No. 125 Brgy.

San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

iCARE Accountancy Review
st
1 Open Preboard Examination, Batch 3

INSTRUCTIONS: Choose the best answer among the given choices. Policies on academic
honesty are strictly enforced.

1. D orally borrowed P1,000 cash from C evidenced with conventional interest of

1% per month. In order to secure the said loan, P orally pledged and delivered
the cellphone of D to C. Aside from that, G orally guaranteed the contract of loan
of D to C. Among the agreements entered into, which is valid?
a. Contract of loan and contract of guaranty
b. Contract of loan and contract of pledge
c. Contract of guaranty and agreement to pay interest
d. Contract of pledge and contract of guaranty

2. A, B and C wrote a promissory note which states “I promise to pay P60,000 to D

and E.” At the maturity date of the note, E indorsed back the promissory note to
C. Afterwards, B become insolvent. How much may C collect from A?
a. P10,000
b. P20,000
c. P15,000
d. P30,000

3. D borrowed P10,000 cash from C. At the maturity date of the loan, C accepted
D’s laptop as payment for the loan. The said laptop has historical cost of P9,000
with accumulated depreciation of P2,000 while its fair market value is P8,000. In
the absence of contrary agreement, how much obligation of D is extinguishment
by this special mode of payment?
a. P7,000
b. P8,000
c. P9,000
d. P10,000

4. P orally authorized A to sell his land at a selling price of P100,000. A orally sold
the said land to B, a minor, at a price of P95,000. The said buyer gave P5,000
earnest money to A. What is the status of the contract of sale of land?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

5. D borrowed P3,000 cash from C evidenced by a promissory note. In order to

secure the said loan, D pledged and delivered his specific watch to C. At the
maturity date of the loan, D defaulted in the payment of the loan. This prompted
C to sell in public auction the pledged watch which resulted to net proceeds of
P2,500. Which contract is extinguished?
a. Contract of loan
b. Contract of pledge
c. Both a and b
d. Neither a nor b

1|P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

6. On January 1, 2021, S sold and delivered a 100-square meter lot to B at a selling

price of P1,000 per square meter. On July 1, 2021, B discovered that the actual
area is only 91 square meter. What legal remedy is available to B?
a. Action quanti minoris or proportionate reduction of price
b. Action for cancellation of sale
c. Either a or b
d. Neither a nor b

7. S sold a specific car to B at an installment price of P1,000,000 payable in ten

equal annual installments starting on December 31, 2021. In order to secure the
payment of the price, B and S entered into a contract of chattel mortgage over
the said car. After religiously paying four annual installments, B defaulted on the
annual installment due on December 31, 2025. What legal remedy is available to
S?
a. File an action for exact fulfillment
b. Cancel the contract of sale
c. Foreclose the chattel mortgage constituted on the car
d. Any of the above

8. Dao Ming Si is the employee driver of Shan Cai. While transporting his boss, Dao
accidentally bumped RM, a pedestrian crossing the road. What is the source of
civil obligation of Shan Cai to RM?
a. Contract
b. Culpa aquiliana
c. Solutio indebiti
d. Negotiorum gestio

9. D, a resident of Lipa City, has an obligation to deliver a car with plate number of
ABC-123 to C, a resident of Batangas City. At the time of constitution of the
obligation, the said car is located in Calaca City while at the time of date of
delivery, the said car is located in Tanauan City. Where shall the said car be
delivered?
a. Lipa City
b. Batangas City
c. Calaca City
d. Tanauan City

10. In which type of accessory contract is right of redemption available to the

mortgagor in case of extrajudicial foreclosure?
a. Contract of pledge
b. Contract of real estate mortgage
c. Contract of chattel mortgage
d. All of the above

11. What is the prescriptive period available to the buyer to file a civil action
regarding sale of animal with redhibitory defect?
a. 3 days from the date of delivery
b. 40 days from the date of delivery
c. 6 months from the date of delivery
d. 1 year from the date of delivery

2|P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

12. A, B, C and D wrote a promissory note which states “We promise to pay P12,000
to E, F or G, solidary creditors.” A voluntarily paid P12,000 to E without the
knowledge of B, C and D. How much may A ask for reimbursement from B?
a. P1,000
b. P2,000
c. P3,000
d. P4,000

