RFBT Final Pre-Board Exam PDF, April 26, 2021

Manila * Cavite * Laguna * Cebu * Cagayan De Oro * Davao Since 1977 RFBT CAPUNO/VILLEGAS/AGUILAR FINAL PRE-BOARD EXAMINATION...

Manila * Cavite * Laguna * Cebu * Cagayan De Oro * Davao Since 1977 RFBT CAPUNO/VILLEGAS/AGUILAR FINAL PRE-BOARD EXAMINATION APRIL 26, 2021 Multiple Choice. Select the letter that corresponds to the best answer. This examination consists of 100 items and the exam is good for three (3) hours. Good luck! 1. These corporation are prohibited from issuing no par shares, except: a. Banks b. Trust corporations c. Stock exchanges d. Insurance companies 2. The boards of Directors are allowed to fill up the following vacancies I. The vacancy in the board was the result of the removal by stockholders or members II. The vacancy in the board was due to expiration of term III. The vacancy in the board was due to an increase in the number of directors IV. Vacancy of corporate secretary a. I and II b. II and III c. III and IV d. IV only 3. This corporation has for its basic purpose charity or charitable works. a. Religious or ecclesiastical corporations b. Eleemosynary corporation c. Public corporations d. Close corporation 4. When valid grounds exists, such as when a corporation is established to commit fraud, justify a wrong, defend a crime or defeat public convenience, the separate juridical personality of a corporation shall be considered as the same. This is known as: a. Trust Fund Doctrine b. Doctrine of separate juridical personality c. Piercing the veil of corporate entity d. Corporate opportunity theory 5. Which of these is not an essential element of a de facto corporation? a. That these must be a law under which corporations may incorporate. b. That there must be strict or substantial compliance with this law. c. That there must belief in good faith that it is a corporation. d. That there must be exercise of corporate powers. 6. Under the Revised Corporation Code, if the corporation opted for fixed term, then the period of extension is: a. 2 years b. 3 years c. 4 years d. 5 years e. perpetual Page 1 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. 7. The requirement for independent directors corporations vested with public interest constituting at ____ of such board – a. 10% b. 15% c. 20% d. 25% 8. The non-holding of elections under the Revised corporation Code and the reasons therefor shall be reported to the Commission ______ from the date of the scheduled election. a. 10 days b. 15 days c. 20 days d. 25 days e. 30 days 9. Based on the previous question, the report shall specify a new date for the election, which shall not be later than ____ days from the scheduled date a. 20 days b. 30 days c. 45 days d. 60 days 10. The period to question the decision of the third person in Partnership when its decision is manifest inequitable as to the sharing of profits and losses. a. 1 month b. 2 months c. 3 months d. 6 months 11. Corporation governed by special laws, aside from the requirements specified under the corporation laws. In order that their Articles of Incorporation may be approved or accepted, they must present before the Securities and Exchange Commission: a. A favorable recommendation from the Department of Finance. b. A copy of previous income tax return and a statement of assets, liabilities and net worth. c. A favorable recommendation of the appropriate government agency to the effect that such article or amendment is in according with law. d. An undertaking to change the name of the corporation if there is already registered with the SEC a name or a name similar to the name of this corporation. 12. In the matter of management of the business affairs of the corporation his is supreme: a. Majority of the stockholders b. 2/3 of the stockholders c. Board of Directors d. President of the Corporation 13. A gratuitous issue of Treasury shares will result in: a. Capital surplus b. Watered stock c. Additional profit d. Stock dividend e. Answer not given Page 2 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. 14. A & B are partners in a real estate business. A & B were approached by X who offered to buy a parcel of land owned by the partnership. Thereafter, B sold to A, B’s share in the partnership. Then A sold the land to X at a big profit. a. A is liable to B for B’s share in the profits b. The partnership is dissolved when A because the sole owner c. A is not liable to B for the latter’s share in the profits d. The sale of the land to X is valid 15. A is the capitalist partner and B is the industrial partner. A engaged personally in the same kind of business the partnership is engaged in. a. If there are losses, the partnership will bear the losses b. If there are profits, the profits will be shared by A and the partnership c. If there are profits, A will give the profits to the partnership d. A will be excluded from the partnership and pay damages e. Answer not given 16. A is the managing partner of ABC and Company. X owes A personally and ABC and Company P20, 000 each. A collected and received form X P10, 000 and he issued a receipt wherein it is stated that the amount is applied against his personal credit. a. The amount received will be applied in favor of the partnership credit b. The amount received will be applied in proportion to both credits c. The amount received will apply in the credit of A. d. All the partners will decide as to whose favor it will apply e. Answer not given 17. When cash or property worth P3,000 or more is contributed as capital, the Articles of Co-Partnership shall be in a public instrument and registered with the Securities and Exchange Commission. If the said requirements are not complied with: a. It will render the partnership void b. It will not affect the liability of the partnership and the partners thereof to third parties c. It will not give a legal personality to the partnership d. It will give the partnership a de facto existence 18. Corporations organized by private persons performing public function and for profit to private person are: a. Public Corporations b. Government Controlled Corporations c. Quasi-Public Corporations d. Private Corporation 19. Issued to those who in some way worked for incorporating the company or for services rendered in launching the welfare of the corporation is called: a. Common stock b. Promotion stock c. Founder stock d. Shares in escrow 20. Statement 1: De jure corporation are not subject to attack, not even by the government. Statement 2: De facto corporations are subject to direct attack by the government, although not subject to collateral attack by private individuals. a. Both statements are true b. Both statements are false Page 3 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. c. Statement 1 is true, but statement 2 is false d. Statement 1 is false, but statement 2 is true 21. One of the characteristics of treasury shares is that: a. they have the status of outstanding shares. b. they may not be reissued or sold again. c. they participate neither in dividends nor in the meetings of the corporation as voting stocks. d. answer not given 22. The following are advantages of par value shares of stock, except one: a. Greater protection to creditors b. Liability of subscribers for unpaid subscription c. Unlikelihood of distribution of dividends that are ostensible profits d. Ease of sale 23. In order to commit causal fraud: a. It must be serious and unilateral b. Serious and bilateral c. Committed by both parties d. Committed after the creation of the contract 24. A contract which is onerous in nature is interpreted: a. Against both parties b. Against the party who made it onerous c. With the least transmission of rights d. In favor of greatest reciprocity of interest 25. A contract must bind both parties, its validity cannot be left to one of the parties. a. Autonomy of contract b. Mutuality c. Relativity d. Obligatory force of contract 26. Contracts take effect only between the parties, their heirs and assigns. a. Mutuality b. Relativity c. Consensual d. Obligatory 27. Statement 1 – Chattel mortgage is a consensual contract and the creditor gets possession of the thing mortgaged Statement 2 – Pledge is a consensual contract and gives a personal right Statement 3 – Real estate mortgage is a real contract and creates a real right if registered with the Registry of Property Statement 4 – Antichresis is an accessory and gives a real right a. Only one statement is true c. Three statements are true b. Two statements are true d. All statements are false 28. Simulation of a contract maybe absolute or relative. It is relative when a. The parties do not intend to be bound at all b. The contract is void c. The parties conceal their true agreement Page 4 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. d. The parties are related within the 4th degree of consanguinity 29. Before acceptance is conveyed, an offer becomes ineffective upon the death, insanity, insolvency or civil interdiction a. Of the offeror b. Of the offeree c. Of either party d. Of both the offeror and offeree 30. Statement No. 1: A single act can give rise to several offenses, such as estafa under the Revised Penal Code and violation of B.P. 22. Statement No. 2: Unlike estafa, under B.P. 22 one need not to prove that the check was issued in payment of an obligation or that there was damage; the damage done is to the banking system. a. First is true, second is false b. First is false, second is true c. Both are true d. Both are false 31. The vote required so that the maximum deposit insurance cover may be adjusted in such amount, for such period, and/or for such deposit products – a. the adjustments is approved by a majority vote of the Board of Directors of PDIC in a meeting called for the purpose and chaired by the Secretary of Finance b. the adjustments is approved by a 2/3 vote of the Board of Directors of PDIC in a meeting called for the purpose and chaired by the Secretary of Finance c. the adjustments is approved by a unanimous vote of the Board of Directors of PDIC in a meeting called for the purpose and chaired by the Secretary of Finance d. the adjustments is approved by a mere majority of the quorum of the Board of Directors of PDIC in a meeting called for the purpose and chaired by the Secretary of Finance 32. A feature or characteristic of a bill of exchange not found in a promissory note. a. promise to pay b. order to pay c. promise in writing to pay d. unconditional promise in writing to pay 33. A promissory note is distinguished from a bill of exchange a. it contains an unconditional order b. the one who issues it is primarily liable c. the one who issues it is secondarily liable d. there are three parties, the drawer, the payee and the drawee 34. A Seller sold to a Buyer a piece of jewelry at a price of P20,000. The contract provides that the Buyer will pay the Seller cash of P15,000 and for the balance the Buyer will give the Seller a micro wave oven worth P5,000. What is the nature of the contract? a. Sale b. Partly sale and partly barter. c. Barter d. Commodatum. Page 5 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. 