1. Moral- Damages awarded for mental and 22.

Void- When the fulfillment of the condition

physical anguish depends upon the sole will of the debtor, the
2. Liquidated- Damages predetermined conditional obligation shall be
beforehand 23. The following are characteristics of a condition
3. Fraud- insidious words or machinations, A  Future and uncertain
was able to induce B to enter into a contract  May or may not happen
which without them B would not have agreed  Past but unknown
to it. There is: 24. Physical- A kind of loss  when a thing perishes
4. Mora accipiendi- Default on the part of the 25. No, the court is not authorized to fix a period-
creditor  If the obligation does not state a period and no
5. Exemplary- Damages awarded to set an period is intended, can the court fix a period
example 26. Extinguished- If the thing is lost without the
6. When the obligation is to deliver a debtor's fault, what will happen to the
determinate thing and there was a stipulation obligation
as to the liability of the debtor in case of loss 27. Completely perform one of them- When a
due to fortuitous events- There shall be no person is alternatively bound by different
liability for loss due to fortuitous events in prestations, he shall
which one of the following cases.  28. Indivisible- Ma, La and Caz obliged themselves
7. Compensatio morae- Default on the part of to deliver a specific refrigerator to Ganda. In
both parties  this case, the obligation is
8. Demand is not necessary to incur delay when 29. Obligation with a period- When the debtor
Time is the controlling motive binds himself to pay when his means permit
9. Nominal- Damages awarded to vindicate a right him to do so, the obligation shall be deemed to
10. Negligence- Omission of the diligence which is be
required by the circumstances of person, place 30. Before the arrival of the period, Jane believing
and time that the obligation has become due and
11. delay is incorrect- Delay, as a rule, exists, when demandable, paid Yanny. May Jane recovered
the debtor does not perform his obligation on what she has paid to Yanny? Yes, Jane can
the date that it is due. recover her payment for the obligation is not
12. When the obligation does not indicate yet due and demandable and Yanny cannot
whether demand must be made or not on due unjustly enrich herself by retaining the money
date- Demand must be made on the due date received before the arrival of the period
of the obligation in order for delay to exist in 31. Janry can ask for reimbursement from Ferma
one of the following cases.  and Loti- Janry, Ferma and Loti bound
13. Mora solvendi- This happened when the themselves solidarily to pay Ayen the amount of
creditor makes a demand and the obligor fails P 5,000.00. Suppose Janry paid the obligation,
to deliver the thing. what is his right as against his co-debtors?
II. 32. 12,000- H, I, J borrowed P 12,000 from K. The
14. Debtor is not liable because it is no longer due- presumption is that H, I and J are solitarily
In a facultative obligation, what is the effect of liable. How much can K collect from H?
the loss of the principal thing after substitution 33. Demandable- Every obligation whose
15. Civil- Kind of loss in Civil Law when a thing performance does not depend upon future or
disappears in such a way that its existence is uncertain event, or upon a past event unknown
unknown to the parties
16. Both creditor and debtor- When period is 34. 4,000- H, I, J borrowed P 12,000 from K. The
designated, it is presumed to have been presumption is that H, I and J are jointly liable.
established for the benefit of How much can K collect from H?
17. Impossible Condition- Type of condition which 35. Divisible- Da obliged himself to deliver to Ma six
is contrary to good customs or public policy and sacks of rice as follows: Three sacks of rice to be
those prohibited by law shall annul the delivered by Da on May 1st.Another three sacks
obligation which depends upon them. of rice to be delivered by Da on June 1st. This
18. Valid- When a condition is potestative on the illustrates what kind of obligation?
part of the creditor, the obligation is 36. Resolutory- This condition is one the fulfillment
19. Alternative- Until the choice is made and of which will extinguish an obligation (or right)
communicated, the obligation remains already existing.
20. Pure Obligation- one which is not subject to any 37. Seve, debtor, attempts to abscond on his
condition and no specific date is mentioned for obligation to pay Rio, creditor, P 12,000. In this
its fulfillment case, can Seve still make use of the period? No,
21. The right to choose the prestation belongs to Seve cannot make use of the period because
the debtor, however, this right is not absolute. he has already lost every right to make use of
What are these limitations? it by attempting to abscond.