13. D borrowed P100,000 cash from C. Despite repeated demands from C on or after
maturity date of the loan, D refused to pay the obligation. This prompted C to
file a civil action to collect a sum of money against D before the trial court which
ruled in favor of C. Upon the motion of C, the trial court issued a writ of
attachment to execute the judgment debt. The sheriff attached the specific
laptop of D. This prompted D to sell the said laptop to B. Aside from that, D sold
his specific cellphone to A. Which contract of sale is rescissible?
a. Contract of sale of specific cellphone to A
b. Contract of sale of specific laptop to B
c. Both a and b
d. Neither a nor b

14. Which of the following obligations is immediately demandable?

a. Obligation in diem
b. Obligation ex die
c. Obligation when debtor’s means permits him to do so
d. Obligation with a suspensive condition

15. Which of the following is not necessary for the perfection of the contract of sale?
a. Meeting of minds between the buyer and seller
b. Delivery of the subject matter
c. Determinate thing
d. Price certain in money or its equivalent

16. Which type of obligation may be compelled by civil action for specific
performance in case the debtor defaulted in the performance of obligation?
a. Real obligation
b. Personal obligation
c. Both a and b
d. Neither a nor b

17. Which of the following documents may become the subject matter of reformation
of instrument?
a. Notarial last will and testament
b. Holographic last will and testament
c. Donation inter vivos wherein a simple condition is imposed
d. When the real agreement is void

18. Which of the following executory contracts is covered by statute of fraud?

a. Contract of lease of personal property for a period of two years with P500
monthly rental
b. Contract for a piece of work of a furniture at a contract price of P500
c. Contract of subscription of shares of stocks at subscription price of P500
d. Contract of guaranty securing a loan with a principal amount of P500

3|P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

19. Which of the following instances will not create a rebuttable presumption that
the sale with a right to repurchase is an equitable mortgage?
a. When the price of a sale with right to repurchase is inadequate
b. When the vendor remains in possession as lessee or otherwise
c. When the purchaser retains for himself a part of the purchase price
d. When the vendor binds himself to pay the taxes on the thing sold

20. How shall the incidental circumstances of a contract of sale be interpreted?

a. In favor of least transmission of rights
b. In favor of greatest reciprocity of interests
c. In favor of least reciprocity of interests
d. In favor of greatest transmission of rights

21. What is the legal remedy available to the injured party in an absolutely simulated
contract?
a. Action for reformation of instrument
b. Action for annulment of contract
c. Action for rescission of contract
d. Action for declaration of nullity of contract

22. D borrowed P100,000 cash from C. In order to secure the loan, G executed a
written contract of guaranty. Aside from that, M mortgaged his specific land to C.
At the maturity date of the loan, T paid P120,000 to C. Which of the following
statements is correct?
a. T may foreclose the mortgage on M’s land.
b. T may go after G in case D refuses to reimburse T.
c. T may collect P100,000 from D.
d. T may ask for reimbursement from D in the amount of P120,000.

23. S sold a double dead meat to B. Afterwards, B cooked the meat and sold the dish
to C who was hospitalized because of the dead meat. What principle of contract
will be infringed if C will file an action for damages directly against S?
a. Mutuality of contract
b. Relativity of contract
c. Autonomy of contract
d. Legality of contract

24. S sold a mass of black pepper stored in his specific warehouse at a price of
P100,000 to B. S gave the key of such warehouse to B. What type of
constructive delivery of the mass of black pepper is done by S?
a. Traditio clavium
b. Traditio brevi manu
c. Traditio constitutum possessorium
d. Traditio longa manu

25. What is the prescriptive period of filing civil action based on solutio indebiti?
a. Four years
b. Five years
c. Six years
d. Ten years

4|P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

26. Which of the following obligations may become the subject matter of legal
compensation?
a. Obligation of a depositary in a contract of deposit
b. Obligation of a bailee in a contract of commodatum
c. Obligation of a person arising from crime
d. Obligation of a borrower in a contract of mutuum

27. In which type of novation involving the change of a debtor may the insolvency of
a new debtor result to liability on the part of original debtor?
a. Expromission
b. Delegacion
c. Both a and b
d. Neither a nor b

28. It refers to the right of an unpaid creditor to ask for the cancellation of contracts
entered by the debtor to defraud the creditor.
a. Accion directa
b. Accion pauliana
c. Accion subrogatoria
d. Accion reindivicatoria