35. A sold and delivered her diamond ring to B. It was agreed upon that within 10 days B will state and fix the price. On the 10th day, B called up by telephone A and stated the price at P20,000 which A agreed. Is the sale perfected? a. No, at the time of the sale the price was not fixed. b. Yes, at the time of the sale the price was already known. c. Yes, the price stated and fixed by the buyer was accepted by the seller. d. No, the price was left to the discretion of one of the parties. 36. S orally offered to sell a certain diamond ring to B for P50,000.00. B accepted the offer and to prove that he was in earnest, he gave S P1,000.00. The parties agreed that the delivery of the ring and the payment of the price would be made 30 days later. On due date: a. S may collect from B P50,000.00. b. S may collect from B P49,000.00. c. S cannot enforce payment because the contract was not reduced to writing. d. S cannot enforce payment because there was no contract of sale yet. 37. Can future inheritance be the subject of a contract of sale? a. No, since it will put the predecessor at the risk of harm from a tempted buyer, contrary to public policy. b. Yes, since the death of the decedent is certain to occur. c. No, since the seller owns no inheritance while his predecessor lives. d. Yes, but on the condition that the amount of the inheritance can only be ascertained after the obligations of the estate have been paid. 38. B bought a refrigerator on installment from S and to secure his indebtedness. B executed a chattel mortgage on the refrigerator in favor of S. Upon default by B on his two (2) payments, the refrigerator was foreclosed and sold for P8,000 which was less than the balance due to S. How much can S still collect from B? a. 2,000 c. 10,000 b. 8,000 d. Nothing 39. In one of the following cases, delivery of the goods to a carrier for the purpose of transmission to the buyer transfers ownership to the latter. Which one is it? a. When by the terms of the bill of lading, the goods are to be delivered to the seller or his agent. b. When by the terms of the bill of lading, the goods are to be delivered to the order of the buyer or his agent but the seller retains the bill of lading. c. When the seller draws a bill of exchange on the buyer for the price of the goods and transmits such bill of exchange and the bill of lading to the buyer to secure acceptance or payment of the bill of exchange and the buyer dishonors the bill of exchange. d. When the owner does not reserve the, right of possession or ownership of the thing sold upon delivery to the carrier. 40. The following items pertain to either a contract of sale or a contract to sell. I. Ownership of the thing sold is transferred upon delivery II. Ownership of the thing is transferred to the buyer some future time. III. The risk of loss in on the buyer. IV. The risk of loss is on the seller. Based on the above data, which of the following is correct? a. Items I and III pertain to a contract to sell. b. Items II and III pertain to a contract to sell. c. Items II and IV pertain to a contract of sale. Page 6 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. d. Items I and III pertain to a contract of sale. 41. No merger or consolidation shall be valid unless a. approved by a three-fourths (3/4) vote of all the members with voting rights, present and constituting a quorum of each of the constituent cooperatives at separate general assembly meetings. b. approved by a two third (2/3) vote of all the members with voting rights, present and constituting a quorum of each of the constituent cooperatives at separate general assembly meetings. c. approved by a Majority vote of all the members with voting rights, present and constituting a quorum of each of the constituent cooperatives at separate general assembly meetings d. approved by a two third (2/3) vote of all the members with voting and non-voting rights, present and constituting a quorum of each of the constituent cooperatives at separate general assembly meetings. 42. Cooperatives may fall under any of the following types, except? a. Credit Cooperative b. Consumers Cooperative c. Producers Cooperative d. Primary Cooperative 43. Which of the following is not correct? a. A regular member is one who has complied with all the membership requirements and entitled to all the rights and privileges of membership. b. An associate member is one 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. c. An associate who meets the minimum requirements of regular membership, continues to patronize the cooperative for three (3) years, and signifies his/her intention to remain a member shall be considered a regular member. d. A cooperative organized by minors shall be considered a laboratory cooperative and must be affiliated with a registered cooperative. 44. Under Philippine Cooperative Code of 2008 (R.A. 9520), which of the following comply with the minimum requirement of the law to form a cooperative? Authorized share Subscribed Paid in Capital Capital Capital a. P100,000 P25,000 P10,000 b. P50,000 P25,000 P20,000 c. P50,000 P30,000 P7,500 d. P5,000 P5,000 P5,000 45. Which of the following may be considered valid grounds for termination of membership of a primary cooperative? a. death of a member in a secondary cooperative b. Insanity of a member c. insolvency of a member d. Dissolution of a member 46. This is the highest policy-making body of the cooperative and shall exercise such powers as are stated in this Code, in the articles of cooperation and in the bylaws of the cooperative? a. The general assembly b. The Board of Director Page 7 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. c. The Cooperative Development Authority d. The Chairman 47. The quorum of the general assembly shall consist of at least a. Majority of all members entitled to vote b. Majority of all members c. twenty-five per centum (25%) of all the members entitled to vote d. twenty-five per centum (25%) of all the members 48. Any vacancy in the board of directors of a cooperative may be filled by the vote of at least a majority of the remaining directors, if still constituting a quorum, except? a. Removal of director b. Death of director c. Expiration of term d. Resignation of director 49. Payment shall be made to, except: a. Obligee b. Creditor’s assignee c. Obligor d. Executor of the deceased oblige. 50. Which of the following is not really a special payment? a. Dation in payment b. Tender of payment and consignation c. Application for payment d. Payment by cession 51. The debtor who cedes or assigns his property to his creditor in payment of his debt shall be released from his obligation. a. To the extent of the net proceeds of the thing leased. b. To the extent allowed by the creditor c. Only to the extent of the net proceed of the thing assigned d. Totally extinguished under dation in payment 52. Upon the proposal of a third person, a new debtor substituted the original debtor without the latter’s consent. The creditor accepted the substitution. Later, however, the new debtor became insolvent and defaulted in his obligation. What is the effect of the new debtor’s default upon the original debtor? a. The original debtor is freed of liability since novation took place and this relieved him of his obligation. b. The original debtor shall pay or perform the obligation with recourse to the new debtor. c. The original debtor remains liable since he gave no consent to the substitution. d. The original debtor shall pay or perform 50% of the obligation to avoid unjust enrichment on his part. 53. Three of the following are requisites of cession in payment. Which is the exception? a. One debtor and one creditor b. Complete or partial insolvency c. More than one debt d. Abandonment of all debtor's property not exempt from execution 54. Consignation alone extinguished obligation under the following, except: a. When the creditor is incapacity to received payment at the time it is due. Page 8 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. b. When without just cause the creditor refuses to give receipt. c. When there are two or more persons claim the same right to collect. d. When the debt is already due and demandable. 55. To which of these modes of special payment is the law on sales applicable? a. Dacion en pago b. Cession en pago c. Tender of payment and consignation d. Application of payment 56. Drago owes Carlo P50,000. Without the intention of being reimbursed, Sandy paid Drago’s obligation and Carlo accepted it. Drago did not accept Sandy’s generosity. a. Drago’s obligation is totally extinguished. b. Sandy may ask reimbursement from Drago P50,000. c. Drago obligation to Carlo is extinguished but he may be compelled to pay Sandy P50,000 whether or not Drago accept the generosity of Sandy. d. Sandy may recover from Carlo P50,000. 57. Which of the following is not a requisite of application for payment? a. There must be at least two debtor or creditor; b. There must be at least two debt c. The debt must be of the same kind d. The payment of the debtor is not sufficient to cover all the debt. 58. Toblerone is a lessee of Codsbury building. Under the lease contract, Toblerone must pay the monthly rental of P25,000 to Codsbury at the latter’s office within the first 5 days of the month. On the sixth month of the lease, Toblerone went to Codsbury’s office to pay the rental but he was told by Goya, an employee to Codsbury, that the latter was confined at the hospital. Goya told Toblerone that he could entrust payment to him. Hershey, a son of Codsbury, who happen around, however, demanded that Toblerone must pay to him claiming that as Codsbury’s son, he was the one authorized to receive the payment. Give where you do not know to whom you will give your payment, which of the following modes of payment would you avail yourself of if you were Toblerone? a. Dacion en pago b. Payment by cession c. Consignation d. Application of payment 59. When the obligation consists in the delivery of a generic thing whose quality and circumstances have not been agreed upon: a. The creditor can demand a thing of superior quality b. The debtor can deliver of inferior quality c. The Debtor can deliver of superior quality even against the will of the creditor. d. The purpose and other circumstances shall be taken into consideration in determining the quality of the object to be delivered. 60. A delinquent corporation shall have the period of ___ to resume operations and to comply with all the requirements that the Commission shall prescribe. a. 2 years b. 3 years c. 4 years d. 5 years e. perpetual Page 9 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. 