L-NU AA-23-02-01-18

LYCEUM-NORTHWESTERN UNIVERSITY
Tapuac District, Dagupan City

COLLEGE OF BUSINESS EDUCATION

FINALS EXAMINATION – ELEC 4 Taxation and Law Updates

Summer, AY 2020– 2021
Prepared by: Amie Jane R. Miranda, CPA

Name:_____________________________________ Score:____________________

Student No.: _______________ Year/Section:___________ Date of Exam: ____________

I. MULTIPLE CHOICES. Choose the best answer from the choices and encircle your answer.
Strictly “NO ERASURES”.

Items 1-3 are based on the following information:

Jason Elcano Corporation has a soft spot for senior citizens and persons with disability (PWDs).
As such, it hires senior citizens and PWDs to work in the company for at least six (6) months. The
following data taken from the books of accounts that are provided by the Corporation:
Gross sales P15,000,000
Cost of sales 5,000,000
Salaries of senior citizens 500,000
Salaries of PWDs 300,000
Actual amount of assistance under
Adopt-A-School program
(fully deductible) 200,000
Other operating expenses 3,000,000
During the same period the corporation also allows 20% discount to senior citizens and PWDs
who buy goods from the company. The sales are as follows (not part of the gross sales above).
Sales to senior citizens P 800,000
Sales to PWDs 500,000
Total P1,300,000

1. How much is the total discount given?

a. P260,000
b. P100,000
c. P160,000
d. Answer not given
2. How much is the total itemized deductions including the special itemized deductions?
a. P4,480,000
b. P4,175,000
c. P4,435,000
d. Answer not given
3. How much is the output VAT of the corporation?
a. P2,079,456
b. P1,828,000
c. P1,848,000
d. None of the choices
4. To establish trademark infringement, the following elements must be shown: (1) the validity of
the plaintiff’s mark; (2) the plaintiff’s ownership of the mark; and (3) the use of the mark or its
colorable imitation by the alleged infringer results in “likelihood of confusion” Of these, the
element of ______________ is the gravamen of trademark infringement.

a. Element no. 1
b. Element No. 2
c. Element No. 3
d. All of the above

1|Page
5. Atty. Ana Maganda wrote a legal opinion for a client on the differences of a probationary,
regular, casual and seasonal employee. She quoted without permission Atty. Aliling’s comment
appearing in his book “Annotations on the Labor Code”, but she indicated the source of the
quotation, the book and the author’s name. Atty Aliling is a labor law expert. Can Atty. Aliling
hold Atty. Ana Maganda liable for infringement of copyright for quoting a portion of his book
without his permission?