29. In which type of waiver of warranty against eviction is the seller still liable in
case of eviction?
a. Waiver consciente
b. Waiver intentionada
c. Waiver whereby the buyer acted in bad faith
d. Waiver whereby the seller acted in good faith

30. In case of double sale of personal property, who among the buyers shall be
preferred?
a. Buyer with the oldest title
b. First registrant of the deed of sale in good faith
c. First payor in good faith
d. First possessor in good faith

31. Which mode of extinguishment of obligation is essentially gratuitous and requires

acceptance by the debtor?
a. Novation
b. Merger
c. Remission
d. Compensation

32. What law shall govern dacion en pago as a special mode of payment?
a. Financial Rehabilitation and Insolvency Act of 2010
b. Law on Sales
c. Law on Obligation
d. Law on Pledge

33. In which type of accessory contract is the secured creditor not allowed to recover
deficiency from the foreclosure sale of the collateral?
a. Contract of pledge
b. Contract of chattel mortgage
c. Contract of real estate mortgage

5|P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

d. None of the above

34. Which of the following is allowed to become the subject matter of contract of
chattel mortgage?
a. Condominium unit
b. Shares of stocks of real estate company
c. Agricultural land
d. House and lot

35. It is an obligation which has an accessory undertaking to assume greater liability

in case of breach.
a. Obligation with a condition
b. Obligation with a period
c. Obligation with a penal clause
d. Obligation with an accessory contract

36. Which of the following contracts must be in a public instrument to be valid and
enforceable?
a. Contract of sale of land by an agent in the name of the principal
b. Contract of lease of real property for a period longer than one year
c. Contract of antichresis over an agricultural land
d. Contract of donation of house and lot

37. Which type of accessory contract is not allowed to secure future obligations?
a. Contract of pledge
b. Contract of chattel mortgage
c. Contract of real estate mortgage
d. None of the above

38. What is the operative act that transfers ownership from the seller to the buyer in
a contract of sale?
a. Meeting of minds
b. Full payment of the price
c. Delivery
d. Registration of certificate of title

39. Which of the following is allowed to become the subject matter of a contract of
sale?
a. Patrimonial property of the state
b. Future inheritance
c. Vain hope
d. National park

40. Which of the following is not an implied warranty of assignor in contract of

assignment of credit?
a. Existence of credit
b. Solvency of debtor
c. Legality of debt
d. None of the above

41. Which of the following is not a valid defense in a solidary obligation?

a. Prescription
b. Illegality of consideration

6|P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

c. Incapacity of co-solidary debtor

d. Insolvency of co-solidary debtor

42. S obliged himself to deliver a specific laptop to B while B obliged himself to

deliver a specific cellphone worth P10,000 and P10,000 cash to S. What contract
is entered by S and B?
a. Contract of sale
b. Contract for a piece of work
c. Contract of barter
d. Contract of lease

43. T surreptitiously stole the brand new cellphone of O. Afterwards, T sold the said
stolen cellphone to MCStore, an authorized dealer of brand new phones. B
purchased the said cellphone from MCStore at a price of P50,000. Which of the
following statements is correct?
a. The contract of sale of cellphone from MCStore to B is void.
b. O may legally recover the cellphone from B with obligation to reimburse B
in the amount of P50,000.
c. B obtained a good title over the cellphone.
d. O may legally recover the cellphone from B without any obligation to
reimburse B.

44. Which of the following contracts is generally perfected by mere consent?

a. Contract of sale of building
b. Contract of donation of car worth P100,000
c. Contract of antichresis involving an agricultural land
d. Contract of pledge of laptop

45. Which of the following obligations may be legally compensated?

a. Void obligation
b. Unenforceable obligation
c. Voidable obligation
d. None of the above

46. Which of the following contracts may be validly assailed by a third person?
a. Rescissible contract
b. Voidable contract
c. Unenforceable contract
d. None of the above

47. Which of the following obligations may not be secured by accessory contracts?
a. Void obligation
b. Natural obligation
c. Unenforceable obligation
d. All of the above

48. M, a minor, orally sold a specific cellphone to B, an insane during the lucid
interval of the latter at a price of P10,000. Arras money amounting to P500 was
paid by B to M at the date of perfection of contract of sale. What is the legal
remedy available to the proper party?
a. Action for reformation of instrument
b. Action for annulment of contract
c. Action for declaration of nullity of contract

