1.Letters of Credit are financial devices in commercial transactionswhich will ensure that the seller of the goods is sure to be paid when he parts with the goods and the buyersof the goods upon payment. Which statement is most accurate?

a.The use of the Letter of Credit serves to reduce the risk of non-payment of the purchase price in a sale transaction.

b.The Letters of Credit can only be used exclusively in a sales transaction;

c.The Letters of Credit are issued for the benefit of the seller only;

d.(a), (b) and (c) are all correct.

2.The Anti-Money laundering Law is a law that seeks to prevent money laundering activities by providing for more transparencyin the Philippines Financial System, hence the following institutions are covered by the law, except

a.Bank and any financial institution

b.Investment Companies

c.Stock Brokers/Dealers

d.Public Utilities

3.The Bank Secrecy Law (RA 1405) prohibits disclosing any information about deposits records of an individual without court order except -

a.In an investigation for violation of Anti-Graft and Corrupt practices

b.In an investigation by the Ombudsman

c.In an Impeachment Proceedings

d.In an examination to determine gross estate of a decedent

4.Which of the following terms refers to as maker, originator, obligor or creator of security under the Securities Regulation Code?

a.Exchange

b.Investment House

c.Financing Companies

d.Issuer

5.Which of the following refers to a person engaged in the business of buying and selling securities for the account of others?

a.Dealer

b.Salesman

c.Insider

d.Broker

6.It represents a security evidenced by electronic or similar records:

a.Certificate of Stock

b.Stock and Transfer Book

c.Transfer Agent

d.Uncertificated security

7.Which of the followingsecurities refers to a contract,transactionor scheme whereby a person invest money in a common enterprise and is led to expect profits primarily from the efforts of others?

a.Investment contracts

b.Derivatives

c.Asset backed securities

d.Evidence of Indebtedness

8.A proprietary share or certificate is an evidence of interest or participation or privilege in a corporation which entitle the holder:

a.To enjoy the use of a specific property and also dividends or earnings of the corporation.

b.To enjoy only the use of specific property of the company.

c.To receive interest from the amount invested.

d.To receive redemption price on investment from securities.

9.Which of the following refers to an organized marketplace or facility that brings together buyers and sellersand execute trades of securities and/or commodities?

a.Exchange

b.Clearing House

c.Stock and Transfer Agents

d.Investment House

10.Which of the following refers to the application for the registration of securities under disclosure regimerequired to be filed and approved by the Securities and Exchange Commission before public offering of securities?

a.Registration Statement

b.Articles of Incorporation

c.Reportorial Requirements

d.Stock and Transfer Book

11.For purposes of determining violation of the provision of Anti-Money Laundering Law, a transaction is considered as a "Suspicious Transaction" with Covered Institutions" regardless of the amount involved, where which of the following circumstance exists?

a.The amount involved is not commensurate with the client's business or financial capacity;

b.There is no underlying legal or trade obligation, purpose or economic justification;

c.Client is not properly identified

d.All of the above

12.A commercial bank with two additional powers namely :(1.) the power of an investment houseand (2) the power to investin non-allied enterprises is -

a.Universal bank

b.Commercial Bank

c.Thrift Bank

d.Cooperative Bank

13.The following are the reasons why banks are required to maintain reserves against their deposits and deposit substitutes, except:

a.To control the volume of money created by the credit operations of the banking system;

b.To enable the banks to answer any withdrawal;

c.To help the government control money supply.

d.None belongs to the exception among the choices.

14.Funds obtained by a bank from the public which are relent by a bank to its own borrowers is -

a.Deposit substitutes

b.Repurchase agreements

c.Bankers' acceptances

d.Bank Deposits

15.X issued a promissory note which states, " I promise to pay Y or order Php 100,000.00 or one(1) unit Volvo Sedan." Which statement is most accurate?

a.The promissory note is negotiable because the formsof payment are clearly stated;

b.The promissory note is an invalid instrument becausethere is more than one form of payment;

c.The promissory note can be negotiated by way of delivery.

d.The promissory note is non-negotiable because the option as to which form of payment is with the maker.