61. In case of continuous inoperation of the corporation, the corporation is declared delinquent and shall be allowed to comply within a period of – a. 1 year b. 2 years c. 3 years d. 5 years e. 30 days 62. In case of existing corporations prior to the effectivity of the Revised Corporation Code, the term of the corporations shall become perpetual unless they opt to retain their corporate term, the said corporation is given a period of ______ to decide/comply – a. 1 year b. 2 years c. 3 years d. 4 years e. 5 years 63. In case of existing corporations prior to the effectivity of the Revised Corporation Code, the term of the corporations shall become perpetual unless they opt to retain their corporate term, the vote required is – a. Majority of the OCS b. 2/3 of the OCS c. ¾ of the OCS d. Majority of the Quorum e. Majority of the BOD and 2/3 of the OCS 64. The amendments of the Articles of Incorporation shall take effect upon their approval by the Commission/SEC, or from the date of filing with the SEC if not acted upon within – a. one month from the date of filing b. 2 months from date of filing c. 3 months from date of filing d. 6 months from date of filing 65. Under the Revised Corporation Code, for registration purposes, what is the first step in the registration? a. Treasurer’s Affidavit b. Filing of By-Laws c. Filing of the Articles of Incorporation d. Promotion e. Corporate Name Verification 66. The following are amendable provisions in the Articles of Incorporation, except: a. Name of the corporation b. Term of the corporation c. Name of the incorporators d. Par value of the shares e. Amount of the ACS 67. Emergency Board is created upon the vote of: a. Unanimous vote of the members of the BOD b. Unanimous vote of the remaining directors c. Majority vote of the BOD d. Majority of the quorum of the BOD Page 10 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. e. 2/3 vote of the BOD 68. Period to report non-holding of the election of BOD. a. 30 days b. 15 days c. 60 days d. 10 days 69. The right of a corporation to exist as juridical person during its term as stated in the articles of incorporation despite the death of any of its stockholders is- a. Right of existence b. Pre-emptive right c. Right of Succession d. Pre-emptive right e. Right of redemption 70. One of the characteristics of treasury shares is that- a. They may be reissued or sold again b. They have status of outstanding shares c. They may participate in the meeting of corporation as voting shares d. They are entitled to dividends 71. The holders of non-voting shares shall nevertheless be entitled to vote on the following matter, except: a. Increase or decrease of capital stock b. Adoption or amendment of by-laws c. Dissolution of the corporation d. Dividend declaration 72. A corporate doctrine which the stockholders are not personally liable for corporate debts- a. Piercing the veil of corporate fiction b. Separate legal entity c. Trust fund doctrine d. Corporate opportunity 73. S1 Redeemable shares may be taken up or purchased by the purchased by the corporation even in the absence of unrestricted retained earnings. S2 Treasury shares may be reissued for a reasonable price even below par value. e. Both statements are false b. Both are true c. Only the first is true d. Only the first is false 74. Vacancy in the board of directors can be filled up by the remaining directors in the following cases except: a. Increase in the number of directors b. Resignation of the directors c. Death of the director d. None of the above 75. Statement 1. If the partner is the sole manager of the partnership and he associate another person with him in his share in the partnership, the person associated automatically becomes a partner in the partnership Page 11 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. Statement 2. A partner appointed as manager in a contract other than the articles of partnership may be removed with or without cause a. Both are true b. Both are false c. No.1 is true; No.2 is false d. No. 1 is false; No.2 is true 76. Statement 1. The conveyance of the whole interest of a partner in the partnership of itself dissolves the partnership. Statement 2. A partner has an interest in specific partnership property which he can assign to anybody, according to his will or discretion a. Both are true b. Both are false c. No.1 is true; No.2 is false d. No. 1 is false; No.2 is true 77. Statement 1. The contractual liability of the partners to third persons is joint and subsidiary Statement 2. A person may become both a limited and an industrial partner in the same limited partnership a. Both are true b. Both are false c. No.1 is true; No.2 is false d. No. 1 is false; No.2 is true 78. A and B were partners. A, being the managing partner, invited C to associate with him in his share in the partnership. What are the rights of the partners? a. A may have C as an associate in his share even without B’s consent b. A may not have C as an associate because he is already B’s partner c. C may become a partner upon invitation of A, the managing partner d. B may refuse to accept C as A’s associate due to conflict of interest 79. Statement 1. In case of loss of the business of the partnership, any partner who refuses to contribute additional share to the capital of the partnership shall be obliged to sell his interest in the partnership Statement 2. The partners are solidarily liable in case of a contractual liability Statement 3. The liability of the partnership for culpa aquiliana is solidary. a. All are true b. II and III are false; I is true c. I and II are true; III is false d. I and III are false; II is true e. I and II are false; III is true 80. A profit or loss must be distributed based on capital contribution and not based on agreement between the partners under the following except: a. If the designation of the profit and loss was entrusted to one of the parties b. A stipulation which excludes one of the capitalist partner from any share in the profits c. A stipulation which excludes one of the industrial partner from any share in the profits d. If the designation of the profit and loss was entrusted to third person by agreement between the partners 81. One of the following is not a characteristic of contract of partnership Page 12 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. a. Real, in that the partners must deliver their contributions in order for the partnership contract to be perfected b. Principal, because it can stand by itself c. Preparatory, because it is a means by which other contracts will be entered into d. Onerous, because the parties contribute money, property or industry to the common fund 82. One of the following is not a requisite of a contract of partnership. Which is it? a. There must be a valid contract b. There must be a mutual contribution of money, property or industry to a common fund c. It is established for the common benefit of the partners which is to obtain profits and divide the same among themselves d. The articles are kept secret among the members 83. A and B put up a partnership to engage in distribution of books and school supplies. A contributed P1M while B his services. A wants to put up a restaurant on the opposite side of the street. On the other hand, B wants to have a bakery beside A’s restaurant. Which of the following is correct? a. A may put up his a restaurant without need of securing B’s consent b. B may put up his bakery without need of securing A’s consent c. Both A and B can put their restaurant and bakery business without the need of securing each other’s consent d. Neither A nor B put up another business 84. A partnership formed for the exercise for a profession which is duly registered is an example of a. Universal partnership of profits b. Universal partnership of all present property c. Particular partnership d. Partnership by estoppels 85. A owes B two debts. The first debt is secured by a mortgage, the second is not. A tells B that the payment he is making should be applied to the second debt instead of the first. Which is correct? a. B may refuse such application on the ground that the first debt is more burdensome to the debtor. b. B may refuse such application because the payment shall be applied proportionately c. B cannot refuse the application because of the option of the debtor. d. B cannot refuse the application because it is to his benefit. 86. The following are characteristics of a cooperative, except: A. With a common enjoyment of property B. An autonomous and duly registered association of persons C. Who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations D. By making equitable contributions to the capital require E. Patronizing their products and services 87. A legal writ authorizing a sheriff to take into custody property in litigation belonging to a defendant until he complies with orders of the court A. Foreclosure B. Dacion en pago C. Sequestration Page 13 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. D. Counterclaim 88. Who makes important decisions for the cooperative? A. General Assembly B. Representative Assembly C. Documentation Committee D. Executive Committee E. Board of Directors 89. Alteration of the literary & artistic works, works that are derived from other existing sources A. economic right B. moral right C. derivative right D. right of exclusion E. IP right 90. S1 - Membership of banks to PDIC is mandatory. S2 - As for Philippine banks with branches outside the country, RA 9576 stipulates that subject to the approval of the Board of Directors, any insured bank with branch outside the Philippines may elect to include for insurance its deposit obligations payable at such branch. S3 - Foreign currency deposits are also insured by PDIC A. Both are correct B. Both are incorrect C. S1 is incorrect, S2 is correct D. S1 is correct, S2 is incorrect 91. S1 - Bank accounts may not be garnished by the creditors of the depositor as this constitutes a violation of the bank Secrecy Law. S2 - AMLC may inquire into deposits upon order of the court when there is probable cause that the deposits are related to the crime of unlawful activities A. Both are correct B. Both are incorrect C. S1 is correct, S2 is incorrect D. S1 is incorrect, S2 is correct 92. The Anti-Money Laundering Council, either upon its own initiative or at request of the Anti-Terrorism Council, further authorize to issue an ex parte order to freeze accounts without delay. Freeze order shall be for a period of ___ days, unless extended by the CA up to a period not exceeding six (6) months upon petition by the AMLC A. 10 days B. 20 days C. 30 days D. 40 days E. 50 days 93. Under the Unclaimed Balances Law, if the president, cashier or managing officer of the bank, building and loan association, or trust corporation neglects or refuses to make and file the sworn statement required by this action, such bank, building and loan Page 14 of 15 www.teamprtc.com.ph RFBT.FinPB5.21 EXCEL PROFESSIONAL SERVICES, INC. association, or trust corporation shall pay to the Government the sum of ________________________ thereof during which such default shall continue A. five hundred pesos a month for each month or fraction B. one thousand pesos a month for each month or fraction C. two thousand pesos a month for each month or fraction D. five thousand pesos a month for each month or fraction ~ten thousand pesos a month for each month or fraction 94. S1 – Notice of dishonor under BP 22 may be oral or in writing. S2 – Violation of BP 22 is categorized as a transitory or continuing crime A. Both are correct B. Both are incorrect C. S1 is correct, S2 is incorrect D. S1 is incorrect, S2 is correct 95. Which of the following is not one of the sources of liability for damages? A. Dolo Incidente C. Negligence B. Dolo causante D. Delay 96. Annual