7|P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

d. None of the above

49. What is the ground provided by law when the unpaid seller exercises right of
stoppage in transitu?
a. When the goods sold are perishable
b. When the contract of sale has no credit term
c. When the buyer becomes insolvent
d. When the credit term has expired

50. Which of the following instances will not make an obligation with a suspensive
period due and demandable?
a. When the debtor attempts to abscond
b. When through a fortuitous event the guaranties or securities after their
establishment were impaired, unless the debtor immediately gives new
one equally satisfactory
c. When the debtor does not furnish to the creditor the guaranties or
securities which he has promised
d. When the debtor violates any undertaking, in consideration of which the
creditor agreed to the period

51. Under Maceda Law, which right is available to buyer of residential real properties
in installments when he has paid total installments less than two years?
a. Right to grace period
b. Right to cash surrender value
c. Both a and b
d. Neither a nor b

52. The service compensated is the cause in which type of contract?

a. Onerous contract
b. Gratuitous contract
c. Remuneratory contract
d. Commutative contract

53. It refers to the juridical tie that binds the parties to the obligation.
a. Obligor
b. Obligee
c. Prestation
d. Vinculum

54. What is the nature of contract of pledge or mortgage?

a. It is an indivisible contract if the contract of loan is solidary.
b. It is a divisible contract if the contract of loan is joint.
c. It is a divisible contract whether the contract of loan is joint or solidary.
d. It is an indivisible contract whether the contract of loan is joint or solidary.

55. In a contract of mortgage, who is entitled to excess arising from the foreclosure
sale of collateral?
a. Always mortgagor
b. Always mortgagee
c. Generally mortgagor unless expressly granted to mortgagee
d. Generally mortgagee unless expressly granted to mortgagor

8|P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

56. In a facultative obligation, who has the right of choice as to the prestation?
a. Always obligor
b. Always oblige
c. Generally obligor unless granted to obligee
d. Generally obligee unless granted to obligor

57. In Pacto De Retro Sale of real property, what is the default period for the
exercise of right of repurchase?
a. Four years
b. Ten years
c. Thirty days
d. Six months

58. In case the purchased animal dies of disease, which of the following is not an
essential requisite for the seller to be liable?
a. The animal dies within 3 days from the date of purchase.
b. The disease is redhibitory.
c. The disease exists at the time of sale.
d. The disease is the cause of death of animal.

59. In case of breach of warranty against hidden defect, it refers to the legal remedy
available to the buyer whereby he is asking for proportionate reduction of price.
a. Accion redhibitoria
b. Accion pauliana
c. Accion subrogatoria
d. Accion quanti minoris

60. It refers to a type of damages awarded by the court in order to set an illustration
for public good.
a. Moral damages
b. Nominal damages
c. Exemplary damages
d. Temperate damages

61. In which type of obligation are the co-debtors considered indispensable parties
for the suit to prosper?
a. Joint divisible obligation
b. Joint indivisible obligation
c. Solidary divisible obligation
d. Solidary indivisible obligation

62. In which type of delay is consignation the proper remedy to the injured party?
a. Mora solvendi
b. Mora accipiendi
c. Mora obligori
d. Compensatio morae

63. Who has the right of application of payment?

a. Always obligor
b. Always oblige
c. Generally obligor in the absence of contrary agreement
d. Generally obligee in the absence of contrary agreement

9|P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

64. In which source of obligation is consent not necessary?

a. Quasi-delict
b. Quasi-contract
c. Neither a nor b
d. Both a and b

65. S normally or publicly manufactures or produces an item based on the special

request or customized designed provided by its client. What contract is normally
entered into by S?
a. Contract for a piece of work
b. Contract to sell
c. Contract of sale
d. Contract of barter

66. S sold a specific right to B at a price of P10,000. B paid P2,000 arras at the time
of perfection of contract. At the maturity date of the payment of the price, how
much must B pay to S?
a. P10,000
b. P8,000
c. P2,000
d. P12,000

67. Who shall be entitled to the fruits of the personal property covered by the
contract of pledge?
a. Pledgor
b. Pledgee
c. Pledgor and pledgee equally
d. State