16.A document made by or on behalf of the issuer, underwriter or dealer to sell or offer securities for sale to the public through a registration statement filed with the Commission is -

a.Uncertificated security

b.Certificate of Stock

c.Audited Financial Statements

d.Prospectus

17.A person who guarantees on a firm commitment and/or declared best effort basis the distribution and sale of securities of any kind by another company is -

a.Underwriter

b.Mutual Funds

c.Investment Companies

d.Lending Investors

18.A law that seeks to protect all forms of information, be it private, personal, or sensitive. It is meant to cover both natural and juridical persons involves in the processing of personal information is -

a.Bank Secrecy Law

b.Philippine Deposit Insurance Act

c.General Banking Law

d.R.A. No. 10173, otherwise known as the Data Privacy Act

19.Under Data Privacy Act, any operation or any set of operations performed upon personal information is -

a.Processing of Personal Information

b.Processing of Privilege Communication

c.Disclosure of Personal Information

d.None of the above.

20.A corporation engaged in granting loans from its own capital stock or from funds sourced from not more than nineteen (19) persons is-

a.banking institution

b.investment house

c.savings and loan association

d.lending company

21.A lending company shall be established only as:

a.One Person Corporation

b.Partnership

c.Cooperative

d.Stock Corporation

22.A corporation organizedfor the purpose of extending creditfacilities to consumers and to industrial, commercial, or agricultural enterprises, by direct lending or by discounting or factoring commercial papers or accounts receivable, or by buying and selling contracts, leases, chattel mortgages, or other evidences of indebtedness, or by financial leasing of movable as well as immovable property is -

a.Investment house

b.Savings and loan association

c.Insurance company

d.Financing company

23.Financing companies shall be organized in the form of:

a.Stock corporation

b.One Person Corporation

c.Close Corporation

d.Single Proprietorship

24.Whenever a bank is ordered closed by the Monetary Board, to be designated as receiver who shall proceed with the takeover and liquidation of the closed bank in accordance with existing law shall be:

a.Insurance Commission

b.Bangko Sentral Ng Pilipinas

c.Securities and Exchange Commission

d.Philippine Deposit Insurance Corporation

25.Which of the following statements is incorrect?

a.When a bank is closed by the Monetary Board, the receiver is authorized to adopt and implement, without need of consent of the stockholders, board of directors, creditors or depositors of the closed bank.

b.Receiver of a closed bank is empowered to represent and act for and on behalf of the closed bank;

c.Receiver of a closed bank can gather and take charge of all the assets, records and affairs of the closed bank, and administer the same for the benefit of its creditors;

d.All of the foregoing are correct.

26.Which of the following is not considered an authority of a receiver of a closed bank?

a.Collect loans and other claims of the closed bank and for this purpose, modify, compromise or restructure the terms and conditions of such loans or claims as may be deemed advantageous to the interests of the creditors of the closed bank;

b.Utilize available funds of the bank, including funds generated by the receiver from the conversion of assets to pay for reasonable costs and expenses incurred for the preservation of the assets, and liquidation of, the closed bank, without need for approval of the liquidation court;

c.Distribute the available assets of the closed bank, in cash or in kind, to its creditors in accordance with the Rules on Concurrence and Preference of Credits under the Civil Code or other laws;

d.All of the foregoing are authority of a receiver of a closed bank.

27.A cooperative may be organized and registered by:

a.at least fifteen (15) persons

b.at least five persons

c.more than fifteen persons

d.at least five and not more than fifteen persons

28.The following purposes/activities may be undertaken by cooperatives except:

a.To establish, own, lease or operate cooperative banks, cooperative wholesale and retail complexes, insurance and agricultural/industrial processing enterprises, and public markets;

b.To provide goods and services and other requirements to the members;

c.The primary objective of every cooperative is to provide goods and services to its members and thus enable them to attain increased income and savings, investments, productivity, and purchasing power and promote among them equitable distribution of net surplus through maximum utilization of economies of scale, cost-sharing and risk-sharing

d.Conducting the affairs of the cooperative for eleemosynary or charitable purposes.