Financial Statements need not need an independent CPA if the total assets or liabilities is – A. below 50,0000 B. below 100,000 C. below 500,000 D. below 600,000 E. below 1 Million 97. When the manner of management has not been agreed upon, A. Unanimous consent of all the managing partners is required B. Vote of the partners owing the controlling interest prevails C. All the partners are considered as partners D. Decision of the majority prevails 98. If the appointment of a manager is in the articles of partnership, the appointment is ____________. A. revocable C. permissible B. irrevocable D. mandatory 99. Where the unanimity of action on the part of the managing partners is stipulated, the general rule is – A. Unanimous consent of all the managing partners is required B. Vote of the partners owing the controlling interest prevails C. Decision of the majority prevails D. None of the following 100. Period to transfer the shares to the heirs of the OPC. A. 5 days C. 7 days B. 10 days D. 60 days End of Examination Thank you for participating in Team PRTC Nationwide Online Final Pre-Board Examination Page 15 of 15 www.teamprtc.com.ph RFBT.FinPB5.21  Manila * Cavite * Laguna * Cebu * Cagayan De Oro * Davao Since 1977 RFBT VILLEGAS/CAPUNO/AGUILAR FINAL PRE-BOARD EXAMINATION September 27, 2021 Multiple Choice. Select the letter that corresponds to the best answer. This examination consists of 100 items only. The exam is good for three (3) hours. Good luck! 1. A condition which, if imposed on an obligation will be disregarded and will therefore make the obligation immediately demandable. a. If Juan commits suicide. b. If Juan passes the bar examination. c. If Juan kills Pedro. d. If Juan will not rise from the dead 2. X and Y are solidary debtors of A, B and C, joint creditors to the amount of P30,000. How much can B collect from X. a. B can collect P30,000 from X. B in turn has to give A and C P10,000 each. b. B can collect P10,000 from X. c. B can collect P15,000 from X. d. B can collect P30,000 from X. X in turn can recover from Y the amount of P15,000. 3. X obligated himself to pay Y the amount of P30,000 30 days after May 31, 2021 plus a penalty of P3,000 if he fails to pay the obligation on due date. After demand for payment by Y, X offered to pay on July 30, 2021. Y can demand from X a. P30,000 plus P3,000 plus legal interest b. P30,000 plus legal interest c. P30,000 plus P3,000 d. P30,000 plus P3,000 plus legal interest plus damages 4. On October 4, 2020, A was indebted to B for P50,000 for a 20-day period. A proposed to B that X will pay A’s debt, and that A will be free from all liabilities. B and X agreed to the proposal. On October 25, 2020, when B tries to collect from X, he finds that X is insolvent. At the time of delegation, X was insolvent but this was not known to A. The insolvency is not of public knowledge. So B sues A on the ground that it was A who made the proposal and that A really guaranteed X’s solvency. Decide. a. A is liable because he is presumed to have guaranteed X solvency. b. A is not liable, because A does not know the insolvency of X at the time of delegation and neither was the insolvency of public knowledge. c. A is liable because he did not exercise due diligence in determining the insolvency of X. d. A is liable because X agree to the proposal to make himself solidarily liable for the obligation. 5. X entered into a contract with Y, whereby X sold his land orally to Y. The land has been delivered and the money has been paid. Is the oral sale of land valid? a. The contract is not valid because it is not in writing as required by the Statute of Frauds. b. The contract is not valid because the contract is not made in public instrument. c. The contract is unenforceable. d. The contract is valid because the contract is already perfected and executed 6. This kind of defective contract refers to that contract which is validly agreed upon because all the essential elements exist, but Courts can nullify it when there is damage or prejudice to one of the parties or to a third person. Its enforcement would cause injustice by reason of some external facts. a. Voidable contract c. Rescissible contract b. Void or inexistent contract d. Unenforceable contract Page 1 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. 7. In order that fraud may make a contract voidable a. It may be incidental but should have been employed by both parties. b. It should be serious and the parties must be in pari delicto. c. It should be serious and should not have been employed by both contracting parties. d. It may be incidental but both parties should not be in pari delicto. 8. A, a businessman, borrowed P500,000 from B, a friend. To pay the loan, A issued a postdated check to be presented for payment 30 days after the transaction. Two days before the maturity of the check, A called up B and told him no to deposit the check on the date stated on the face thereof, as A had not deposited in the drawee bank the amount needed to cover the check. Nevertheless, B deposited the check in question and the same was dishonored for insufficiency of funds. A failed to settle the amount with B in spite of the latter’s written demand received personally by. Is A guilty of violating the Bouncing Checks Law? a. No. A is not liable because of the timely order of stop payment b. Yes. A is liable because the check was dishonored. c. No. A is not liable because there was no intent to defraud d. It depends. If the damage suffered by B is proven, then he is liable; otherwise, he is not. 9. Which of the following statements is correct? a. A partnership contract is not covered by Statute of Fraud. b. A limited partnership is one having at least one general partner or one limited partner and the limited partner shall not be liable for the obligations of the partnership. c. A limited partner who takes active part in the management of the firm becomes liable as a general partner. d. The contract of partnership is void if it contains a stipulation which excludes a partner from sharing in the profits of the firm. 10.A Partnership is not dissolved upon the death of a a. General partner c. Limited partner b. Industrial partner d. General-limited partner 11.One of the following is not an alternative remedy available to a seller of personal property on installment if buyer defaults. a. To cancel the sale b. To foreclose the chattel mortgage. c. To sue for specific performance. d. To take possession of the property and forfeit the amount paid by buyer. 12.A sold to B 200 cavans of rice for P150 per cavan or for a total price of P30,000, delivery to be made at the place of business of B. B knew that A had several cases in court for breach of contract. If A delivers only 150 cavans of rice, what is the right of B? a. He may reject the goods so delivered. b. He can accept the 150 cavans but he should withhold payment for the entire 200 cavans. c. He can accept the 150 cavans but pay B for P130 a cavan, which is below the fair market value d. He can file an annulment for the contract. 13.A borrowed money from B in the amount of P90,000 and issued on January 10, 2017 a check in the amount of P100,000 to the latter in consideration thereof. The check is dated February 10, 2017. On the date of the maturity of the check. There was sufficiency of funds to cover the said check. However, A requested B not to deposit the check. After two months, A requested B anew not to encash the check after three months considering that his fund in the bank is not enough to cover the said check. B agreed. After three months, A requested B for the third time to encash the check after four months for the same reason. B agreed. After four months, B presented the check with the drawee bank for encashment; however, the bank dishonored the check for the reason “Stale Dated.” B demanded from A to pay him the face value of the check, but the latter refused to do so. Can A be held liable for violation of BP 22? a. Yes, mere issuance of a bouncing check is punishable b. No, since the check has sufficient funds in the drawee bank Page 2 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. c. Yes, BP 22 does not distinguish between any kind of check d. No, the check was dishonored by the drawee bank for the reason “Stale Dated” and not “DAIF” 14.S1 - The maximum imprisonment for hacking is 6 years. S2 – The penalty for Piracy is either P5M or 10 years of imprisonment. a. All are correct b. All are incorrect c. Only S1 is incorrect d. Only S2 is incorrect 15.S1 - The introduction of computer viruses is also categorized as hacking. S2 - The Department of Trade and Industry (DTI) is the lead implementing agency in E- Commerce Law. a. All are correct b. All are incorrect c. Only S1 is incorrect d. Only S2 is incorrect 16.S1 - An employer can ask its employees to submit declaration forms that provide personal data – for instance, whether they have traveled to or been in close contact with persons who have gone to regions affected by COVID-19, whether they are experiencing symptoms. S2 - If the collection of the information is for journalistic purpose and for public concern, there is a need for the consent of the data subject. a. All are correct b. All are incorrect c. Only S1 is incorrect d. Only S2 is incorrect 17.S1 - The Data Protection Office is headed by Data Protection Officer and two of its main functions are compliance with the Data Privacy Act of 2012 and its IRR and support academic units and administrative offices in maintaining privacy in their functions and projects. S2 - Republic Act No. 10973 or also known as the Data Privacy Act of 2012. It was signed into law by President Benigno Aquino III last August 15, 2012. a. All are correct b. All are incorrect c. Only S1 is incorrect d. Only S2 is incorrect 18.The bank deposit secrecy law bars all inquiries into a bank deposit. A deposit may, however, be looked into a. after prior notice to the depositor. b. upon court order in annulment of marriage cases. c. in cases of impeachment. d. on motion in a bribery case. 19.When an endorser waives presentment and notice of dishonor, he increases his liability. His endorsement is: a. Facultative endorsement b. Qualified endorsement c. Alternative endorsement d. Restrictive endorsement 20.Ariel issued a note to Brando. There was a total failure of consideration. Brando issued the note for consideration to Cecil who is a holder in due course. Cecil indorsed the note to David who knew of the failure of consideration. Can David successfully collect from Ariel? a. No, because David knew the failure of consideration. b. No, although David acquired the rights of Cecil, a holder in due course and he was not a party to any illegality. c. Yes, because David acquired the note for consideration. Page 3 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. d. No, because David is not a holder in due course. 