68. What theory is being followed by the New Civil Code of the Philippines in
determining the exact moment of perfection of contract when the acceptance is
made through telegram?
a. Reception theory
b. Manifestation theory
c. Cognitive theory
d. Expedition theory

69. Which of the following is a proper ground for reformation of instrument?

a. When a mutual mistake of the parties results to the failure of the
instrument to disclose their real agreement
b. When the consent of one of the parties in the contract is vitiated by fraud,
undue influence, mistake, intimidation or violence
c. If mistake, fraud, inequitable conduct, or accident has prevented a
meeting of the minds of the parties
d. When the consent of the contracting parties is absolutely simulated

70. Which of the following innominate contracts means "Du ut facias"?

a. I give that you may give.
b. I give that you may do.
c. I do that you may give.
d. I do that you may do.

10 | P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

71. W and H are legally married under property regime of absolute community. W
orally sold his specific laptop to H at a price of P500 when its book value is still
P800 after H pointed a gun to W. Delivery and payment will happen after two
years. What is the status of contract of sale of the specific laptop between W and
H?
a. Unenforceable
b. Void
c. Voidable
d. Rescissible

72. M issued a promissory note payable to P in the amount of P10,000. P generally

indorsed and delivered the note to A. A assigned and delivered the note to M.
What mode of extinguishing obligation is present in this case?
a. Compensation
b. Novation
c. Remission
d. Merger

73. Which of the following statements concerning the vendor’s liability for hidden
defect is correct?
a. The vendor is liable only if the reason of the loss of the thing with hidden
defect is the hidden defect.
b. The vendor is liable only if he was aware of the hidden defect.
c. The vendor is not liable for the hidden defect if the loss is due to
fortuitous event or fault of the vendee.
d. The vendor is liable even he was not aware of the hidden defect.

74. As a general rule, which of the following is not a requisite of an action for
damages on the basis of quasi-delict?
a. There is pre-existing relation between the offender and offended parties.
b. There exists a wrongful act or omission imputable to the defendant by
reason of his fault or negligence.
c. There exists a damage or injury which must be proved by the person
claiming recovery.
d. There must be a direct causal connection or a relation of cause and effect
between the fault or negligence and the damage or injury, or that the
fault or negligence be the cause of the damage or injury.

75. and B orally entered into a contract of sale of a specific authentic Coach bag at a
price of P10,000. A paid an arras money amounting to P500 at the time of
constitution of the contract. The parties agreed that the balance of the price will
be paid after one month while the said bag will delivered after one week. At the
agreed date of delivery of the bag, B delivered a counterfeited coach bag. What
is the best legal remedy available to A?
a. File an action for damages for breach of contract of sale.
b. File an action for annulment of voidable contract of sale.
c. File an action for declaration of nullity of void contract of sale.
d. He has no action because the contract of sale is unenforceable.

76. A stole the specific cellphone of B. Afterwards, A sold at a price of P10,000 the
said specific cellphone to C who acquired the said item in good faith and for
value. Which of the following statements is correct?
a. B may recover the said cellphone from C even without reimbursing C.

11 | P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

b. B may recover the said cellphone from C but with obligation to reimburse
P10,000.
c. C obtains good title over the cellphone because he is a purchaser for value
and in good faith.
d. C obtains a voidable title over the cellphone which is valid and binding
until annulled.

77. On January 1, S delivered a specific laptop to B under a sale or return

arrangement. S gave B up to April 1 to return the specific laptop. On March 1,
the specific laptop was destroyed by fire without B’s fault. Which of the following
is correct?
a. B is not required to pay the price of the laptop because the obligation is
extinguished by fortuitous event.
b. S is still the owner of the specific laptop since B has not yet signified his
approval or satisfaction of the said item.
c. B will become owner of the specific laptop only upon full payment of the
price.
d. S can collect the price even if the loss is without B’s fault.

78. D is indebted in the amount of P100,000 to C as evidenced by a written contract

of loan. The contract provides for 6% interest per annum and 10% penalty in
case of breach of contract. At the date of maturity of the loan, D defaulted.
Which of the following statements is correct?
a. C may only demand payment of the 6% interest in addition to the
principal because the law presumes that the interest already covers the
penalty.
b. C may only demand payment of the 10% penalty in addition to the
principal because in obligation with penal clause, the penalty substitutes
for the interest and damages.
c. C may demand payment of both 6% interest and 10% penalty in addition
to the principal only if he can prove that D acted fraudulently.
d. C may validly demand payment of both 6% interest and 10% penalty in
addition to the principal.

