DE LA SALLE LIPA College of Business, Economics, Accountancy and Management Accountancy Accountancy Department Second Semester Sem ester – A.Y. A.Y. 202!20" 202!2 0" Accounting #e$ie% 2 &ui' ())) – Corporation *a% +ame-----------------------------------------------------+ame-------------------------------------------------------------------Date--------------------------Date--------------------------- -------------- - Section-----------------------------------------------------Section-----------------------------------------------------------------Score-------------------Score--------------------------- ------------------- Directi Direction on Read and solve the following problems. Write the letter of your best answer on the space provided before each number. Erasures are not allowed and considered wrong. ___1. A director of a corporation corporation may be removed removed by: a. Ma Maori ority vot vote e of of the the outst utsta andi nding capi capita tall st stoc! oc! c. Maor aoriity of the stoc stoc!h !hol olde derrs b. "#$ of the stoc!holders d. "#$ of the outstanding capital stoc! ___". %n the matter matter of management of of the corporation& corporation& this is supreme: supreme: a. 'resident b. (hairman of )*+ c. ,toc!holders d. )oard of directors ___$. A subscribed to 1&--- shares of stoc! of corporation and paid "/0 of the said subscription. (an he vote all his subscribed shares a. 2o because the subscription has not been fully paid b. 2o because his shares have become delin3uent shares c. 4es 4es as regards the paid percentage of the subscription d. 4es 4es because shares although unpaid but not delin3uent can be voted ___5. (orporation posted a '1M profit in its reality b usiness and its real estate has appreciated in value to the tune of '5M. 6he board then declared dividends computed on the basis of '/M representing profits and appreciation in value of its real estate. %s the dividend declaration void a. 2ot valid because there was no "#$ ratification by the outstanding capital stoc! b. 7alid 7alid being based o n profits and increments in the value of the corporate assets c. 2o valid because dividends d ividends must come only from the profits d. 7alid 7alid if creditors do not obect nor protest against the same ___/. A subscribed subscribed to 1-- shares of corporation& paying "/0 thereof. +espite the demand by for the issuance of stoc! certificate& the corporation refuses to issue one corresponding to the "/0 paid. Meanwhile& the corporation has become insolvent and A now refuses to pay his unpaid balance on his subscription. %s the refusal to issue a stoc! certificate valid a. 2ot value because stoc! certificate can be issued for the paid portion of the subscription b. 7alid 7alid because stoc! certificate can o nly be used after full payment of the subscription c. 7alid 7alid as regards the unpaid percentage on the subscription d. 2ot valid because only delin3uent shares may be denied stoc! certificate ___8. )ased on the facts in the preceding number& can a validly refuse to pay the unpaid balance on his subscription now that the corporation has become insolvent a. 2o under the trust fund doctrine for the protection of creditors b. 2o under the doctrine of piercing the veil of corporation fiction c. 4es 4es because of the insolvency of the corporation which also e9tinguished his obligation to pay the balance d. 4es 4es because of the denial of his right to stoc! certificate ___. Maority of the following following must be residents residents of the 'hilippines& 'hilippines& e9cept a. +irectors b. 6rustees c. %ncorporators d. *fficers ___;. 'rivate corporations corporations have the following attributes& attributes& e9cept a. %t is an artificial being created by operation of law. b. %t may be formed or created by mere consent. c. %t has the right of succession. d. %t has the powers& attributes and properties e9pressly authori
and and > were nominated. nominated. A& A& )& (& + and E received the highest number of votes and thus proclaimed as elected. > received ten votes less than E. ,ubse3uently& ,ubse3uently& E sold his shares to >. Who& between between E and > has the right to attend as director a. E us the director because his term is one year until his successor is elected and 3ualified. b. > is the director because he has bought the shares of E. c. )oth of them shall be directors.
