Mercantile Law

Question 1

1. Which of the following statements relative to the R.A. NO. 1508, as amended, otherwise known as the Chattel Mortgage Law, is false?
   a. Registration of the chattel mortgage is made in the Chattel Mortgage Registry of the
   Register of Deeds where the property is located.
   b. Aside from the Chattel Mortgage Registry of the Register of Deeds where the property is
   located, registration shall also be made where the mortgagor resides if he resides in a place
   other than where the property is located.
   c. Where the parties executed a chattel mortgage on a building, they shall be bound to the chattel mortgage contract.
   d. Failure to execute the Affidavit of Good Faith and to register the chattel mortgage contract shall invalidate the mortgage.

Answer 1

d. Failure to execute the Affidavit of Good Faith and to register the chattel mortgage contract shall invalidate the mortgage.

Question 2

2. To bind third persons, the chattel mortgage executed on a private motor vehicle must be
   registered with the:
   a. Chattel Mortgage Registry
   b. Land Transportation Office
   c. Both (a) and (b)
   d. Neither (a) nor (b)

Answer 2

c. Both (a) and (b)

Question 3

3. Which of the following statements relative to R.A. No. 3135, otherwise known as the Real Estate Mortgage Law, on real estate mortgage is true?
   a. The 1-year redemption period is interrupted by the filing of an action questioning the validity of the foreclosure sale.
   b. The mortgagee can recover any deficiency in the foreclosure sale but any excess
   or surplus shall be given to the mortgagor.
   c. A writ of possession shall be issued in favor of the purchaser in an extra-judicial foreclosure sale even if there is a registered lease contract between the mortgagor-lessor and the lessee.
   d. The purchaser at the extra-judicial foreclosure sale who took possession of the property without the benefit of a writ of possession cannot be ejected by the mortgagor.

Answer 3

b. The mortgagee can recover any deficiency in the foreclosure sale but any excess
or surplus shall be given to the mortgagor.

Question 4

4. The mortgagor of a property that is the subject of an extra-judicial foreclosure sale resides in Gingoog City. The property is located in Cagayan de Oro City. The mortgage contract provided that any action arising from the mortgage shall be filed in Iligan City. The foreclosure sale shall be held in;
   a. Gingoog City
   b. Cagayan de Oro City
   c. Iligan City
   d. Any of the foregoing

Answer 4

b. Cagayan de Oro City

Question 5

5. PQR Corporation obtained a loan from QRS Bank secured by a real estate mortgage on his land. PQR Corporation defaulted payment, and so the mortgage was foreclosed and the land was sold at public auction.
   The redemption period available to PQR Corporation is:
   a. Within three(3) months from the date of the auction sale.
   b. Within one(1) year from the date of the auction sale.
   c. Until the registration of the certificate of foreclosure sale with the Register of
   Deeds, but in no case exceeding three(3) months.
   d. Until the registration of the certificate of foreclosure sale with Register of Deeds,but in no case exceeding one (1) year.

Answer 5

c. Until the registration of the certificate of foreclosure sale with the Register of
Deeds, but in no case exceeding three(3) months.

Question 6

6. Article 1484 of the Civil Code (Recto Law) which prohibits the vendor from recovering any deficiency in the foreclosure sale, applies where:
   a. The object of the chattel mortgage is not the thing sold.
   b. The personal property is sold on a straight-term.
   c. Both (a) and (b).
   d. Neither (a)nor (b).

Answer 6

d. Neither (a)nor (b).

Question 7

7. Which of the following statements relative to the sale of personal property installment under Article 1484 of the Civil Code (Recto Law) is false?
   a. The remedy of exacting fulfillment of the obligation can be availed of only where
   one (1) installment is not paid.
   b. Cancellation of the sale can only be made after default of at least two (2) installments.
   c. An agreement for the recovery of any unpaid balance of the purchase price after electing to
   foreclose the chattel mortgage on the thing sold is null and void.
   d. The three remedies under Article 1484 of the Civil Code are alternative and cannot be
   exercised simultaneously or successively.

Answer 7

a. The remedy of exacting fulfillment of the obligation can be availed of only where
one (1) installment is not paid.