21.The SEC, after notice and hearing, may dissolve a corporation upon filing of a verified petition for the dissolution, on grounds provided by law. Which of the following statement is not correct? a. a. In case of deadlock in the management of the affairs and business of a close corporation, the SEC, upon written petition by any stockholder, shall have the power to make such order as it deems appropriate, including an order dissolving the corporation. b. Any stockholder of a corporation may, by written petition to the SEC, compel the dissolution of the corporation whenever any acts of its directors, officers or those in control of the corporation is illegal, fraudulent or dishonest. c. The SEC can automatically issue a certificate of dissolution in case a corporation filed for its dissolution and there are creditors affected provided that majority of the board of directors or trustee consented to such action. d. The SEC, after notice and hearing, may dissolve a corporation in case there are violations of the provisions of the Corporation Code not specially penalized therein. 22.Which of the following will cause the automatic dissolution of a corporation? a. Commission by the corporation of an ultra vires act b. Continuous non-operation for a period of at least 5 years c. Refusal to comply with or defiance of any lawful order of the SEC restraining commission of acts which would amount to grave violation of its franchise d. None of the above 23.S1 – Patentable inventions refer to any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially applicable. S2 – Copyright is confined to literary and artistic works which are original intellectual creations in the literary or artistic domain that is protected from the moment it was registered. S3 – A trademark is any visible sign capable of distinguishing the goods of an enterprise and shall include a stamped or marked container of goods. a. S1 and S2 are false b. S1 and S3 are false c. S2 and S3 are false d. S1 and S2 are true e. Only 1 statement is false 24.Jurisdiction over IP cases for infringement of registered trademarks, unfair competition, false designation of origin and false description or representation is lodged in – a. IPO b. Regional Directors of IPO c. Provincial Directors of IPO d. MTC e. RTC 25.It is the act of taking advantage of a shortage of securities in the market by controlling demand side, and exploiting market congestion during such shortages in a way as to create artificial prices. a. Painting the tape b. Squeezing the float c. Hype and Dump d. Improper Matched order e. Marking the close 26.A bought from the store some goods and paid with a check. The check however bounced. The payee called the drawee bank asking for the name of A. The drawee bank refused citing non- disclosure of bank deposits. Is the bank correct? a. No, it is not the subject matter of litigation. b. No, because what the law prohibits is the disclosure of the amount of the deposit, not the name of the drawer who issued a bouncing check. c. Yes, the peso deposit may not be examined upon order of the court since it is not the the subject of litigation. Page 4 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. d. Yes, deposits may not be inquired into since it the subject matter of litigation. 27.S1 – A person cannot be charged of both the offense of money laundering and the unlawful activity. S2 – Failure to report a covered transaction or suspicious transaction is one of the instances when money laundering is committed. a. All statements are correct b. All statements are false c. Only S1 is incorrect d. Only S2 is incorrect 28.X Bank was closed by the Monetary Board on account of insolvency. At the time it was closed, A has three accounts with X Bank and each account has an outstanding balance of P250,000 or a total amount of P750,000. How much can A recover from the PDIC? a. The amount recoverable is P750,000, each of the account shall be taken into consideration b. The amount recoverable is only P500,000 for only one account c. The amount recoverable is only P500,000 for all the three accounts d. The amount recoverable is only P500,000 for the two accounts 29.In order to give rise to the prima facie presumption of knowledge of insufficiency of funds or credit, the prosecution must show the following, except: a. The first and third elements of the offense are present b. The check was presented within ninety days from the date of the maturity of the check c. Offender received an oral notice of dishonor d. Despite the lapse of five banking days after receiving notice, the check has not been paid by the drawee 30.S1 – For Plunder to be an Unlawful activity under AMLA, Plunder, it must be at least P75 Million. S2 – Violation of Section 19 (A)(3) of Republic Act No. 10697, otherwise known as “The Strategic Trade Management Act”, in relation to Proliferation of Weapons of Mass Destruction (WMD) and Proliferation financing are included as part of the Covered Transactions. a. All are correct b. All are incorrect c. Only S1 is correct d. Only S2 is correct 31.It refers to a provisional remedy aimed at preserving monetary instruments or properties in any way related to an unlawful activity or money laundering offense defined herein, during the pendency of civil forfeiture proceedings. a. Escheat b. Freeze Order c. Garnishment d. Asset Preservation Order e. Injunction 32.It refers to a bank that has no physical presence in the country in which it is incorporated and licensed, and which is unaffiliated with a regulated financial group that is subject to effective consolidated supervision. a. Foreign bank b. Universal Bank c. Commercial Bank d. Intermediary Financial Institution e. Shell bank 33.S1 - No court shall issue a temporary restraining order or a writ of injunction against any provisional asset preservation order or asset preservation order, except the Court of Appeals or the Supreme Court. S2 - No prior criminal charge, pendency of a case, or conviction for an unlawful activity or ML offense is necessary for the commencement or the resolution of a petition for freeze order. a. All are correct Page 5 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. b. All are incorrect c. Only S1 is incorrect d. Only S2 is incorrect 34.A risk-based approach shall be undertaken depending on the type of customer, business relationship, or nature of the transaction or activity. a. Customer Due Diligence b. Customer Identification c. Customer Verification Process d. Determination Of The Purpose Of Relationship e. Institutional Risk Assessment 35.S1 - For applications or requests for license, clearance, permit, certification or authorization requiring the approval of the local Sangguniang Bayan, Sangguniang Panlungsod, Sangguniang Panlalawigan, 45 working days which can be extended for another 10 days. S2 - Business permits shall be valid for a period of one (1) year. a. All are correct b. All are incorrect c. Only S1 is correct d. Only S2 is correct 36.S1 - If the closed bank is not rehabilitated or taken over by another bank, amount in excess of the P500,000 coverage can still be claimed upon the final liquidation of the remaining assets of the closed bank. S2 - Depositors with valid deposit accounts with balances of P100,000.00 and below are not required to file claims provided they have no obligations with the closed bank, or have not acted as co-makers of these obligations, or are not spouses of the borrowers. a. All are correct b. All are incorrect c. Only S1 is correct d. Only S2 is correct 37.S1 – Ratification extinguishes the action to annul a voidable contract. S2 – Unenforceable contracts cannot be assailed by third persons a. Both statements are true b. Both statements are false c. S1 is true, S2 is false d. S1 is false, S2 is true 38.The following falls under the Statute of Fraud, except: a. Agreement that by its term is not to be performed within a year from the making thereof b. A special promise to answer for the default, debt or miscarriage of another c. An agreement made in consideration of marriage, other than the mutual promise to marry d. Donation of immovable property e. Sale of immovable property 39.Statement No. 1 – Ante-dating or post dating is per se illegal. Statement No. 2 – The instrument should strictly follow the language of the law on negotiable instrument. a. Statement 1 is correct; Statement 2 is incorrect b. Statement 1 is incorrect; Statement 2 is correct c. Both are correct d. Both are incorrect 40.The Latin term for “one’s personal choice to become or accept a partner”. a. Negotiorum gestio b. Delectus personae c. Solutio indebiti d. Custodia legis e. Vinculum Juris Page 6 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. 41.The following are some of the corporate acts that need the vote of stockholders holding 2/3 of the authorized capital stock. Which should not be included? a. Adoption, amendment or repeal of by-laws b. Amendment of articles to increase or decrease capital stock c. Incurring, creation or increase of bond indebtedness d. Approval of merger or consolidation 42.It is one brought by one or more of the stockholders or members in the name and on behalf of the corporation to redress wrongs committed against it or to protect or vindicate corporate rights, whenever the officials of the corporation refuse to sue, or are the ones to be sued or hold control of the corporation. a. mandamus b. quo warranto c. appraisal right d. derivative suit e. c. individual suit 43.In a limited partnership, the creditor of a limited partner may charge the interest of the indebted limited partner, the interest so charged may be redeemed with: a. partnership property b. separate property of any general partner c. both partnership property and separate property of a general partner cumulatively d. both partnership property and separate property of a general partner alternatively e. both partnership property and separate property of a general partner successively 44.Contracts are effective and binding only between the parties, their assigns and their heirs. Three of the following enumerations are exceptions as provided by law. Which does not belong to the exception? a. Where there is a stipulation in favor of a third party. b. Where one of the parties to the contract dies and thereafter a suit is filed on the basis of the contract. c. Contracts creating real rights d. Interference in contractual relations 45.Consignation is a mode of payment which extinguishes an obligation. Which of the following is not a requisite for consignation? a. Actual consignation with the proper judicial authorities b. Prior notice has not been made c. Existence of a valid debt d. There must be prior notice of consignation to persons interested in the fulfillment of the obligation 46.The creditor shall have a right to indemnity for damages when, through the fault of the debtor, all the things which are alternatively the object of the obligation have been last or compliance of the obligation has become impossible. The indemnity shall be fixed on the basis of: a. The value of the least expensive things b. The value of the most expensive things c. The value of the last thing which disappeared d. The value of the first thing which disappeared 47.A & B are joint creditors mancomunados of X and Y, joint debtors, for a total sum of P9, 000. A owns 1/3 of the credit and B owns 2/3 of it. But X owes 2/5 of the debts and Y owes 3/5 of the debts. In this case. a. B can only collect from X, P5, 400 and from Y, P3, 600 b. A can only collect from X, P4, 500 and from Y, P4, 500 c. A can only collect from X, P3, 600 and from Y, P5, 400 d. B can only collect form X, P9, 000 and from Y, P0 Page 7 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. 