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d. 2either of them shall be director. ___11. A)( corporation has an authoriive c. 6hree d. >our ___15. Which of the following re3uires the approval of the maority of the outstanding capital stoc! a. %nvestment of corporate funds in another business or corporation b. Amendment& repeal or adoption of by@laws c. +issolution of the corporation d. Amendment of the articles of incorporation ___1/. (orp. operates a call center that received orders for pi<D >oundation %nc. a non@profit organioundationCs Articles and )y@Baws are silent on the matter. As to each of the three& what is the ma9imum number of votes that he#she can cast a. 8 b. = c. 1" d. $
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___"-. 6 (orp. has a corporate term of "- years under its Articles of %ncorporation or from Fune 1& 1=;- to Fune 1&"---. *n Fune 1&1==1 it amended its Articles of %ncorporation to e9tend its life by 1/ years from Fune 1&1=;- to Fune 1&"-1/. 6he ,E( approved this amendment. *n Fune 1&"-11& however& 6 (orp decided to shorten its term by 1 year or until Fune 1&"-15. )oth the 1==1 and "-11 amendments were approved by maority vote of its )oard of +irectors and ratified in a special meeting by its stoc!holders representing at least "#$ of its outstanding capital stoc!. 6he ,E( however& disapproved the "-11 amendments on the ground that it cannot be made earlier than / years prior to the e9piration date of the corporate term& which is Fune 1&"-15. %s this ,E( disapproval correct a. 2o& since the /@year rule on amendment of corporate term applies only to e9tension& not shortening of term b. 4es any amendment affecting corporate term cannot be made earlier than / years prior to the corporationCs e9piration date c. 2o& since a corporation can in fact have a corporate life of /- years. d. 4es the amendment to shorten corporate term cannot be made earlier than / years prior to the corporationCs e9piration date ___"1. (orp. whose business is to manufacture and sell vehicles& invested its funds in 4 (orp. an investment firm& through a resolution of its )oard of +irectors. 6he investment grew tremendously on account of 4 (orpCs e9cellent business udgment. )ut a minority stoc!holder in (orp assails the investment as ultra vires. %s he right and if so& what is the status of the investment a. 4es it is an ultra vires act of the corporation itself but voidable only subect to stoc!holderCs ratification b. 4es it is an ultra vires act of its )oard of +irectors and thus void c. 4es it is an ultra vires act of its )oard of +irectors but voidable only subect to stoc!holderCs ratification d. 4es it is an ultra vires act of the corporation itself and conse3uently& void ___"". 6he (orporation (ode sanctions a contract between two or more corporations which have interloc!ing directors& provided there is no fraud that attends it and it is fair and reasonable under the circumstances. 6he interest of an interloc!ing director in one corporation may be either substantial or nominal. %t is nominal if his interest a. +oes not e9ceed "/0 of the outstanding capital stoc! b. E9ceeds "/0 of the outstanding capital stoc! c. E9ceeds "-0 of the outstanding capital stoc! d. +oes not e9ceed "-0 of the outstanding capital stoc! ___"$. %n case of disagreement between the corporation and withdrawing stoc!holder who e9ercises his appraisal right regarding the fair value of his shares& a three@member group shall by maority vote resolve the issue with finality. May the wife of the withdrawing stoc!holder be name to the three member group a. 2o the wife of the withdrawing shareholder is not a disinterested person b. 4es since she could best protect her husbandCs shareholdings c. 4es since the rules do not discriminate against wives d. 2o since the stoc!holder himself should sit in the three@member group ___"5. 6he rule is that no stoc! dividend shall be issued without the approval of stoc!holders representing at least "#$ of the outstanding capital stoc! at a regular or special meting called for the purpose. As to other forms of dividends a. A mere maority of the entire )oard of +irectors applies b. A mere maority of the 3uorum of the )oard of +irector applies c. A mere maority of the votes of stoc!holders representing the outstanding capital applies d. 6he same rule of "#$ vote applies ___"/. ,everal American +octors wanted to set up a group of clinic in the 'hilippines so they could render modern medical services. %f the clinic is to be incorporated under our laws& what is the re3uired foreign e3uity participation in such corporation a. 5-0 b. -0 c. 8-0 d. -0 ___"8. 6he )oard of +irectors of 4 (orp unanimously passed a resolution approving the ta!ing of steps that in reality amounted to willful ta9 evasion. *n discovering this& the government filed a ta9 evasion charges against all the companyCs members of the board of directors. 6he directors invo!ed the defense that they have no personal liability& being mere directors of a fictional being. Are they correct a. 2o since as a rule only natural persons li!e the members of the board of directors can commit corporate crimes. b. 4es since it is the corporation that did not p ay the ta9 and it has personality distinct from its directors c. 4es since the directors officially and collectively performed acts that are imputable only to the corporation d. 2o since the law ma!es directors of the corporation solidarily liable for gross negligence and bad faith in the discharge of their duties. ___". 6he Articles of %ncorporation must be accompanied by a 6reasurerCs Affidavit certifying under oath& among others& that the total subscription paid is a. 2ot less than '"/&--b. 2ot more than '/&--c. 2ot less than '/&--- d. 2ot more than '"/&---