Question 8

8. B purchased a motor vehicle from S for P1,200,000, payable by a downpayment of P600,000 and the balance in 12 equal monthly installments of P50,000 each. A chattel mortgage on the vehicle was executed to serve as security. B defaulted on the 7th and 8th monthly installments. The chattel mortgage was foreclosed but the auction sale resulted into a deficiency of P100,000. Under R.A. No. 1508, as amended, otherwise known as the Chattel Mortgage Law, in relation to
   Article 1484 of the Civil code, more popularly known as the Recto Law, what is the remedy of S to recover the deficiency
   a. Auction the other properties of B for P100,000.
   b. Cancel the installment sale.
   c. File a collection suit for P100,000 against B.
   d. No other remedy on the deficiency.

Answer 8

d. No other remedy on the deficiency.

Question 9

9. Assume the same facts in Q. 9, except that in addition to the chattel mortgage on the motor
   vehicle, a real estate mortgage was executed as additional security by (guarantor) on his land.
   What is the remedy of S to recover the deficiency?
   a. Foreclose the real estate mortgage on the land.
   b. Cancel the installment sale.
   c. File a collection suit for P100,000 against B.
   d. No other remedy on the deficiency.

Answer 9

d. No other remedy on the deficiency.

Question 10

10. D borrowed P200,000 from C payable in 10 monthly installments of P20,000 each. The credit was secured by a chattel mortgage on D’s truck. D defaulted on the 1st and 2nd installments. The chattel mortgage waS foreclosed and the truck was sold for P150,000. Which of these statements is correct?
    a. C cannot recover the P50,000 deficiency Tom D because it is prohibited under the Recto Law.
    b. C cannot recover the P50,000 from D because there is no recovery of deficiency in mortgage contracts.
    c. C can recover the P50,000 deficiency from D because the Recto Law is not applicable
    to loans secured by a chattel mortgage.
    d. None of the foregoing.

Answer 10

c. C can recover the P50,000 deficiency from D because the Recto Law is not applicable
to loans secured by a chattel mortgage.

Question 11

11. R.A. No. 6552 (Realty Installment Buyer Protection Act), more popularly known as the Maceda Law, covers the installment sale or financing of:
    a. Condominium dwelling units
    b. Commercial buildings
    c. Industrial lots
    d. Agricultural lands to tenants under the Agrarian Reform Program .

Answer 11

a. Condominium dwelling units

Question 12

12. Where the installment buyer was able to pay less than two (2) years of installment, the Maceda Law grants him a grace period, without any additional interest, of:
    a. Thirty (30) days
    b. Sixty (60) days
    c. One (1) month
    d. Two(2)months

Answer 12

b. Sixty (60) days

Question 13

13. Where the installment buyer was able to pay two (2) years or more of installment, the Maceda Law grants him a grace period, without any additional interest, of:
    a. Thirty (30) days for every year of installment paid.
    b. Sixty (60) days for every year of installment paid.
    c. One (1) month for every year of installments paid.
    d. Two (2) months for every year of installment paid.

Answer 13

c. One (1) month for every year of installments paid.

Question 14

14. B bought the residential lot of S for P1,000,000 on installment under the following terms: P200,000 down payment on January 2, 200A; P100,000 every year thereafter until fully paid. Assume that B defaulted on the very first installment due on January 2, 200B. Under R.A. No. 6552, more popularly known as the Maceda Law, the grace period and cash surrender value of B shall be:
    a. 60 days and P 0, respectively.
    b. 60 days and P100,000, respectively.
    c. 30 days and P 100,000, respectively.
    d. No grace period and no cash surrender value.

Answer 14

a. 60 days and P 0, respectively.

Question 15

15. Assume the same facts in Q. 418, except that B defaulted on the installment due on January 2, 200H. Under the Maceda Law, the grace period of B shall be:
    a. 6 months
    b. 7 months
    c. 8 months
    d. 9 months

Answer 15

a. 6 months

Question 16

16. Assume the same facts in Q. 418 and Q. 419. Under the Maceda Law, the cash surrender value to be refunded to B, in the event the sale is cancelled, shall be computed as:
    a. P100.000 x 7 years = P700,000 + 200,000
    = P900,000 x 60% = P540,000
    b. P100,000 x 6 years = P600,000 + 200,000
    = P800,000 x 55% = P440,000
    c. P100.000 x 7 years = P700,000 x 60%
    =P420,000 + 200,000 = P620.000
    d. P100,000 x 6 years= P600,000 x 55%
    = P330,000 + 200,000 = P530,000