48.A, guardian of B, sold B’s house and lot worth P480, 000 for P240, 000. a. The contract can be rescinded because of inadequacy of price b. The contract cannot be rescinded because there is no fraud mistake or undue influence c. The contract cannot be rescinded because all elements of contract are present d. The contract cannot be rescinded because it is expressly provided by law as one of the contract which cannot be rescinded 49.X alleged that Y promised to give X one hectare of land. This is in consideration of X’s meritorious services to Y. Y pleads in defense that since the promise was not in writing, it is unenforceable under the Statue of Frauds. Decide. a. The promise is unenforceable because it is not in writing b. The Statute of Frauds is applied because A has rendered services already c. The Statute of Frauds is inapplicable here because the promise to give the land is not a sale of real property d. The Statute of Frauds can apply to partially executed contracts. 50.Mr. AB owes Mr. CD P150, 000 due on August 31, 2016. Mr. AB executed a mortgage in favor of Mr. CD on MR. AB’s building was totally lost due to a strong typhoon. On August 12, 2016, Mr. CD demanded payment from Mr. AB. Is Mr. CD’s demand valid? a. No. The obligation is with a definite period, thus the creditor cannot demand fulfillment of the obligation as such would be prejudicial to the rights of the debtors. b. No. The obligation is extinguished because the obligation is lost due to a fortuitous event. c. Yes. The debt becomes due at once because the guaranty was lost even through a fortuitous event unless the debtor can mortgage another property that is equally satisfactory. d. Yes. The debt becomes due at once because the tenor benefit is given solely to the creditor thereby giving the creditor the right to demand performance even before the due date. 51.A certificate of stock is not a negotiable instrument because it lacks the requirement of: a. The instrument must be in writing and signed by the maker or drawer. b. It must contain an unconditional promise or order to pay a sum certain in money c. It must be payable to bearer or order d. It must be payable on demand or at a fixed or determinable future time. 52.In three of the following cases, advanced payment by the debtor is not recoverable. Which is the exception? a. The obligation was not due and demandable but the debtor delivered that it was already due and demandable and he insisted to pay. b. The payment is only for interest and credited to the proper period. c. The advance payments were made by both parties reciprocally d. The debtor was not aware of the period 53.A owes B P10,000. With consent of both, C pays B P5,000. Now B and C are the creditors of A to the amount of P5, 000 each. Suppose A has only P5, 000. Which is correct? a. B and C should divide the P5, 000 equally b. C should be preferred c. A may choose who to pay d. B should be preferred 54.The following are requisites of Pledge except: a. The disposal of the property by the pledgee b. Absolute ownership of the property pledged c. The thing due pledged may be places in the possession of the third person d. To bind a third person, it must be recorded in the office of the Register of Deeds 55.Which one of the following is not an element of legal compensation? a. Debts to compensated are due and demandable b. There is no controversy or adverse claim over any debts to be compensated c. There are two or more debts of the same amount d. There are two persons who are creditors and debtors of each other Page 8 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. 56.A and B are capitalist partners with C as industrial partner. A and B contributed P20,000 each to the capital of the partnership. A contractual liability of P50,000 was incurred by the partnership in favor of X. The assets of the partnership have been exhausted still leaving an unpaid liability of P12,000. What are the rights and the obligation of the partners, if any? a. A, B and C are liable to X, and C after giving his share may ask reimbursement from A and B, unless otherwise stipulated. b. A and B only c. C only d. A, B and C has no right for reimbursement from A and B unless expressly stipulated 57.The three most forms of negotiable instruments are promissory notes, bill of exchange and check. Which of the following characteristics applies only to a check? a. The one who signs the instrument is primarily liable b. It is an unconditional order to pay a sum certain in money c. It is always drawn against a bank d. It must be payable on demand or at a fixed or determinable future time to order or to bearer 58.A, B, and C entered into an oral contract of partnership each contributing P1M each to the common fund plus other personal properties of the same amount and failed to register the partnership with the SEC. Is the partnership valid? a. No, because every contract of partnership having a capital of three thousand pesos or more in money or property must be in public instrument and registered with the SEC. b. Yes, because public instrument is necessary only in case of contributions of immovables. c. Yes, because a partnership contract can always be oral. d. No, because registration with the SEC is essential for a partnership to the valid and acquire juridical personality. 59.A and B are co-owners of a parcel of land from which they derive profits in equal sharing being co-heirs in inheritance. Is there a partnership? a. There is a partnership because of the equal sharing of profits. b. There is no partnership because co-ownership by itself does not establish a partnership despite the sharing of profits. c. There is no partnership since in partnership division of profits is not always necessary among partners. d. There is partnership they being co-owners and co-possessors. 60.A contributed P1M, B contributed P1M, and C contributed services. They agreed to divide the profits and losses equally. In case of loss of P.3M, for how much, if any is C is liable? a. Nothing, because an industrial partner is exempt from losses. b. P.1M but with reimbursement from A and B equally. c. A and B alone shall shoulder the loss at C’s option. d. P.1M 61.A subscribed to 1,000 shares of stock of X Corporation and paid 25% of the said subscription. Can he vote all his subscribed shares? a. No, because the subscription has not been fully paid. b. No, because his shares have become delinquent shares. c. Yes, as regards the paid percentage of the subscription. d. Yes, because shares although unpaid but not delinquent can be voted. 62.A granted B the exclusive right to sell his brand of Maong pants with the price payable in two months from delivery and promising B a 20% commission on all sales. After delivery of the merchandise to B but before he could sell them, B’s store was burned without his fault, together with all of the pants. Must B pay the pants? a. B, has no obligation to pay A because the pants were lost due to fortuitous event and without B’s fault. b. B need to pay A because as agent he has mo obligation to pay the price to his principal A when the loss was without his fault. Page 9 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. c. B must pay A the value of the pants at the time of the loss since he was already the owner thereof upon the delivery to him. d. B must pay A the price agreed upon because there was sale and he became the owner thereof after delivery. 63.In 2016, A bound himself to sell to B his house and lot which was being rented by another person, if B passes the CPA examination in 2018. Luckily for B, he passed the said examination. However, A sold the said property to C in 2017 after the agreement was entered into by A and B. Was the sale valid? a. The sale was not valid because the property was already sold by A to B although it was subject to a suspensive condition. b. The same was not valid if the buyer was aware of the promise to sell of A to B. c. It was valid because A was still the owner of the house and lot at the time of the sale but with resolutory condition. d. It was valid sale if the buyer was in good faith and for value and without knowledge of the promise to sell of A to B. 64.In three of the following corporate proposals, a dissenting stockholder has the right to surrender his share of stock to the corporation and demand for the payment of their fair market value. Which is the exception? a. Sale, mortgage or disposition of all or substantially of the corporate assets b. Shortening or extending the corporate term c. Investment of corporate funds in another corporation or business d. Entering into management contract with another corporation 65.Which of the following is considered a prima facie evidence of being a partner in a partnership? a. When a person receives a share in the profits as payment for a loan b. When a person shares in the gross return of a business c. When the person receives a share in the income as a co-owner d. When a person receives a share in the profits 66.A profit or loss must be distributed based on capital contribution and not based on agreement between the partners under the following, except: a. If the designation of the profit and loss was intrusted to one of the partners b. A stipulation which excludes one of the capitalist partner from any share in the profits c. A stipulation which excludes one of the industrial partner from any share in the profits d. If the designation of the profit and loss was intrusted to third person by agreement between the partners 67.The following right can be exercised by partner assignee of interest? a. To inspect partnership book b. To demand true and full information of partnership affairs c. To participate in the management d. To share in the profit in accordance with his contract to which the assigning partner would otherwise be entitled 68.Generally, a corporation’s article of incorporation must include all of the following, except the a. Name of the corporation c. Name of each incorporators b. Number of authorized shares d. Quorum requirements 69.The Corporation Code sanctions a contract between two or more corporations which have interlocking directors, provided there is no fraud that attends it and it is fair and reasonable under the circumstances. The interest of an interlocking director in one corporation may be either substantial or nominal. It is nominal if his interest: a. does not exceed 25% of the outstanding capital stock b. exceeds 25% of the outstanding capital stock c. exceeds 20% of the outstanding capital stock d. does not exceed 20% of the outstanding capital stock Page 10 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. 