29.The conduct and management of the affairs of a cooperative shall be vested in a board of directors which shall be composed of:

a.not less than five (5) nor more than fifteen (15) members elected by the general assembly for a term fixed in the bylaws but not exceeding a term of two (2) years and shall hold office until their successors are duly elected and qualified, or until duly removed.

b.not less than five (5) but could be more than fifteen (15) members elected by the general assembly for a term fixed in the bylaws but not exceeding a term of two (2) years and shall hold office until their successors are duly elected and qualified, or until duly removed.

c.At least fifteen (15) members elected by the general assembly for a term fixed in the bylaws but not exceeding a term of two (2) years and shall hold office until their successors are duly elected and qualified, or until duly removed.

d.None of the foregoing

30.X's painting of Madonna and Child was used by her motherto print some personalized gift wrapper. As part of her mother's effortto raise funds for Bantay Bata, the mother of X sold the wrapper to friends. Y,an entrepreneur, liked the paintingin the wrapperand make many copiesand sold the same through National Bookstore. Which statement is most accurate?

a.Y can use the painting for his usebecause this is not a copyrightable material.

b.Works of artneed not be copyrightedalso to get protection from the law.

c.Y can use the drawing even though not copyrightedbecause it is alreadya public propertyhaving been published already

d.X can sue Y for infringement because artistic works are protected from moment of creation.

31.In a limited partnership where there are four (4) partners:

a.All the partners must be limited partners

b.The number of limited partners must be equal to the number of general partners , that is 2:2

c.The number of limited partners must be greater than the number of general partnersthat is 3:1

d.It is enough that there is one limited partner and the rest may all be general partners.

32.A limited partner may contribute:

a.Money and/or property

b.Money and/or services

c.Property and/or services

d.Services only.

33.A limited partner shall be liable as general partner in three of the following cases. Which one is the exception?

a.When he is a general-limited partner as stated in the certificate.

b.When he takes part in the control of the business.

c.When he participates in the managementof the business.

d.When his surname which appears in the partnership name is also the surname of a general partners.

34.Which of the following omissions will make a partnership formed as limited partnership liable as a general partnership?

I.The certificate is not sworn to by all the partners.

II.The certificate is not recorded/registered with the Securities and Exchange Commission.

III.The partnership name does not include the word "Limited or Ltd., its abbreviation, in the certificate.

a.I and II

b.II and III

c.I and III

d.I, II, and III

35.A person admitted to all the rights of a limited partner who has died or has assigned his interest in the partnership is known as:

a.An ostensible partner

b.A liquidating partner

c.A substituted limited partner.

d.A general-limited partner

36.It refers to the change in the relation of the partnerscaused by any partnerceasing to be associatedin the carryingon of the business.

a.Dissolution

b.Liquidation

c.Insolvency

d.Termination

37.Josephine, Ellen, Wilma, Edith and Lydia are partners in JEWEL Company LTD. Josephine, Ellen and Wilma are general partners, Edith is a general-limited partner, while Lydia is a limited partner. Based on the foregoing information, which of the following statements is false?

a.Josephine, Ellen and Wilma may be held liable with their separate property after the exhaustion of partnership assets.

b.Edith may participate in the management of the partnership.

c.Edith may not be held liable with her separate property for partnership debts after the exhaustion of partnership assets.

d.Lydia may not be held liable with her separate property for partnership debts after the exhaustion of partnership assets.

38.Wilma, Olga and Wynona agreed to form a limited partnership with Wilma and Olgaas general partners contributing P50,000.00 each, and Wynona as limited partner contributing P100,000.00. The partnership which is to engage in the tradingof garments was named"WOW Garments Co. Limited" as indicated in the Certificate signed and sworn toby the partnersbefore a notary public. However, the certificate was not filed with the Securities and Exchange Commission. In the meantime, the partners already begun operating the business and transacting with third persons.

a.The partnership entered into by the Wilma, Olga and Wynona is void.

b.The partnership will be considered a general partnership. Accordingly, all partners will be liable with their separate propertyafter the exhaustion of partnership assets.

c.The partnership will be considereda limited partnership as indicated in its name. Only Wilma and Olga will be liable with their separate property after the exhaustionof partnership assets.

d.Wilma, Olga and Wynona will be considered separately as sole proprietors with each one having a capital equivalent to their respective contributions.