Answer 16

b. P100,000 x 6 years = P600,000 + 200,000
= P800,000 x 55% = P440,000

Question 17

17. Under R.A. No. 10142, , otherwise known as the Financial Rehabilitation and Insolvency Act
    (FRIA) of 2010, the term includes: “debtor”
    a. Banks
    b. Government-owned or -controlled corporations
    c. Both (a) and (b)
    d. Neither (a) nor (b)

Answer 17

d. Neither (a) nor (b)

Question 18

18. Under the Financial Rehabilitation and Insolvency Act (FRIA), which of the following statements relative to a court- supervised rehabilitation is false?
    a. The insolvent debtor may file the verified petition for rehabilitation provided it is
    approved by the owner in case of sole proprietorships, 2/3 of the partners in case
    of partnerships, or majority vote of the board of directors or trustees and authorized by at least 2/3 of outstanding capital stock or members in the case of corporations.
    b. Any creditor or group of creditors may file a verified petition for rehabilitation of the debtor
    provided his or their claim/s amount to at least P1,000,000 or at least 25% of the subscribed
    capital stock or partners’ contributions, whichever is higher.
    c. Both (a) and (b).
    d. Neither (a) nor (b).

Answer 18

a. The insolvent debtor may file the verified petition for rehabilitation provided it is
approved by the owner in case of sole proprietorships, 2/3 of the partners in case
of partnerships, or majority vote of the board of directors or trustees and authorized by at least 2/3 of outstanding capital stock or members in the case of corporations.

Question 19

19. Which of the following acts is within the ambit of a Stay or Suspension Order under the Financial Rehabilitation and Insolvency Act (FRIA)?
    a. Cases pending appeal before the Supreme Court as of commencement date of the Stay or
    Suspension Order
    b. Claims against issuers of letters of credit where the property is not necessary to the
    rehabilitation of the debtor
    c. Both (a) and (b)
    d. Neither (a) nor (b)

Answer 19

d. Neither (a) nor (b)

Question 20

20. Under the Financial Rehabilitation and Insolvency Act (FRIA), a person may be appointed as a Rehabilitation Receiver if:.
    a. He is a creditor, owner, partner or stockholder of the debtor.
    b. He is, or was, within five (5) years from the filing of the petition, an owner, partner, director, officer or employee of the debtor or any of the creditors, or the auditor or accountant of the debtor.
    c. He is related by consanguinity or affinity within the fourth civil degree to any individual
    creditor, owner of a sole proprietorship- debtor, partners of a partnership-debtor or to any stockholder, director, officer, employee or underwriter of a corporation-debtor.
    d. None of the foregoing.

Answer 20

d. None of the foregoing.

Question 21

21. The Financial Rehabilitation and Insolvency Act (FRIA) provides that a transaction occurring prior to the commencement date of the rehabilitation proceedings entered into by the debtor or involving its funds or assets may be rescinded or declared null and void by rehabilitation court on the ground that the same was executed with intent to defraud a creditors. A disputable presumption of such design shall arise where:
    a. The transaction involves an accelerated payment of a claim to a creditor within
    ninety (90) days prior to the commencement date.
    b. The transaction provides security or additional security executed within ninety (90) days after
    the commencement date.
    c. Both (a) and (b).
    d. Neither (a) nor (b).

Answer 21

a. The transaction involves an accelerated payment of a claim to a creditor within
ninety (90) days prior to the commencement date.

Question 22

22. Under the Financial Rehabilitation and Insolvency Act (FRIA), a creditor has adequate protection over the property securing its claim where:
    a. The debtor fails or refuses to honor a pre- existing agreement with the creditor to keep the property insured.
    b. The debtor fails or refuses to take commercially reasonable steps to maintain the property.
    c. The property has depreciated to an extent that the creditor is under secured.
    d. None of the foregoing.

Answer 22

d. None of the foregoing.

Question 23

23. The verified petition filed with the court for a Pre-Negotiated Rehabilitation Plan must be
    endorsed or approved by:
    a. Creditors holding at least 2/3 of the total liabilities of the debtor
    b. Secured creditors holding more than 50% of the total secured claims of the debtor and
    unsecured creditors holding more than 50% of the total unsecured claims of the debtor.
    c. Both (a) and (b).
    d. Neither (a) nor (b).