a. Yes, because Atty. Ana Maganda copied somebody else’s work without the original author’s
consent.
b. No, because the Intellectual Property Code provides that a quotation from a copyrighted
work can be used for judicial proceedings or for giving professorial advice by legal
practitioner, provided the source are identified.
c. Yes, because Atty. Ana Maganda used the work of another for her own gain.
d. No, because everybody can quote somebody as long as the source and the name of the
author of the quotation are identified.
6. Read the following statements and determine which of the choices are correct:
Statement 1: Infringement is the use by others without the registrant’s consent of a
reproduction or colorable imitation of his trademark, tradename or service mark with the
purpose of causing to mislead or misleading the public that those goods or services are those of
the registrant.
Statement 2: The definition of infringement implies that only registered trademarks, trade
names and service marks are protected against infringement or unauthorized use by another or
others
a. Both statements are true
b. Statement 1 is true while Statement 2 is false
c. Only Statement 1 is true
d. Only Statement 2 is true
7. As part of the safeguards against imprudent banking, the General Banking Law imposes limits or
restrictions on loans and credit accommodations which may be extended by banks. Which of the
following are not considered limits and restriction on loans and credit accommodation?
a. SBL Rules- those promulgated by the Bangko Sentral ng Pilipinas upon authority if Section 35
of the General Banking Law of 2000
b. DOSRI Rules- promulgated by BSP, upon authority of section 5 of the General Banking law
c. Anti-Money Laundering Law
d. No commercial bank shall make any loan or discount on the security of shares of its on
capital stocks.
8. The powers that may be conferred to the conservator are such powers as may be
necessary in Conservatorship except:
a. To take charge of the assets, liabilities, and the management
b. To reorganize the management of the subject bank
c. To collect all monies and debts due and exercise all powers necessary to restore its
viability
d. All of the above
9. Any activity resulting from a trustor- trustee relationship involving the appointment of a
trustee
by a trustor for the administration, holding, management of funds for the use or benefit
or advantage of the trustor or of others called beneficiaries
a. Partnership Business
b. Trust Business
c. Corporation Business
d. Trusteeship Business
10. Entities engaged in the lending of funds obtained in the form of deposits from the
public.
a. Quasi Banks
b. Banks
c. Pawnshop
d. Commercial Banks
2|Page
11. The following are functions of banks except:
a. Deposit function
b. Loan function
c. Make collections and payments
d. Outsourcing of functions
12. It is commonly known as an account with fixed term.
a. Savings account
b. Time deposit
c. Peso deposit
d. Dollars account
13. Bank accounts maybe garnished by the creditors of the depositor. Which of the
following deposits are exempt from garnishment?
a. Foreign Currency deposits and those exempt by rules of Civil Procedure like
provision for the family for four months.
b. Deposit that have become dormant for a period of ten (10) years.
c. Money or security or other evidence of indebtedness of any kind and interests
thereon with banks, buildings and loan associations.
d. Loans and other credit accommodations with maturities of more than five (5) years.
14. The provisions of compulsory licensing provides for instances where the patent holder is
required to grant a license to the government or to a 3 rd party. Is this provision unfair for
depriving the patent holder of his right to his property?
a. No. This is a case of eminent domain.
b. Yes. This is a case of depriving the patent holder of his property without due process of law
c. No. The patent holder is not deprived of his rights to the patent since he will still receive
royalties for his patents.
d. Yes. The patent holder has exclusive rights over his patents and such exclusivity is rendered
inutile by the provision.
15. Q: Which of the following types of names confer the greatest chance of being a valid trademark?
a. Generic
b. Descriptive
c. Suggestive
d. Arbitrary/Fanciful
16. Businessman A puts up a sari-sari store named “Andongs”. B also puts up a sari-sari store named
“Andongs” a month later. Can A filed against B an infringement case?
a. Yes. A can file an infringement case against B for unlawfully using his tradename.
b. No. He has not registered his tradename.
c. Yes. This is a case of unfair competition.
d. No. He has not registered his trademark.
17. When testing whether the likelihood of deception has occurred, at what point of a transaction
do we consider such likelihood?
a. After the sale of the item bearing the mark.
b. Prior to the sale of the item bearing the mark.
c. At the point of the sale of the item bearing the mark.
d. None of the above.
18. When is non-use of a mark excusable?
a. It must always be used, failure to use it for any reason will forfeit the use of such mark.
b. When the trademark owner is lacking in funds due to slow sales.
c. When the trademark owner has already registered his mark with the IPO
d. When the cause of such non-use is due to reasons independent of the will of the
trademark owner.
19. Which among the following statements is false?
a. Infringement of trademark is the unauthorized use of a trademark, whereas unfair
competition is the passing off of one’s goods as those of another.
b. In infringement of trademark, fraudulent intent is unnecessary, whereas in unfair
competition, fraudulent intent is essential.