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___";. 6he Articles of %ncorporation of A)( 6ransport %nc. a public utility& provides for ten members in its )oard of +irectors. What is the prescribed minimum number of >ilipino citiive but not more than 1/ uridical and natural persons& maority of whom are residents of the 'hilippines may form a private corporation. c. 2o par value shares of stoc! cannot be issued by ban!s& trust companies& insurance companies& building and loan association and public utilities. d. Membership in nonstoc! corporation and rights arising there are from are personal and nontransferable and therefore cannot be transferred even if p rovided in the Articles of %ncorporation or in the )y@Baws. ___$". 6his group of persons may not be the incorporators in the 'hilippines a. 1/ Fapanese citiilipinos residing in Australia d. 1/ >ilipinos who are residents of ,A ___$$. A corporation is deemed dissolved a. (eased operation for at least / years b. 2o commencement of business transaction within " years from issuance of certificate of incorporation c. A member of the board is convicted of an offense d. Maority of the members of the board are dead ___$5. Every corporation whose charter e9pires by its own limitation& or annulled by forfeiture or otherwise& or whose corporate e9istence for other purposes is terminated in any other manner shall nevertheless be continued as a body corporate for $ years after the time when it would have been dissolved for the purpose of the following& e9cept a. 'rosecuting and defending suits by or against it and enabling it to settle and close its affairs b. 6o dispose and convey its property c. 6o distribute its assets d. (ontinuing the business for which it was established ___$/. As a rule pre@incorporation subscription is irrevocable for a period of at least a. $- days b. 8- days c. 8 months d. 1 year ___$8. A& )& (& + and E are directors of a corporation. 6wo days before the meeting of the board& where by a unanimous vote& a resolution declaring a /-0 stoc! dividend was passed& A& )& and ( sold and transferred all their shares. 6he transfers were duly registered in the boo!s of the corporation immediately after the sale. %s the dividend declaration legal a. 4es& A& ) and ( are still 3ualified to sit as members of the board in hold@over capacity until their successors shall have been elected and 3ualified. b. 2o& at the time the resolution was passed& A& ) and ( were no longer 3ualified to sit as directors since they are no longer stoc!holders. c. 4es& unanimous vote means all directors approved the resolution d. 2o& if the other members of the board were not informed of the transfers made ___$. Which of the following is the disadvantage of forming a corporation a. 6he free J ready transferability of ownership b. 6he shareholders are not liable for the debts of the business c. )ecause of the power of succession& the e9istence of the entity is not affected by the personal vicissitudes of the individual stoc!holders d. 6he subservience of minority stoc!holders to the wishes of the maority subect only to e3uitable restraints ___$;. (ash dividend as distinguished from stoc! dividend a. (orporate capital is increased b. (oncurrence of the stoc!holders is re3uired c. %nvolves disbursement to the stoc!holders of accumulated earnings d. )eing part of corporate p roperty& maybe reached by corporate creditors
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___$=. F is one of the directors of +elightful (orporation. Bater& she sold all her shares to K. ,ubse3uently& a meeting of the board of directors was held and both F and K attended said meeting& each claiming the right to participate in the deliberation of the board. F contended that she has the right to continue as director until the stoc!holders could elect her successor. *n the other hand& K argued that having pu rchased all of FCs shares she has the right to ta!e the latterCs place in the board. Which of the following is not correct a. )oth F and K are dis3ualified to sit as directors in the )oard of +irectors b. F cannot 3ualify as she disposed all the shares c. K cannot 3ualify as she must have to be elected by the stoc!holders d. K can 3uality because a stoc!holder as well as the heirs and assigns of a stoc!holder of the same corporation has the right of succession ___5-. 