Answer 23

c. Both (a) and (b).

Question 24

24. An Out-of-Court Informal Restructuring Agreement or Rehabilitation Plan under the Financial Rehabilitation and Insolvency Act (FRIA) requires the agreement of the debtor and the approval of creditors representing at least:
    a. 75% of secured claims, 75% of unsecured claims, and 80% of total secured and unsecured claims
    b. 67% of secured claims, 75% of unsecured claims, and 85% total secured and unsecured claims
    c. 70% of secured claims, 70% of unsecured claims, and 75% total unsecured claims secured
    d. 50% of secured claims, 50% of unsecured claims, and 75% Of total secured and unsecured claims.

Answer 24

b. 67% of secured claims, 75% of unsecured claims, and 85% total secured and unsecured claims

Question 25

25. A standstill Period may be agreed upon by parties pending negotiation finalization of the Out-of-Court or Informal Restructuring Agreement or Rehabilitation Plan, provided;
    a. The agreement is approved by the creditors representing more than 50% of the
    total liabilities of the debtor.
    b. Notice thereof is published in a newspaper of general circulation once a week for three (3)
    consecutive weeks and the standstill period does not exceed 180 days from the date of
    effectivity
    c. Both (a) and (b).
    d. Neither (a) nor (b).

Answer 25

a. The agreement is approved by the creditors representing more than 50% of the
total liabilities of the debtor.

Question 26

26. An insolvent juridical debtor, such as partnerships and corporations, may be liquidated by way of voluntary liquidation whereby the insolvent debtor shall file a verified petition for its liquidation with the court containing:
    a. Schedule of the debtor’s debts and liabilities and inventory of all its assets
    b. Name of one (1) nominee to the position of liquidator
    c. Both (a) and (b)
    d. Neither (a) nor (b)

Answer 26

a. Schedule of the debtor’s debts and liabilities and inventory of all its assets

Question 27

27. In the involuntary liquidation of a debtor under the Financial Rehabilitation and 464 Insolvency Act (FRIA), the initiating three (3) or more creditors must have claims against the debtor in the aggregate amount
    a. At least P500,000 or at least 50% of the subscribed capital Stock or partners contributions, whichever is lower
    b. At least P500,000 or at least 50% of the subscribed capital Stock or partners contributions, whichever is higher
    c. At least P1,000,000 or at least 25% of the subscribed capital Stock or partners contributions, whichever is lower
    d. At least P1,000,000 or at least 25% of the subscribed capital Stock Or partners
    contributions, whichever is higher

Answer 27

d. At least P1,000,000 or at least 25% of the subscribed capital Stock Or partners
contributions, whichever is higher

Question 28

28. Under the Financial Rehabilitation and Insolvency Act (FRIA), what remedy is available to an individual debtor who, possessing sufficient property to cover all his debts, foresees the impossibility of meeting them when they respectively fall due?
    a. Voluntary liquidation
    b. Involuntary insolvency
    c. Suspension of payments
    d. None of the foregoing

Answer 28

c. Suspension of payments

Question 29

29. To form a majority vote on any proposed agreement during the creditor’s meeting in suspension of payments, it is necessary:
    a. That three-fourths (3/4) of the creditors voting unite upon the same proposition.
    b. That the claim represented by said majority vote amount to at least four-fifths (4/5) of the
    total liabilities of the debtor.
    c. Both (a) and (b).
    d. Neither (a) nor (b).

Answer 29

d. Neither (a) nor (b).

Question 30

30. What are the grounds for which an objection may be made to the decision of the majority in the creditors’ meeting?
    a. Defects in the call of the meeting, in the holding thereof, and in the deliberations had thereat which prejudice the rights of the creditors.
    b. Fraudulent connivance between one or more creditors and the individual debtor to vote in favor of the proposed agreement.
    c. Fraudulent conveyance of claims for the purpose of obtaining a majority.
    d. All of the foregoing.

Answer 30

d. All of the foregoing.