3|Page
 c. In infringement of trademark and in unfair competition, prior registration are both
necessary.
d. In infringement of trademark and in unfair competition, prior registration to both are not
necessary
20. Suppose an author published a book describing a new method of book-keeping, which of the
following statements is true?
a. The author has a copyright over the book as well as the method described in his book; thus,
he is able to preclude others from only copying the book as well as preclude others from
employing the method as described in the book without his permission.
b. The author has an exclusive right to the method described in the book.
c. The extent of the author’s copyright is limited to him being able to prevent third persons
from copying portions of his work; he is unable to prevent third persons from employing
or describing the method discussed in such book.
d. The extent of the copyright extends to the idea itself, not merely the expression
21. A was able to invent a new type of vehicle. However, B was able to register the invention first
although it was clearly A who was the true inventor. What remedy may A avail of?
a. He will file a civil case of patent infringement
b. He can file for cancellation of patent plus damages
c. He can file for the substitution as the real patentee
d. Both A and C
22. A medicine already being distributed both in the U.S. and in the Philippines by distributor VX
authorized by the patent holder is now being imported by A, a doctor who operates a small
clinic and is using the drug for the treatment of his patients. Is A liable for patent infringement?
a. Yes. A is liable since VX is the only authorized distributor of the patented drug.
b. No. A is not liable since section 72 (1) allows such use of the product.
c. Yes. A is liable since he is not an authorized distributor of the product.
d. No. A is not liable since this is a case of fair use.
23. A has been importing patented medical drugs from Thailand. The patent is owned by B. B has a
local distribution unit in the Philippines. B wants to file a case of patent infringement and
importation of counterfeit drugs against A. Will this prosper?
a. No. This is a case of fair use
b. Yes. A counterfeit drug is a form of infringement against the patent of B.
c. No. An unregistered drug is not the same as a counterfeit drug and also that section 72 (1)
allows such importation by a 3rd party.
d. Yes. B has not authorized A to distribute the products.
24. When a device appropriates a prior invention by incorporating its innovative concept and,
although with some modification and change, performs substantially the same function in
substantially the same way to achieve substantially the same result, what test should be
applied?
a. Literal infringement test
b. Denicola test
c. Doctrine of Equivalents test
d. Fair Use test
25. What can a bank lawfully do or omit to do without violating its duty to exercise extraordinary
diligence in the handling of deposits?
a. Allowing a crossed check to be cashed provided that the payee is personally known to the
bank.
b. Accepting as deposit a check which is not indorsed by the payee, provided that the check is
a manager’s check.
c. Closing a demand deposit account with prior notice to a depositor who has been misusing
such account repeatedly overdrawing against it.
d. Disclosing information regarding “and/or” savings account where one of the two
depositors has given his written permission for such disclosure.
26. The right to secrecy of bank deposits –
a. Being part of municipal law, does not apply to deposits in branches of foreign banks in the
Philippines.
b. Is a constitutional right which may, however, be regulated by statute.
c. Cannot be invoked in the absence of an express statutory provision.

4|Page
 d. If violated will render the information obtained thereby inadmissible as evidence in any
proceeding against the depositor.
27. A public officer is charged with violation of the anti-graft and corrupt practices act before the
Office of the Ombudsman. The Ombudsman requests a bank to disclose information regarding
the accounts in the name of the public officer’s immediate family. What principle or ground may
the bank invoke to resist such inquiry?
a. An inquiry into bank deposits cannot be had at the preliminary investigation level.
b. No inquiry into bank deposits can be had in the absence of a court order.
c. No inquiry can be made except into bank accounts of the person charged.
d. The office of the Ombudsman has no power to inquire into bank deposits.
28. An ex-president of the Philippines is accused of committing the crimes of plunder and money
laundering in the course of the proceedings, the Office of the Special Prosecutor filed a Motion
with the Sandiganbayan for the issuance of an order directing the examination of such ex-
President’s U.S. Dollar account. What ground can be validly invoked by the ex-president to
oppose such motion?
a. A foreign currency deposit cannot be inquired without the consent of the depositor.
b. Plunder is not an exception to the prohibition against disclosure under the Foreign
Currency Deposit Act.
c. Money Laundering is not an exception to the prohibition against disclosure under the
Foreign Currency Deposit Act.
d. Assuming that money laundering is an exception to the prohibition against disclosure under
the Foreign Currency Deposit Act, the court must first find probable cause of money
laundering since the instant charges do not fall within the cases where no court order is
required.
29. A universal bank and a commercial bank differ in terms of their power –
a. To invest in non-financial allied enterprises.
b. To create and accept demand deposits.
c. To act as investment house.
d. To perform quasi-banking functions.
30. Rural banks and cooperative banks essentially differ in terms of –
a. Purpose.
b. Powers.
c. Governing law in matters other than organization, ownership, capital requirements, powers,
supervision, and general conduct of business.
d. Being authorized to create or accept demand deposits even without Monetary Board
approval.
31. The distinction between the three modes of entry of foreign banks in the Philippines under the
Foreign Banks Liberalization Act is material in determining –
a. Whether or not a foreign bank may avail of more than one mode of entry.
b. Whether or not Monetary Board Approval is required for such entry.
c. Whether or not head office guarantee is required.
d. Whether or not the foreign bank shall perform the same functions enjoy the same
privileges, and be subject to the same limitations imposed upon a Philippine bank of the
same category.
32. The General Banking Law of 2000 applies –
a. To all types of banks in suppletory manner.
b. Only to banks which are not government owned or controlled.
c. To savings and mortgage banks, non-stock savings and loans associations, and private
development banks.
d. To the operation of branches of foreign banks in the Philippines.
33. Which of the following negates a charge that an entity is engaged in banking business?
a. If it obtains funds only from qualified depositors.
b. If it invests, rather than lends, the funds obtained.
c. If at any given time, the number of depositors falls below twenty (20).
d. If it has not obtained the requisite authority to operate as such from the Bangko Sentral ng
Pilipinas.
34. No. 1 – A bank may be may lend to a single borrower more than fifteen (15%) of the bank’s
unimpaired capital.