6he articles of incorporation is re3uired to state the name& nationalities and residence of persons who shall act as directors or trustees until the first regular directors or trustees are duly elected and 3ualified. 6his re3uirement is intended to provide a basis by which the ,E( could determine whether the articles of incorporation has complied with the re3uirement that a. At least maority of the directors or trustees are residents of the 'hilippines b. At least maority of the directors or trustees are citialse c. >alse& 6rue d. >alse& >alse ___5". %f there are = members of the board and the by@laws provide for the creation of an e9ecutive committee& the minimum number of its members is a. b. / c. 5 d. $ ___5$. 6he e9ecutive committee shall act by a. nanimous vote b. Maority vote c. "#$ vote d. L vote ___55. %n a meeting to elect the officers only = out of 11 members of the board attended. ?ow many votes will be needed to elect the 'resident of the (orporation a. = b. c. 8 d. / ___5/. 6he powers cannot be e9ercised by the e9ecutive committee& e9cept a. 6o fill up the vacancy in the board b. 6o distribute cash dividend c. 6o increase the minimum number of shares needed before a shareholder may 3ualify to be a member of the board d. 6o enter into contract for the supply o f goods needed by the corporation ___58. ,hares of stoc! cannot be issued if the consideration received is areN a. Money b. 'roperty c. 'revious services rendered d. 'romissory notes ___5. ?e must be a resident citi
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a. Monthly b. Iuarterly c. Wee!ly d. Annually ___/8. %. 6reasury shares shall have no voting rights as long as such stoc! remains in treasury. %%. ,hares of stoc!s shall not be issued in e9change for future services. a. 6rue& 6rue b. 6rue& >alse c. >alse& 6rue d. >alse& >alse ___/. E9cept as a condition in a loan agreement& the voting trust agreement shall not e9ceed a. 8 months b. 1 year c. $ years d. / years ___/;. *ne of the following does not re3uire stoc!holderCs approval a. (hange of corporate name b. Merger or consolidation c. +eclaration of share dividend d. %nvestment of corporate funds outside main purpose of the corporation ___/=. Which of the following statement is correct a. Eleemosynary corporation is one established for business o r profit b. (orporation aggregate is one established for religious purpose c. (ivil corporation is one established under laws of the 'hilippines d. Bay corporation is one established for purposes other than religion ___8-. An individual or a domestic corporation designated in a written power of attorney by a foreign corporation authoriilling of vacancy in the board of directors b. (ash dividend declaration c. )oard resolution on depositary ban! of the corporation d. ,toc! dividend declaration ___85. When the preferred shares are issued by a corporation with a fi9ed interest on the face thereof& the effect is a. 6he contract of subscription subsists b. 6he said stoc!holder is a creditor of the corporation c. 6he said shares of stoc!s become negotiable instruments d. 6he stoc!holder is a p lain investor who may benefit or suffer with financial success o r failure of the corporation ___8/. 6hree of the following are not authoriounders shares d. 'romotion stoc! ___8;. 6he power to deny pre@emptive rights to stoc!holder is a. %ncidental power b. E9press power c. %mplied power d. +iscretionary power ___8=. 6his is the written ac!nowledgement of the interest of the stoc!holder in the corporation. a. 'ro9y b. ,hare of stoc! c. 7oting trust agreement d. (ertificate of stoc! ___-. 6hey provide and regulate the internal matters of the corporation. a. Articles of incorporation b. )y@laws c. (ertification of incorporation d. (ertificate of filing by@laws ___1. 6his is a public instrument giving authority to vote for stoc!holder. a. 'ro9y b. 7oting trust agreement c. ,toc! certificate d. 6rust certificate ___". A gratuitous reissue of treasury shares will result in a. (apital surplus b. ,toc! dividend c. Watered stoc! d. 'roperty dividend ___$. 6he nationality of the corporation is determined by the nationality of the stoc!holders in control of the same is called a. +omicile test b. %ncorporator test c. Management test d. (ontrol test
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___5. 7acancy in the board of directors can be filled up by the remaining directors in the following cases& e9cept a. %ncrease in the number of directors c. +eath of a director b. Resignation of a director d. 2one of the above
___/. 6he following are re3uisites for de factor corporation& e9cept a. 7alid law under which it is organiive years b. ten years c. /- years d. "- years ___;8. +ividend which are actually distributions of the assets of the corporation upon dissolution or winding up a. )ond dividend b. 'referred dividend c. (umulative dividend d. Bi3uidating dividend ___;. %f the authori
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