Question 31

31. X filed a petition for suspension of payments in court. During the pendency of the proceedings, a writ of execution was issued by another court in favor of C, an unsecured creditor, against X. M, a creditor-mortgagee, also initiated the foreclosure of the mortgaged property of X. Which of the following statements relative to Suspension of Payments under the FRIA is correct?
    a. Both the execution in favor of C and the foreclosure on the mortgage in favor of M shall be suspended.
    b. Both the execution in favor of C and the foreclosure on the mortgage in favor of M shall
    proceed.
    c. The execution in favor of C shall proceed but the foreclosure on the mortgage in favor of M
    shall be suspended.
    d. The execution in favor of C shall be suspended but the foreclosure mortgage in
    favor of M shall proceed.

Answer 31

d. The execution in favor of C shall be suspended but the foreclosure mortgage in
favor of M shall proceed.

Question 32

32. Under the Financial Rehabilitation and Insolvency Act (FRIA), which of the following petitions amounts to an act of insolvency?
    a. Voluntary liquidation
    b. Suspension of payments
    c. Rehabilitation
    d. None of the foregoing

Answer 32

a. Voluntary liquidation

Question 33

33. Which of the following statements relative to the Liquidation Order is false?
    a. The juridical debtor shall be dissolved and its corporate deemed or juridical existence terminated upon issuance of the Liquidation Order.
    b. Separate actions for collection unsecured claim shall be allowed.
    c. The legal title and control of all assets of the debtor, except those that may be exempt from
    execution, shall be deemed vested in the Liquidator or, pending his election or appointment, with the court.
    d. All contracts of the debtor shall be deemed terminated and/or breached, unless the liquidator, within ninety (90) days from the date of his assumption of office, declares otherwise and the contracting party agrees.

Answer 33

b. Separate actions for collection unsecured claim shall be allowed.

Question 34

34. When an action that is still pending upon the issuance of the Liquidation Order is transferred to the Liquidator, he may:
    a. Settle the case.
    b. Contest the case which is already on appeal.
    c. Either (a) or (b).
    d. Neither (a) nor (b).

Answer 34

a. Settle the case.

Question 35

35. The Liquidation Order shall not affect the right of a secured creditor to enforce his lien in
    accordance with the applicable contract or law. A secured creditor may:
    a. Waive his right under the security or lien, prove his claim in the liquidation proceedings and share in the distribution of the assets of the debtor.
    b. Maintain his rights under the security or lien.
    c. Either (a) or (b).
    d. Neither (a) nor (b).

Answer 35

c. Either (a) or (b).

Question 36

36. Which of the following statements relative tO the appointment of the Liquidator is false?
    a. The Liquidator shall be elected by the creditors who have filed their claims within the period set by the court and whose claims are not barred by the Statute of Limitations.
    b. The Liquidator may be appointed by the court if the creditors did not attend the on date set for the election of the Liquidator.
    c. The Rehabilitation Receiver who was administering the debtor prior to the commencement of the liquidation may be appointed as the Liquidator,
    d. None of the foregoing.

Answer 36

d. None of the foregoing.

Question 37

37. Under R.A. No. 8556, otherwise known as the Financing Company Act, a financing company may not engage in one of the following acts:
    a. Direct lending
    b. Accept deposits from the public
    c. Discounting of notes receivable 469
    d. Buy and sell of evidences of indebtedness

Answer 37

b. Accept deposits from the public

Question 38

38. The absolute sale of accounts receivable on a “without recourse” basis is known as:
    a. Assignment
    b. Factoring
    c. Discounting
    d. None of the foregoing

Answer 38

b. Factoring

Question 39

39. Under R.A. 8792, otherwise known as the Electronic Commerce Act, the secret code which secures and defends sensitive information that crosses over public channels is known as:
    a. Electronic signature
    b. Electronic key
    c. Electronic document
    d. Electronic data message

Answer 39

b. Electronic key

Question 40

40. The Electronic Commerce Act penalizes the unauthorized access or interference in a computer system/server or information and communication system in order to corrupt, alter, steal or destroy, or introduce viruses and the like to electronic data messages of electronic documents. In addition, the Act also penalizes:
    a. Piracy
    b. Hacking
    c. Smuggling
    d. Falsification

Answer 40

a. Piracy

Question 41

41. Under R.A. No. 7042, otherwise known as the Foreign Investments Act, the term “Philippine national” does not include:
    a. Domestic partnership that is wholly owned by citizens of the Philippines.
    b. Domestic corporation where at least 60% of the outstanding stock entitled to vote is owned
    by citizens of the Philippines.
    c. Trustee of an employee retirement benefits plan who is a Philippine national where at least
    60% of the fund accrues to the benefit of Philippine nationals.
    d. Corporation organized abroad and registered as doing business in the Philippines
    under the Corporation Code where at least 60% of the outstanding capital stock entitled to vote is owned by citizens of the Philippines.