39.The following partnership contracts were presented to you for evaluation:

I.A partnership engaged in the sale of office supplies with a capital of P100,000.00 broken down into: cash P30,000.00; office supplies for sale, P50,000.00; and office equipment, P20,000.00. The agreement is in a private instrument.

II.A partnership engaged in the lease of offices spaces with a capital of P700,000.00 broken down into: land, P100,000.00; building, P500,000.00; cash P80,000.00; and office equipment , P20,000.00. The agreement is not recorded with the Securities and Exchange Commission.

III.A partnership engaged in the trading of computers whose name is "Lamont Enterprises Ltd." It has a total capital of P500,000.00 broken down into P100,000.00 cash and computers worth P400,000.00, contributed byboth general and limited partners. The agreement was subscribed and sworn to by all the partners before a notary public but not recorded with the Securities and Exchange Commission.

Based on the foregoing:

a.Each partnership has a separate juridical personality.

b.I and II have separate juridical personality.

c.II and III have juridical personality.

d.None of the partnership has a separate juridical personality.

40.Which of the following statements concerning the name of the partnership is false?

a.The partnership name may include the name of only one of the partners.

b.The partnership name may include the names of two or more, but not all the partners.

c.The partnership name may include the names of all the partners.

d.The partnership cannot adopt a name which does not include the name of at least one of the partners.

41.The following statements are presented:

Statement I: Stock corporations are allowed to create securities other than shares of stock to raise capital from the public.

Statement II: Nonstock corporations like stock corporations are allowed to create bonded indebtedness.

If you will consider the foregoing statements:

a.Statements I and II are correct.

b.Statements I and II are incorrect.

c.Statement I is correct, and Statement II is incorrect.

d.Statement I is incorrect. and Statement II is correct.

42.Statement I. - On dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is terminated.

Statement II. - Dissolution does not automatically resultin the termination of the legal personality of the partnership.

a.Statement I is correct, and Statement II is incorrect.

b.Statement I is incorrect, and Statement II is correct.

c.Both Statements I and II are correct.

d.Both Statements I and II are incorrect.

43.Statement I: The members' right to vote in nonstock corporations may be broadened, limited or denied in the articles of incorporation or bylaws.

Statement II: The provisions governing stock corporations, when pertinent shall be applicable to nonstock corporations, except as may be covered by specific provisions of the Revised Corporation Code for nonstock corporation.

a.Statements I and II are correct.

b.Statements I and II are incorrect.

c.Statement I is correct, and Statement II is incorrect.

d.Statement I is incorrect, and Statement II is correct.

44.Consideration for the issuance of stock may be:

a.Promissory note

b.Letters of credit

c.Convertible bonds

d.Future services

45.Which of the following entities can be incorporated as a close corporation?

a)Stock exchanges

b)Insurance companies

c)Public utilities

d)Manufacturing companies

46.The Articles of Incorporation of a close corporation may provide for except:

a)A classification of shares or rights, the qualifications for owning or holding the same, and restrictions on their transfers.

b)A classification of directors into one (1) or more classes, each of whom may be voted for and elected solely by a particular class of stock.

c)Greater quorum or voting requirement in meetings of stockholders or directors than those provided in the RCC.

d)That it shall make any public offering of its stocks of any class if necessitated by the company.

47.The following business activities cannot be carried on through close corporation except:

a)Domestic air transport business

b)Domestic shipping business

c)Land transport business

d)Recruitment agency business

48.The following statements are correct relating to close corporations except:

a)Preemptive right of stockholders in a close corporation does not extend to issuance of shares in exchange for a property.

b)Preemptive right of stockholders in a close corporation extends to reissuance of treasury shares.

c)Preemptive rights of stockholders in a close corporation extends to issuance of shares in exchange for previously incurred indebtedness.

d)All of the foregoing statements are correct.

49.The following shall be the effect of a close corporation that is being managed by the stockholders except:

a)No meeting of stockholders needs to be called to elect directors.

b)The stockholders shall be deemed directors.

c)The stockholders shall be liable as directors.

d)Selected class of stockholders shall manage the close corporation.

50.When shares of stock are issued not in exchange for its equivalent value either in cash, property, shares of stocks, stock dividend or services is called -

a)Certificate of Stock

b)Watered Stock

c)Shares of Stock

d)Delinquent Stock