5|Page
 No. 2 – A deposit in a bank in foreign currency may be inquired into provided the depositor gives
his consent, orally or in writing.
a. Both are false.
b. Both are true.
c. No. 1 is true; no. 2 is false.
d. No. 1 is true; no. 2 is false.
35. It is a bank which creates or accepts demand deposits subject to withdrawal by checks and
primarily organized to carry on the business of accepting drafts and issuing letters of credit,
discounting and negotiating promissory notes, receiving deposits, buying and selling foreign
exchange and gold and silver bullion and lending money against the borrower’s security in
property.
a. Rural bank;
b. Thrift bank;
c. Universal bank;
d. Commercial bank.
36. Center Book Store is the publisher of the book Legal Journal. It donated one copy to the Library
of the U.E. College of Law. The Library, in order to preserve the original book, reproduced one
copy of the Journal for lending to the University’s students for room use. Is the U.E. Law Library
liable for copyright infringement?
a. No. The reproduction is consistent with fair use.
b. Yes. Only the National Library is allowed to reproduce books and other works.
c. No. The copy of the Journal is marked “For Room Use Only” and is therefore
not made available to the public outside of the Library.
d. Yes. The law only allows a library to photocopy a book if it is fragile or rare.
37. Which among the following is not a function of the Bangko Sentral ng Pilipinas?
a. As official depositary of the Philippine government.
b. As financial adviser of the Philippine government.
c. As fiscal agent of the Philippine government.
d. As the watchdog of government funds.
38. XXX Bank Corporation and ZZZ Corporation were merged into XX ZZ Bank Corporation. So as not
to create any unnecessary conflict, all the former directors of both banks wanted to be
appointed /elected as members of the Board of Directors of the merged bank. Each bank used
to have eleven (11) members of the board. The maximum number of directors of the merged
bank is
a. 15;
b. 22;
c. 21;
d. 11.
39. All senior officers of ABC Bank are entitled to obtain a housing loan. X is an Executive Vice
President for Operations of ABC Bank. She obtained a housing loan with the ABC Bank. Which
statement is most accurate?
a. The housing loan of X requires a guarantor from somebody who is not connected with the
bank.
b. The housing loan of X requires the approval of the Board of Directors of the bank.
c. The housing loan of X, being a benefit for employees, does not require (a) but will require
(b).
d. The housing loan of X, being a benefit for employees, will not require (a) and (b).
40. ABC Holdings Company, a Hong Kong company, owns 10% of XYZ Bank. Because of the peace
and order situation in the Philippines, ABC Holding Company wanted to sell its shareholdings in
XYZ Bank. Unfortunately, nobody is interested to buy a 1 0% shareholdings in a bank. The board
of directors of XYZ Bank thought that it would be a good idea to buy back the shares owned by
ABC Holding Company. Which statement is most accurate?
a. Buying back the shares by XYZ Bank is absolutely not allowed.
b. Buying back the shares may be allowed provided it is with the approval of the Monetary
Board and disposed of within six (6) months.
c. Buying back the shares may be allowed provided such shares 'will be disposed of within ten
(1 0) years.

