d. No more than half the rate of interest on share capital. 159. It is a principle of equity wherein an equal right of members to participate in the organization and to equitably share in the benefits accruing is established. a. Principle of Patronage Refund b. Principle of Preference Shares c. Principle of Cooperation d. Principle of Control CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 18 of 20  160. In what fund shall the remaining net surplus be credited after the allowable interest and the patronage refund have been deducted? a. Reserve fund b. Education and training fund c. Community development fund d. Optional fund 161. It refers to shall refer to the amount available out of the deferred payment of the patronage refund and interest on share capital of the members or by authorized deduction of a percentage from the product sold or per unit of product handled by the cooperative. a. Revolving capital b. Escrow capital c. Deferred capital d. Contributed capital 162. Which of the following is a fund in a cooperative? a. Revolving fund b. Deferred fund c. Escrow fund d. Endowment fund 163. What is the right available to a member of a cooperative who dissents to a cooperative acts provided by Cooperative Code? a. Preemptive right b. Right of first refusal c. Right to withdraw membership d. Right to dissolve the cooperative 164. The following are the cooperative acts when a dissenting member of a cooperative exercise his right to withdraw his membership and demand the refund of his share capital and interest a.k.a. appraisal right, except a. Amendment of Articles of Cooperation or By-laws b. Amendment of By-Laws c. Merger or Consolidations of two or more cooperatives d. Granting compensation to directors 165. The following are cooperative acts that require ¾ vote of members with voting rights for validity, except a. Amendment of articles of cooperation or amendment of corporate by-laws b. Merger or consolidation of cooperatives c. Dissolution of a cooperative d. Removal of director of a cooperative 166. Which of the following statements is false about the privileges of a cooperative? a. Cooperatives engaged in credit services and/or federations shall be entitled to loans credit lines, rediscounting of their loan notes, and other eligible papers with the Bangko Sentral ng Pilipinas (BSP) b. A public transport service cooperative may be entitled to financing support for the acquisition and/or maintenance of land and sea transport equipment, facilities and parts through the program of the government financial institutions. It shall have the preferential right to the management and operation of public terminals and ports whether land or sea transport where the cooperative operates and on securing a franchise for active or potential routes for the public transport. c. Cooperatives organized by faculty members and employees of educational institutions shall have the preferential right in the management of the canteen and other services related to the operation of the educational institution where they are employed: Provided, That such services are operated within the premises of the said educational institution d. The appropriate housing agencies and government financial institutions shall create a special window for financing housing projects undertaken by cooperatives, with interest rates and terms equal to, or better than those given for socialized housing projects. This financing shall be in the form of blanket loans or long-term wholesale loans to qualified cooperatives, without need for individual processing. 167. Which of the following statements is true? a. Cooperative’s financial statements have to be in accordance with Philippine Financial Reporting Standards. b. Auditors of cooperative shall comply in accordance with Philippine Standards on Auditing. c. Auditors of cooperative have to be in good standing and have to be registered only with the Cooperative Development Authority but not with PRC-Board of Accountancy. d. None of the above. CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 19 of 20  168. The following are the incentives of electric cooperative registered before Cooperative Development Authority, except a. The electric cooperatives registered with the Authority with existing loans obtained from NEA after June 26, 2001 shall continue to observe the terms of such loans until full payment or settlement thereof b. Except as provided in letter A, the NEA shall no longer exercise regulatory or supervisory powers on electric cooperatives duly registered with the CDA c. Electric cooperatives registered with the CDA are entitled to congressional allocations, grants, subsidiaries and other financial assistance for rural electrification which can be coursed through the Department of Energy, the CDA and/or local government units. The electric cooperatives registered under Cooperative Code can avail of the financial services and technical assistance provided by the government financial institutions and technical development agencies on terms respecting their independence as autonomous cooperatives d. All condoned loans, subsidies, grants and other assistance shall form part of the donated capital and funds of the electric cooperatives and as such, it shall not be sold, traded nor be divided into shareholdings at any time; these donated capital/fund shall be valuated for the sole purpose of determining the equity participation of the members: Provided, That in the case of dissolution of the cooperative, said donated capital shall be subject to escheat. e. Electric cooperatives are not required to submit audited financial statements to CDA. 169. This cooperative principle means that cooperatives are democratic organizations that are controlled by their members who actively participate in setting their policies and making decisions. Men and women serving as elected representatives, directors or officers are accountable to the membership. In primary cooperatives, members have equal voting rights of one-member, one-vote. Cooperatives at other levels are organized in the same democratic manner. a. Democratic member control b. Member economic participation c. Autonomy and independence d. Concern for community 170. This cooperative principle means that members contribute equitably to, and democratically control, the capital of their cooperatives. At least part of that capital is the common property of the cooperative. They shall receive limited compensation or limited interest, if any, on capital subscribed and paid as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative by setting up reserves, part of which should at least be indivisible; benefitting members in proportion to their patronage of the cooperative's business; and, supporting other activities approved by the membership. a. Democratic member control b. Member economic participation c. Autonomy and independence d. Concern for community 171. This cooperative principle means that cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including government, or raise capital from external sources, they shall do so on terms that ensure democratic control of their members and maintain their cooperative autonomy. a. Democratic member control b. Member economic participation c. Autonomy and independence d. Concern for community 172. This cooperative principle means that cooperatives work for the sustainable development of their communities through policies approved by their members a. Democratic member control b. Member economic participation c. Autonomy and independence d. Concern for community -End- CPAR – Regulatory Framework for Business Transactions (RFBT 9208) Page 20 of 20