79. Which of the following statements concerning the characteristics of different

types of contract is correct?
a. Contract of loan is a consensual contract because it is perfected by mere
consent on the amount of consumable thing to be delivered.
b. Contract of sales is a real contract because the delivery of the determinate
thing is necessary for the transfer of ownership to the buyer.
c. Contract of real estate mortgage is a principal contract because it is
extinguished when the contract of loan is settled.
d. Contract of agency is a preparatory contract because it is a means by
which other contracts may be entered into.

80. D borrowed P10,000 cash from C. They agreed that D will pay C when his means
permits him to do so. What is the classification of this obligation?
a. Obligation with a suspensive condition
b. Obligation with a resolutory condition
c. Obligation ex die
d. Obligation in diem

12 | P a g e RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

81. Minor, a ward, sold in writing the cellphone of his father, his legal guardian, to an
insane, during the latter’s lucid interval at a price of P10,000 when the cellphone’s
book value is still P15,000 resulting to lesion more than ¼ the value of the thing
sold. What is the status of the contract of sale?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

82. DLSU-Manila, a nonstock nonprofit organization, voluntarily paid real property tax
to City of Manila for all its land, building and improvement including those actually,
directly and exclusively used for educational purposes. DLSU-Manila filed a formal
written claim for refund before City of Manila on the real property taxes it paid for
those land, building and improvement actually, directly and exclusively used for
educational purposes. What is the source of obligation of City of Manila to
reimburse DLSU-Manila for excessive payment of real property taxes?
a. Culpa acquiliana
b. Solutio indibiti
c. Negotiorum gestio
d. Mora solvendi

83. On January 1, 2020, D borrowed P100,000 from C with maturity date on July 1,
2020. C send a demand letter to D on April 1, 2020 to extrajudicially ask for the
payment of the loan. When will the legal interest on the loan start to accrue?
a. January 1, 2020
b. April 1, 2020
c. July 1, 2020
d. None of the above

84. On January 1, 2020, S orally sold a specific laptop to B at a price of P50,000 with
delivery to be made on February 1, 2020 and payment of the price to be made on
March 1, 2020. On February 1, 2020, S refuses to deliver the laptop despite
repeated demands from B. What is the legal remedy available to B?
a. File an action for exact fulfillment plus damages by reason of delay
b. File an action for rescission of contract of sale plus damages for breach of
contract
c. File an action to compel S to execute and sign the deed of sale evidencing
their agreement
d. None of the above

85. The contract of lease provides that the lessee may continue to occupy the leased
property as long as he can pay a reasonable rental despite the expiration of lease
term. What principle of contract is mainly violated by this stipulation?
a. Mutuality of contract
b. Relativity of contract
c. Autonomy of contract
d. Clarity of contract

86. D borrowed P10,000 from C whereby D delivered and pledged his specific watch
to C to secure the payment of the loan. Aside from that, G guaranteed in writing
the loan of D. At the maturity date of the loan, C voluntarily returned the said
watch to D. Which contract is/are extinguished by the return of the watch?
a. Contract of pledge only

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b. Contract of pledge and contract of guaranty only

c. Contract of pledge and contract of loan only
d. Contract of pledge, contract of guaranty and contract of loan

87. On January 1, 2020, D, a resident of Manila City obliged himself to deliver a 2020
TRD Limited Edition Fortuner to C, a resident of Caloocan City. The maturity date
of obligation is on June 30, 2020. On January 1, 2020, a 2020 TRD Limited Edition
Fortuner is located in Quezon City but another 2020 TRD Limited Edition Fortuner
is located in Pasay City. Where the car be delivered by D to C?
a. Manila City
b. Caloocan City
c. Quezon City
d. Pasay City

88. D borrowed P10,000 from C. On the date of maturity of the loan, D defaulted on
the payment which prompted C to send a demand letter prepared by a law firm
threatening that if D will not sign the proposed deed of loan with real estate
mortgage involving D’s specific lot, C will file the necessary civil action against D.
As a result of the intimidation, D signed the deed of loan with real estate mortgage.
What legal remedy is available to D involving the contract of loan with mortgage
over his specific lot?
a. File an action for annulment of contract
b. File an action for reformation of instrument
c. File an action for declaration of nullity
d. None of the above