70.A subscribed to 100 shares of X corporation, paying 25% thereof. Despite the demand by A for the issuance of stock certificate, the corporation refuses to issue one corresponding to the 25% paid. Meanwhile, the corporation has become insolvent and A now refuses to pay his unpaid balance on his subscription. Is the refusal to issue a stock certificate valid? a. Not valid, because stock certificate can be issued for the paid portion of the subscription. b. Valid, because stock certificate can only be issued after full payment of the subscription. c. Valid as regards to unpaid percentage on the subscription. d. Not valid because only delinquent shares may be denied stock certificate 71.An Associate member in Cooperative is: S1 – One 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. S2 - One who meets the minimum requirements of regular membership, continues to patronize the cooperative for three (3) years, and signifies his/her intention to remain a member shall be considered a regular member a. Both are correct b. Both are incorrect c. S1 is correct, S2 is incorrect d. S1 is incorrect, S1 is correct 72.The number of Board of Directors of a bank, including the independent directors are – a. 5 – 15, two of whom are independent directors b. 5 – 15, three of whom are independent directors c. 5 – 15, four of whom are independent directors d. 5 – 15, five of whom are independent directors 73.S1 – The liability of the PDIC for insured deposits rests upon the existence of deposits with the insured bank and on the negotiability or non-negotiability of the certificates evidencing these deposits. S2 – The claim under PDIC must be filed within 2 years from actual takeover by the receiver. a. All statements are correct b. All statements are incorrect c. Only S1 is correct d. Only S2 is correct 74.S1 - When one of the parties has brought an action to enforce the contract, he cannot subsequently ask for its reformation. S2 - The injured party may seek rescission even after he has chosen the fulfillment of the obligation if the latter should become impossible. a. True, true b. True, false c. False, false d. False, true 75.X owns 99% of the capital stock of SSS Corporation. X also owns 99% of TTT Corporation. SSS Corporation obtained a loan from VW Bank. On due date, SSS Corporation defaulted. TTT Corporation is financially healthy. Which statement is most accurate? a. X being a controlling owner of SSS Corporation can automatically be held personally liable for the loan of SSS Corporation. b. TTT Corporation, owned 99% by X, can automatically be held liable. c. SSS Corporation and TTT Corporation, although both are owned by X, are two (2) distinct corporations with separate juridical personalities hence, the TTT Corporation cannot automatically be held liable for the loan of SSS Corporation d. The principle of piercing the veil of corporate fiction can be applied in this case 76.D mortgaged his car to C as security for a loan. Failing in the payment of the loan, C foreclosed the chattel mortgage and sold the car at public auction. In case of deficiency, Is D liable for it? a. Yes, in the absence of contrary stipulation. b. No, because it would be unjust enrichment on the part of creditor. c. Yes, if so agreed upon by the parties. d. No, unless stipulated. Page 11 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. 77.S1 - The directors and officers of a cooperative shall not be entitled to any per diem when, in the preceding calendar year, the cooperative reported a net loss or had a dividend rate less than the official inflation rate for the same year. S2 - Any compensation other than per diems may be granted to directors by a 2/3 vote of the members with voting rights at a regular or special general assembly meeting specifically called for the purpose. a. Both are correct b. Both are incorrect c. S1 is correct, S2 is incorrect d. S1 is incorrect, S1 is correct 78.P, the president of X Corporation, by virtue of a resolution of the stockholders empowering to enter into a contract with T Corporation for the purchase of certain machineries, actually did so. Such contract is: a. Valid c. Voidable b. Rescissible d. Unenforceable c. Voidable e. Void 79.The holders of non-voting shares shall nevertheless be entitled to vote on the following matter, except: a. Increase or decrease of capital stock; b. Adoption or amendment of by-laws; c. Dissolution of the corporation; d. Dividend declaration. 80.(1) Appraisal right means that whenever the capital stock of a corporation is increased and new shares of stock are issued, the new issue must first be offered to the stockholders in proportion to their existing shareholdings before subscription are received from the general public. (2) Ultra vires acts are illegal and therefore void. (3) Certificate of incorporation is the document prepared by the persons establishing the corporation and filed with the SEC containing the matter required by the Corporation Code. a. Only (1) is true b. Only (2) is false c. Only (3) is false d. All are false e. All are true 81.An individual or a domestic corporation designated in a written power of attorney, by a foreign corporation authorized to transact business in the Philippines, on whom any summons and other legal processes may be served in all actions or other legal proceeding against such corporation is called- a. Resident director b. Resident agent c. Provisional director d. Receiver e. Trustee 82.(1) Corporators are incorporators. (2) Incorporators are corporators. a. (1) is wrong but (2) is correct b. (1) is correct but (2) is wrong c. Both statements are correct d. Both statements are wrong 83.Which of the following statement is correct- a. Eleemosynary corporation is one established for business or profit; b. Corporation aggregate is one established for religious purposes; c. Civil corporation is one established under the laws of the Philippines; d. Lay corporation is one established for purposes other than religious. Page 12 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. 84.Which of the following statements is correct- a. To sell lease, mortgage or otherwise dispose all or substantially all of the corporate assets, majority vote of directors or trustees and majority of the outstanding capital stock or of the members is needed; b. To enter into management contract, a majority vote of the board of directors and majority of the outstanding capital stock or of the member is required; c. To issue stock dividends, majority vote of the quorum of the board of directors and majority of the outstanding capital stock is required; d. To invest corporate funds in another corporation or business, majority vote of directors or trustees and majority of the outstanding capital stock or of the members thereof. 85.A. It is illegal to issue watered stocks. However, stocks issues without any consideration at all is justified if such issues are bonus shares. B. A director is removed from office by a vote of the stockholders holding at least 2/3 of the outstanding capital stock. The vacancy occasioned by such removal can be filled by the vote of the majority of the remaining directors if still constituting a quorum. a. Only letter A is correct b. Both letters are correct c. Only letter B is correct d. Both are incorrect 86.Charlie gave his diamond-encrusted watch worth Php 25,000.00 to his friend Danny as a birthday gift. Danny readily accepted the gift with profuse gratitude. One month later, they had a serious quarrel; hence, Charlie demanded the return of the watch from Danny. Danny refused to return the watch. What is the nature of this donation? a. Valid, because there was intention to donate and delivery by the donor Charlie. b. Valid, because there was acceptance and receipt of the donated personal property by the donee Danny. c. Void, because the value of the thing donated exceeded Php 5,000.00 and the donation and acceptance were not in writing. d. Void, because the value of the thing donated exceeded Php 5,000.000 and the donation and acceptance were not in a public instrument. 87. SUJU Corporation, through its Board of Directors and with the unanimous approval of the stockholders declared to grant stock dividends to its stockholders for the year 2008 amounting to 79 Billion Pesos. After examining the books and other records of the corporation, Sungmin Lee, Vice President for Finance, discovered that the authorized capital stock of the Corporation is almost depleted, that is – almost all were already issued and the remaining cannot accommodate the needed stocks for stock dividend distribution. The Corporation though was liquid in cash and has retained earnings amounting to 365 Billion Pesos. How should the Board of Directors of SUJU Corporation best act on it? a. Issue a Board Resolution deferring the distribution of dividends for the said year. b. Increase the authorized capital stock and amend the Articles of Incorporation of SUJU Corporation to cater to the needed stocks for stock dividend distribution. c. Divide the remaining unissued stocks pro rata to the stockholders as stock dividends. d. Recall its previous Resolution declaring stock dividends and in its stead, issue another Resolution declaring cash dividends for year 2008. 88.The following instances are considered as “indicators” that a foreign corporation is “transacting business” in the Philippines, even without securing a license, except a. Soliciting orders, service contracts, opening offices, whether called "liaison" offices or branches b. Subscribing shares of stock from a domestic corporation c. Appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totalling one hundred eighty (180) days or more Page 13 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. d. Participating in the management, supervision or control of any domestic business firm, entity or corporation in the Philippines 89.Which among the following is not a necessary result or consequence when a foreign corporation does not secure a license and/or registers? a. the foreign corporation can do regular business in the Philippines b. the foreign corporation can avail the aid of the Philippine courts and sue c. the foreign corporation may be sued in any regular court for any valid cause of action recognized under Philippine laws. d. can sue before Philippine courts even without a license on an isolated case 90.Unless the by-laws provide otherwise, written notice of regular meetings shall be sent to all stock holders of record: a. at least one day prior to the meeting b. at least two days prior to the meeting c. at least one week prior to the meeting d. at least two weeks prior to the meeting e. At least twenty-one days prior to the meeting 91.What vote is needed to consider every decision to be a valid corporate act? a. a majority of the directors present at the meeting b. two-thirds of the directors present at the meeting c. a majority of the directors present at the meeting at which there is a quorum d. two-thirds of the directors present at the meeting at which there is a quorum 92.A condominium buyer is entitled to the issuance of the Condominium Certificate of Title as a matter of right. a. Yes, from the time he signed the Contract of Sale. b. Yes, from the time he fully paid the purchase price. c. Yes, from the time of the delivery of the condo unit. d. Yes, provided it is stated at the Master Deeds. e. All of the above 93.The borrower in a contract of loan or mutuum must pay interest to the lender. a. if there is an agreement in writing to that effect b. as a matter of course c. if the amount borrowed is very large d. if the lender so demands at the maturity date 94.Which of the following is not a common requisite to pledge and mortgage? a. Must be placed in the possession of the creditor b. Accessory contract c. Absolute owner of the property d. Property may be alienated when principal obligation becomes due for payment to the creditor 95.Servino owns a piece of land and sells it to Balingit with a right of repurchase within four (4) years from the date of sal.e If Balingit sells the property to Baduria, which of the following is false? a. The sale is valid because things subject to a resolutory condition maybe the object of a contract of sale. b. Servino can still exercise her right of redemption against Baduria. c. The sale is void because it is a conditional sale. d. Baduria acquires the property but subject to the right of conventional redemption. 