Answer 41

d. Corporation organized abroad and registered as doing business in the Philippines
under the Corporation Code where at least 60% of the outstanding capital stock entitled to vote is owned by citizens of the Philippines.

Question 42

42. Under the Foreign Investments Act, the phrase “doing business” includes a foreign entity that:
    a. Appoints a distributor domiciled in the Philippines which transacts business in its own name and for its own account.
    b. Opens a “liason” office in the Philippines.
    c. Has a nominee director to represent its interests in the domestic corporation.
    d. Merely invests as a shareholder in a domestic corporation duly registered to do business in the Philippines.

Answer 42

b. Opens a “liason” office in the Philippines.

Question 43

43. Under the Foreign Investments Act, the term “domestic market enterprise” includes an enterprise that:
    a. Produces goods for sale or renders services to the domestic market.
    b. Exports less than 60% of its production to foreign countries.
    c. Both (a) and (b).
    d. Neither (a) nor (b).

Answer 43

c. Both (a) and (b).

Question 44

44. The following items are classified as “basic necessities” under R.A. No. 7581, otherwise known as the Price Act;
    a. Rice; corn bread; fresh pork; beef and poultry meat
    b. Fresh fruits; flour; dried, processed and canned pork, beef and poultry meat
    c. Both (a) and (b)
    d. Neither (a) nor (b)

Answer 44

a. Rice; corn bread; fresh pork; beef and poultry meat

Question 45

45. There is no prima facie evidence of profiteering punishable under the Price Act whenever:
    a. Cooking oil is sold at a grossly excessive price without any price tag.
    b. Fertilizer is sold at a misrepresented weight.
    c. Fresh crabs and shrimps are sold 50% more than their normal prices in the immediately preceding month.
    d. Adulterated medicines are sold.

Answer 45

c. Fresh crabs and shrimps are sold 50% more than their normal prices in the immediately preceding month.

Question 46

46. The President, upon recommendation of the implementing agency or the Price Coordinating Council, may impose a price ceiling on any basic necessity or prime commodity if any of the following conditions so warrants:
    a. The impendency, existence, or effect of a calamity
    b. The prevalence or widespread acts of illegal price manipulation
    c. Either (a) or (b)
    d. Neither (a) nor (b)

Answer 46

c. Either (a) or (b)

Question 47

47. Under R.A. No. 7394, also known as the Consumer Act of the Philippines, what agency regulates the preparation and sale of meat, fresh fruits, poultry, milk, fish, vegetables and other foodstuff (unprocessed food) for consumption?
    a. Department of Health
    b. Department of Agriculture
    c. Department of Trade and Industry
    d. Local government units

Answer 47

d. Local government units

Question 48

48. Under the Consumer Act of the Philippines, which of the following statements is false?
    a. Consumer products and services refer to goods, services and credits, debts or obligations which are primarily for personal, family, household or agricultural purposes including, but not limited to, food, drugs, cosmetics and devices.
    b. An act or practice shall be deemed deceptive whenever the producer, manufacturer, supplier or seller, through concealment, false representation or fraudulent manipulation, induces a consumer to enter into a sale or lease transaction of any consumer product or service.
    c. Chain distribution plans or pyramid sales schemes are prohibited by the Consumer Act of the Philippines to be employed in the sale of consumer products.
    d. None of the foregoing.

Answer 48

d. None of the foregoing.

Question 49

49. Under the Consumer Act of the Philippines, a “home solicitation sale” means a consumer sale or lease which is personally solicited by any person or organization by telephone, person-to-person contact or by written or printed communication. Which of the following statements is not an element of a “home solicitation sale?”
    a. It is consummated at the buyer’s residence or place of business, at the seller’s transient
    quarters, or away from the seller’s regular place of business.
    b. It is communicated to the buyer by way of general advertising through radio,
    television, newspaper or magazine.
    c. It shall only be conducted between 9a.m. to 7p.m. on working days.
    d. A permit from the concerned Department must be obtained prior to the conduct of the sale.

