Question 1
A bill of exchange drawn on a bank and payable on demand is called a
Correct Answer:
Check
Explanation:
A check is a bill of exchange drawn on a bank and payable on demand. In negotiable instruments, a bill of exchange is an order to pay money; when that order is directed to a bank and payment is required immediately on demand, it becomes a check. This distinguishes it from a bill of lading, which is a document of title for goods; from a treasury bill, which is a government debt instrument with a fixed maturity; and from a generic “domestic bill,” which doesn’t specify the essential feature of being drawn on a bank for immediate payment.
Question 2
The following are the remedies of the creditor to pursue against the debtor, except
Correct Answer:
Compel the debtor to perform the service in obligations to do
Explanation:
The main idea is that creditors have tools that reach the debtor’s assets or rights, or that undo steps aimed at shielding those assets. Attacking property owned and in the debtor’s possession is a direct enforcement method: you attach or seize assets to satisfy the debt. Accion subrogatoria lets the creditor step into the debtor’s rights against third parties who owe the debtor money or performance, enabling recovery from those sources to satisfy the claim. Accion pauliana is used to counteract transfers or acts by the debtor intended to defraud or prejudice creditors, allowing the creditor to set aside such dispositions so assets remain available for payment. Compelling the debtor to perform a service, while a form of enforcement in contract law, is not treated here as a creditor remedy aimed at recovering the debt through the debtor’s assets or through third-party obligations. In this context, the standard creditor remedies focus on asset recovery, rights against third parties, or undoing transfer of assets, rather than personal performance of services by the debtor. Therefore, this option does not fit with the others.
Question 3
Which member in a cooperative may invest in the common stocks of the cooperative?
Correct Answer:
Regular member
Explanation:
Regular membership is the status that gives full ownership rights in a cooperative, including the ability to invest in its capital through common stock. The common stock represents ownership and voting interest in the cooperative, and only those who are fully admitted members have the authority and obligation to subscribe to and hold that stock. Other categories—provisional, associate, or temporary members—are granted restricted rights and typically cannot own common stock or participate in governance through ownership. They may have patronage rights or other limited privileges, but not the capital stock that signifies full ownership. So, the member who may invest in the common stocks is the regular member.
Question 4
Who may call on the SEC to appoint a trustee when there is no BOD/BOT?
Correct Answer:
Creditors may ask the SEC to appoint them as trustee
Explanation:
When there is no board or governance body to run the company, a neutral manager is needed to protect assets and keep affairs orderly. The law gives the SEC the authority to appoint a trustee (a receiver or manager) to take charge in this situation. Creditors have standing to seek this intervention because they have a financial stake in the company and a strong interest in preserving the estate and ensuring that obligations are handled properly. A petition from creditors helps ensure there is someone capable and independent to manage the company’s affairs, collect assets, and oversee liquidation or rehabilitation if needed. This arrangement aims to prevent mismanagement and safeguard the interests of those owed money, which is why creditors may ask the SEC to appoint them as trustee.
Question 5
A debt is secured by a collateral but the creditor accepts it as payment in kind. This results in the loan being extinguished regardless of collateral value.
Correct Answer:
True, always.
Explanation:
When a secured debt is settled by offering the collateral in place of cash and the creditor accepts it as full satisfaction, the obligation is extinguished. The creditor’s acceptance acts as a complete discharge of the loan, so the debt ends even if the collateral’s value doesn’t match the outstanding balance. This is because the agreement to accept the collateral in full satisfaction removes the debtor’s liability and releases the security interest. The other ideas aren’t correct here: you don’t need equal value for the debt to be extinguished, because the acceptance of the collateral as full satisfaction is itself the discharge. The creditor’s acceptance already serves as the necessary agreement to settle the debt, so extra conditions about the creditor approving aren’t required. And the loan’s term (short-term vs long-term) doesn’t change this principle.
Question 1
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Prepare with the Regulatory Framework for Business Transactions (RFBT) CEGG Practice Exam practice quiz. This question bank includes 10 questions covering collateral, loan, creditor, cooperative, and trustee. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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Regulatory Framework for Business Transactions (RFBT) CEGG Practice Exam

This practice set contains 10 questions from the matching question bank and focuses on collateral, loan, creditor, cooperative, and trustee. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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