96.S1 – The BOD of a Cooperative shall hold office for Three (3) years and shall hold office until their successors are duly elected an qualified, or until duly removed for caused. S2 – The members of the board of directors shall hold any other position directly involved in the day to day operation and management of the cooperative. a. Both are correct Page 14 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. b. Both are incorrect c. S1 is correct, S2 is incorrect d. S1 is incorrect, S1 is correct 97.S1 - Loss of confidence shall not be a valid ground for removal unless evidenced by acts or omission causing loss of confidence in the honesty and integrity of such BOD in a Cooperative. S2 – When a director, officer or committee member attempts to acquire or acquires, in violation of his duty, any interest or equity adverse to the cooperative in respect to any matter which has been reposed in him in confidence, he shall, as a trustee for the cooperative, be liable for damages and shall be accountable for the profits which otherwise would have accrued to the cooperative. a. Both are correct b. Both are incorrect c. S1 is correct, S2 is incorrect d. S1 is incorrect, S1 is correct 98.S1 - If a cooperative has not commenced business and its operation within two (2) years after the issuance of its certificate of registration or has not carried on its business for two (2) consecutive years, the Authority shall send a formal notice to the said cooperative to show cause as to its failure to operate. S2 – In case of voluntary dissolution where no creditors are affected in a cooperative, Resolution by the affirmative vote of at least 2/3 of all the members with voting rights, present and constituting a quorum at a meeting called for the purpose. a. Both are correct b. Both are incorrect c. S1 is correct, S2 is incorrect d. S1 is incorrect, S1 is correct 99.A cooperative may be dissolved by order of a competent court after due hearing on the grounds of, except: a. Violation of any law or regulation b. Violation of the provisions of its bylaws c. Insolvency d. In case of death or insanity of a member in a primary cooperative 100. A cooperative may be organized and registered for any or all of the following purposes, except: a. To divide the profits and losses among themselves b. To encourage thrift and savings mobilization among the members; c. To generate funds and extend credit to the members for productive and provident purposes; d. To encourage among members systematic production and marketing; e. To provide goods and services and other requirements to the members; An Indian son was watching his Indian father shoot the birds in the sky with his bow and arrow. Every time the Indian father releases his arrow, he would definitely hit the mark and hit the birds who were flying in the horizon. Out of amazement, the Indian son asked his Indian father, “Father how come you always hit the birds when you release your arrow??” The Indian father looked at his Indian son and smiled, “Son, it is because I do not aim for the birds but instead I aim for the Sun!” Moral of the story: AIM HIGHER! Strength doesn’t come from what you can do. It comes from OVERCOMING Page 15 of 16 www.teamprtc.com.ph RFBT.FPB10.21 EXCEL PROFESSIONAL SERVICES, INC. the things you once thought you couldn’t! Good luck and God bless! =) End of Examination Thank you for participating in Team PRTC Nationwide Online Final Pre-Board Examination! Page 16 of 16 www.teamprtc.com.ph RFBT.FPB10.21 REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS VILLEGAS/AGUILAR-APRADO FINAL PRE-BOARD EXAMINATION October 1, 2022 Multiple Choice. Select the letter that corresponds to the best answer. This examination consists of 100 items only. The exam is good for three (3) hours. Good luck! 1. S1 - RA 7934 aims to protect consumers against hazards to health and safety, protect consumers against deceptive, unfair and unconscionable sales acts and practices, provide information and education to facilitate sound choice and the proper exercise of rights by the consumers, provide adequate rights and means of redress. S2 - Premium pay is the amount given in case a worker does not work on his rest day. a. All are true b. All are false c. Only S1 is false d. Only S2 is false 2. Benito is the owner of an eponymous clothing brand that is a top seller. He employs a number of male and female models who wear Benito’s clothes in promotional shoots and vides. His deal with the models is that Benito will pay them with 3 sets of free clothes per week. Is this arrangement allowed? a. Yes, being in the nature of job contracting b. Yes, being an independent contractor c. Yes, being in the nature of distributorship agreement d. No, being labor only contracting e. No, their compensation require compensation in legal tender 3. Private respondent Angel Dela Cruz was terminated from employment by XBM for habitual tardiness and absenteeism after sixteen (16) years of service. An illegal termination case was filed against XBM on the ground that he was not given opportunity to be heard. XBM countered that numerous e-mail messages regarding his tardiness and absenteeism in 2011 were sent by his supervisor and that these messages constituted sufficient notice of the charges against him, an investigation was conducted thereafter and another notice was given for his dismissal. Whether the e-mail messages can be used as evidence? a. No, in case of doubt, the provisions of the Labor Code should be decided in favor of Labor b. No, he is entitled to Security of Tenure c. Yes, there is sufficient compliance with the two-notice requirement since electronic messages are legally recognized as a valid notice d. Yes, only preponderance of evidence is required to dismiss the employee e. Yes, management prerogative prevails if there is a just cause to dismiss the employee 4. S1 - Report must done within lemon law rights period i.e. ending twelve (12) months from the date of subsequent delivery after repair to the consumer, or up to twenty thousand (20,000) kilometers of operation after such delivery, whichever comes first. S2 - The 250% rate must be paid to the worker in case the worker works on a holiday and it his rest day. a. All are true c. Only S1 is false b. All are false d. Only S2 is false 5. S1 - Alternative methods of procurement is allowed in highly exceptional cases. S2 - As the owner of a business, the employer enjoys what are commonly known as management prerogatives. Among these are the right to select the persons to be hired and to discharge them for a just and valid cause; to promulgate and enforce reasonable employment rules and regulations’ to create, merge, divide, classify, and abolish departments or positions in the company’ to sell or close the business. The exercise of those rights however must always be in good faith. a. All are true b. All are false c. Only S1 is false d. Only S2 is false Page 1 of 16 6. It is a useful reference, a comprehensive and uniform checklist of requirements for the public regarding policies and procedures of government offices handling business-related transactions. a. Central Business Portal b. Citizen’s Charter c. Philippine Business Databank d. Business One-Stop Shop e. Zero Contact Policy 7. S1 - Transparency allows public involvement of qualified and eligible Civil Society Organizations (NGOs, PAs, academic Institutions and religious institutions) to observe and monitor the procurement process until contract implementation. S2 - Primary beneficiaries shall have the priority claim to death benefits over secondary beneficiaries. Whenever there are primary beneficiaries, no death benefits shall be paid to secondary beneficiaries. a. All are true b. All are false c. Only S1 is false d. Only S2 is false 8. A single common site or location, or a single online website or portal designated for the Business Permit and Licensing System (BPLS) of an LGU to receive and process applications, receive payments, and issue approved licenses, clearances, permits, or authorizations. A single facility (one-stop facilitation office) designated by the city or municipality which will house LGU offices related to zoning, business permit and licenses, and treasury as well as the Bureau of Fire Protection. a. Central Business Portal b. Citizen’s Charter c. Philippine Business Databank d. Business One-Stop Shop e. Zero Contact Policy 9. S1 - A worker below 18 should be directly under the sole responsibility of parents or guardians; work does not interfere with the child’s schooling/normal development; with work permit from DOLE. S2 - Competitive Bidding refers to a method of procurement which is open to participation by any interested party. a. All are true b. All are false c. Only S1 is false d. Only S2 is false 10. Through the Cement Manufacturers’ Association (CMA), competitors discussed various confidential business information, such as prices and quantity of production, which led to an agreement of controlling the supply of cement products in the region which led to price hikes of cement products across Philippines. In 2022, the Builders’ Association of Philippines filed a complaint against the CMA and the cement manufacturing companies involved for engaging in a cartel arrangement. What violation was committed, if any? a. Price fixing b. Bid rigging c. Sharing markets d. Limiting production e. Output restriction 11. S1 - In case of projects involving mixed procurements, the nature of the supplier, shall be determined based on the primary purpose of the contract. S2 - The New SS Law likewise made it compulsory for Overseas Filipino Workers, sea-based or land-based, to be members of the SSS as provided for under Section 9-B of R.A. No. 11199. a. All are true c. Only S1 is false b. All are false d. Only S2 is false Page 2 of 16 12. S1 - Under the SSS law, compulsory coverage of the employer shall take effect on the first day of his operation and that of the employee on the first day of his employment. S2 - Direct Contracting, otherwise known as Selective Procurement is a method of Procurement that does not require elaborate Bidding Documents because the supplier is simply asked to submit a price quotation or a pro-forma invoice together with the conditions of sale, which offer may be accepted immediately or after