Answer 49

b. It is communicated to the buyer by way of general advertising through radio,
television, newspaper or magazine.

Question 50

50. X purchased an electric fan on cash basis RST Superstore. The unit is from manufactured by STV Corporation and distributed by TVW Distributors, and is covered by an express and full warranty, X barely used the electric fan for a few days when it ceased to operate anymore.
    Which of the following statements relative to the Consumer Act of the Philippines is correct?
    a. X is not entitled to a refund should the unit be found to be irreparable.
    b. X should surrender the warranty card or official receipt together with the defective product to ST Corporation.
    c. STV Corporation shall be responsible in making good the warranty of the unit.
    d. RST Superstore is solidarily liable on the warranty with STV Corporation and TVW
    Distributors.

Answer 50

c. STV Corporation shall be responsible in making good the warranty of the unit.

Question 51

51. Under the Consumer Act of the Philippines, the original and exclusive jurisdiction to mediate, conciliate, hear and adjudicate all consumer complaints belongs to the:
    a. Consumer Arbitration Officers
    b. National Consumer Affairs Council
    c. Barangay Lupon
    d. Regular court

Answer 51

a. Consumer Arbitration Officers

Question 52

52. Under R.A. 9160, as amended, otherwise known as the Anti-Money Laundering Act (AMLA), the Anti-Money Laundering Council’s membership does not include:
    a. Secretary of Finance
    b. Governor of the Bangko Sentral ng Pilipinas
    c. Insurance Commissioner
    d. Chairman of the Securities and Exchange Commission

Answer 52

a. Secretary of Finance

Question 53

53. The Anti-Money Laundering Act (AMLA), penalizes both money laundering and unlawful activity. Which of the following statements relative to both offenses is false?
    a. A person may be charged with and convicted of both the offense of money laundering and
    the unlawful activity.
    b. Where a person is charged with both the offense of money laundering and the
    offense of unlawful activity, the proceeding relating to the former shall be given
    precedence than the proceeding relating to the latter.
    c. An unlawful activity includes any act or omission or series of combination thereof involving or having direct relation, among others, to kidnapping for ransom, drug trafficking, plunder, jueteng and masiao.
    d. The offense of money laundering committed by public officers and private persons in
    conspiracy of such public officers shall be under the jurisdiction of the Sandiganbayan.

Answer 53

b. Where a person is charged with both the offense of money laundering and the
offense of unlawful activity, the proceeding relating to the former shall be given
precedence than the proceeding relating to the latter.

Question 54

54. Under the Anti-Money Laundering Act (AMLA), a “covered transaction” and a “suspicious transaction” must be reported by the “covered institutions” (those under the supervision and regulation of the Bangko Sentral ng pilipinas, the Insurance Commissioner, and the Securities
    Exchange & Commission) within five (5) working days from the occurrence thereof. A “covered transaction” iS a transaction in cash or other equivalent monetary instrument with a total amount of:
    a. P250,000 or more in one (1) banking day.
    b. P500,000 or more in one (1) banking day.
    c. Over P500,000 in one (1) banking day.
    d. P1,000,000 or more in one (1) banking day.

Answer 54

c. Over P500,000 in one (1) banking day.

Question 55

55. The Court of Appeals, upon application ex parte by the Anti-Money Laundering Council (AMLC) and after determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity, may issue a freeze order which shall be effective immediately, The freeze order shall be for a period of (unless extended by the Court):
    a. Ten (10) days
    b. Twenty (20) days
    c. Thirty (30) days
    d. Sixty (60) days

Answer 55

b. Twenty (20) days

Question 56

56. The Anti-Money Laundering Council (AMLC) may inquire into or examine bank accounts only with an order of a competent court in cases involving:
    a. Kidnapping for ransom
    b. Drug trafficking
    c. Hijacking
    d. Jueteng and masiao

Answer 56

d. Jueteng and masiao

Question 57

57. To provide legal possible safeguards against any harassment to candidates for electoral offices, which of the following acts shall be prohibited during an election period?
    a. Provisional remedy of attachment on assets of the candidate
    b. Barring prosecution of money laundering cases filed before the election period
    c. Both (a) and (b)
    d. Neither (a) nor (b)

Answer 57

a. Provisional remedy of attachment on assets of the candidate