89. D is under obligation to deliver a specific cellphone or a specific laptop or a specific

tablet to C. Before the maturity date of the obligation, D intentionally destroyed
specific tablet. Afterwards, a fortuitous event caused the loss of the specific
cellphone. On the maturity date of the obligation, the specific laptop was lost due
to the negligence of D. What is the basis of liability of D for damages?
a. Value of the specific laptop
b. Either the value of specific tablet or specific laptop
c. Value of any of the object
d. Object with the highest value

90. A borrowed P20,000 cash from B with maturity date on July 1, 2020. On July 1,
2020, B was convicted by final judgment with a crime of acts of lasciviousness
committed against A who was entitled to receive nominal and moral damages
totaling P20,000. Which is correct?
a. A may enforceably collect P20,000 from B.
b. B may enforceably collect P20,000 from A.
c. Both A and B may collect P20,000 from each other.
d. Neither A nor B may collect P20,000 from each other.

91. S, a heavily indebted but solvent person, orally sold his specific condominium unit
to B at a price of P1,000,000. At the date of oral agreement, B paid P50,000 arras
money. Their oral agreement provides that delivery will of the unit will be done
after 15 months. What is the status of contract of sale?
a. Valid and binding
b. Rescissible
c. Voidable
d. Unenforceable

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92. S sold a counterfeited G-Shock watch to B who paid a faked money. Which of the
following statements is correct?
a. Only S may file an action to collect a sum of money against B for the price
of the G-Shock.
b. Only B may file an action for exact fulfillment plus damages against S for
breach of implied warranty of authenticity.
c. Neither S nor B may file an action against each other.
d. Both S and B may file an action against each other.

93. S orally authorized B to sell his specific house at a price of P1,000,000. B orally
sold the said house to V in the name of S at a price of P1,500,000 when its cost
to S is actually P2,500,000, thereby, S suffered lesion by more than ¼ the value
of the house. Payment of the price and delivery of the house will happen after one
month after the date of agreement. What is the legal remedy available to the
injured party?
a. File an action for annulment of contract
b. File an action for declaration of nullity of contract
c. File an action for rescission of contract
d. None of the above

94. When is prior valid tender of payment mandatory for consignation to be justifiable?
a. When two or more persons claim the same right to collect the subject
matter of the obligation
b. When, with legal cause, the creditor refuses to give a receipt
c. When the creditor is insane at the time the payment is due
d. When the certificate evidencing the credit has been lost

95. On January 1, 2020, D obliged himself to deliver a specific car to C with maturity
date on July 1, 2020. On August 1, 2020, the said car was forcibly taken by robbers
who employed force and intimidation against D. Is the obligation of D
extinguished?
a. Yes because no one is liable for fortuitous event.
b. Yes because the subject matter is a generic thing.
c. No because the loss occurred after D incurred delay.
d. No because robbery is not a fortuitous since it is not an Act of God.

96. What is the rebuttable presumption of place of perfection of contract entered into
through letter, telegram or telephone?
a. In the place where the offer was made
b. In the place where the acceptance was made
c. Domicile of offerer
d. Domicile of acceptor

97. It refers to the damages stipulated in an obligation with a penal clause.

a. Exemplary damages
b. Compensatory damages
c. Liquidated damages
d. Temperate damages

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98. Which of the following contracts is valid and binding?

a. Relatively simulated contract
b. Contract where the intention of the parties relative to the principal contract
cannot be ascertained
c. Oral executory contract covered by Statute of Fraud
d. Illegal per se contract

99. Which action will prescribe in four (4) years?

a. Action for annulment of contract
b. Action for rescission of contract
c. Both A and B
d. Neither A nor B

100. In obligation to deliver a specific thing, when does the creditor obtain
personal right over the fruits of the determinative thing?
a. From the time of perfection of obligation
b. From the time the obligation to deliver the determinate thing arises
c. From the time the determinate thing is actually or constructively delivered
to the creditor
d. From the time the fruits of the determinate thing are actually or
constructively deliver to the creditor

-Nothing Follows-

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RFBT First Preboard Examinations – ANSWER KEY

iCARE Accountancy Review
st
1 Open Preboard Examination, Batch 3

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

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