6|Page
 d. Buying back the shares may be done anytime provided the Board of Directors will approve
the same.
41. May a publicly listed universal bank own 100% of the voting stocks in another universal bank
and in a commercial bank?
a. Yes, if with the permission of the Bangko Sentral ng Pilipinas.
b. No, since it has no power to invest in equities.
c. Yes, as there is no prohibition on it.
d. No, since under the law, the 100% ownership on voting stocks must be in either bank only.
42. Under the Intellectual Property Code, lectures, sermons, addresses or dissertations prepared for
oral delivery, whether or not reduced in writing or other material forms, are regarded as
a. Non-original works.
b. Original works.
c. Derivative works.
d. Not subject to protection.
43. Which of the following is an exception to the secrecy of bank deposits which are in Philippine
Pesos, but NOT an exception to the secrecy of foreign currency deposits?
a. Upon Bangko Sentral ng Pilipinas (SSP) inquiry into or examination of deposits or
investments with any bank, when the inquiry or examination is made in the course of the
SSP's periodic special examination of said bank to ensure compliance with the Anti-Money
Laundering Act (AMLA);
b. Upon Philippine Deposit Insurance Corporation (PDIC) and SSP inquiry into and examination
of deposit accounts in case there is a finding of unsafe or unsound banking practice;
c. Upon inquiry in cases of impeachment;
d. Upon inquiry by the Commissioner of Internal Revenue in the event a taxpayer files an
application to compromise his tax liabilities on the ground of financial incapacity.
44. The Anti-Money Laundering Law is a law that seeks to prevent money laundering activities by
providing for more transparency in the Philippine Financial System, hence the following
institutions are covered by the law, except:
a. Bank and any financial institutions;
b. Pawnshops;
c. Casino operators;
d. All of the above.
45. For purposes of determining violation of the provisions of Anti-Money Laundering Law, a
transaction is considered as a "Suspicious Transaction" with "Covered Institutions" regardless of
the amount involved, where which the following circumstances exist/s?
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.
46. X works as a research computer engineer with the Institute of Computer Technology, a
government agency. When not busy with his work, but during office hours, he developed a
software program for law firms that will allow efficient monitoring of the cases, which software
program is not at all related to his work. Assuming the program is patentable, who has the right
over the patent?
a. X;
b. Institute of Computer Technology;
c. Neither X nor the Institute of Computer Technology can claim patent right over the
invention;
d. X and the employer of X will jointly have the rights over the patent.
47. The "test of dominancy" in the Law on Trademarks, is a way to determine whether there exists
an infringement of a trademark by -
a. Determining if the use of the mark has been dominant in the market.
b. Focusing on the similarity of the prevalent features of the competing marks which might
create confusion.
c. Looking at the mark whether they are similar in size, form or color.
d. Looking at the mark whether there is one specific feature that is dominant.
48. Compulsory Licensing of Inventions which are duly patented may be dispensed with or will be
allowed exploitation even without agreement of the patent owner under certain circumstances,

7|Page
 like national emergency, for reason of public interest, like national security, etc. The person who
can grant such authority is -
a. the Director General of the Intellectual Property Office;
b. the Director of Legal Affairs of the Intellectual Property Office;
c. the owner of the Patent right;
d. Any agent of the owner of the Patent right.
49. The Fair Use Doctrine allows others to utilize copyrighted works under certain conditions. The
factors to consider whether use is fair or not would be the purpose and character of the use,
nature of the copyrighted work, amount and substantiality of the portions used, and what else?
a. Effect of the use upon the creator of the work.
b. Effect of the use upon the potential market of the work.
c. Effect of the use upon the public in general.
d. Effect of the use upon the class in which the creator belongs.
50. XYZ Corporation bought ten (1 0) units of Honda Civic from CCC Corporation. ABC Bank granted
a loan to XYC Corporation which executed a financing agreement which provided for the
principal amount, the installment payments, the interest rates and the due dates. On due dates
of the installment payments, XYZ Corporation was asked to pay for some handling charges and
other fees which were not mentioned in the Financing Agreement. Can XYC Corporation refuse
to pay the same?
a. No, because handling charges and other fees are usual in certain banking transactions.
b. Yes, because ABC Bank is required to provide XYZ Corporation not only the amount of the
monthly installments but also the details of the finance charges as required by the Truth in
Lending Act.
c. No, because the Finance Agreement is a valid document to establish the existence of the
obligation.
d. Yes, because legally, finance charges are never allowed in any banking transaction.
ajmiranda
------END-----
Goodluck and Godbless

Reviewed and Checked by:

Dr. Genoveva Y. Reyes, CPA, FRIAcc

Dean, College of Business Education

8|Page