 The debtor has no more right of choice 38. No, her obligation is extinguished- Sheena
when there is only one applicable agreed to deliver a laptop, or an ipad, or a
among the prestations. television to Dinah. Unfortunately, all of them
 The debtor cannot choose impossible are lost due to a fortuitous event. Is Sheena still
and unlawful prestation liable?
 The debtor cannot choose part of one 39. Conditional obligation- one whose
prestation and part of another consequences are subject in one way or another
prestation to the fulfillment of a condition.
40. The condition shall be deemed fulfilled when 56. One debtor and one creditor- Not a requisite of
the obligor voluntarily prevents its fulfillment. cession in payment
41. Judicial Period- period fixed by the court 57. Novation- The substitution or change of an
42. Divisible- An obligation which is capable of obligation by another, which extinguishes or
partial performance. modifies the first
III. 58. Tender of Payment- The act of offering the
43. To proceed against any of the debtors for the creditor what is due him together with a
value of the car plus damages-   A, B and C demand that the creditor accepts the same.
obliged themselves solidarily to D a specific car 59. Payment of Cession- Where a debtor transfers
valued at P240,000. On due date, D demanded all his properties not subject to execution in
delivery but the debtors failed to deliver. The favor of his creditors
next day, while A was still in possession of the 60. Expromission- A owes B P10,000 C, a friend of A
car, it was lost due to a fortuitous event. The approaches B and tells him “ I will pay you what
right of D is A owes you. From now on consider me your
44. There is compensation: A owes B a fountain debtor, not A. A is to be excused. If B agrees,
pen and B owes A also a fountain pen. Both there is
debts are due - Substitution of debtor where the initiative
45. Delegacion- A method of novation caused by comes from a third person
the replacement of the old debtor by a new 61. Remission- A owes B P10,000. When the debt
debtor, where the old debtor has proposed to matured B told A that she need not pay the
the creditor and which replacement has been debt since B is condoning it. A in turn expressed
agreed to by said creditor and by said new her gratitude. The debt has been extinguished
debtor is by
- Substitution of debtor 62. When it is in possession of another person-
46. B should be preferred- A owes B P10,000. With When is there no loss of the thing due?
the consent of A and B, C pays B P5,000. Now B 63. Preparation- The bargaining point of contract,
and C are the creditors of A to the amount of that is, when negotiation is in progress
P5,000 each. Suppose, A has only P5,000. Which 64. Dation in Payment- Where property is
is correct? alienated to the creditor in satisfaction of a debt
47. Personal- Novation which changes the parties in money
to the obligation 65. Real- Novation which changes the object or the
48. The original obligation and the obligation to principal condition of the obligation
deliver the care are both extinguished- A and B 66. Compensation- When two persons in their own
entered into a contract whereby A was to give B right are creditors and debtors of each other
P200,000. Later they novated the contract by 67. Confusion- The meeting in one person of the
stipulating that instead of cash A would give a qualities of creditor and debtor with respect to
particular car. Subsequently the car was the same obligation
destroyed by a fortuitous event. Which is Specific circumstances affecting obligations in
correct? general:
49. Subrogation- The act of putting somebody onto ➢ Grounds to pay damages
the shoes of the creditor enabling him to ➢ Fortuitous Event
exercise all the rights and actions that could ➢ Presumptions
have been exercised by the latter. ➢ Successive rights of the creditor
- The transfer to a third person of all the
➢ Transmissibility of rights
rights appertaining to the creditor including
GROUNDS TO PAY DAMAGES- (Harm done) amount of
the right to proceed against guarantors
money to be recovered
50. Novation- The substitution or change of an
- Delay/Default/ Mora
obligation by another, which extinguishes or
- Fraud/ Deceit/ Dolo
modifies the first, either changing its object or
- Negligence/ Culpa
principal condition or substituting another in
- Contravention of tenor of obligation
the place of the debtor, or subrogating a third
person in right of the creditor
Delay, Default or Mora; Rules (1169)
51. Consignation- The act of depositing the thing
- from the time the oblige judicially or extra judicially
due with the court or judicial authorities
demands from them the fulfillment of their obligation.
whenever the creditor cannot accept or refuses
- the demand by the creditor shall not be necessary in
to accept payment
order that delay may exist.
52. Compensation cannot take place, except- When
Meaning of Delay:
on debt arises from a bank deposit
Ordinary Delay- merely the failure to perform an
53. Merger- A makes a check payable to bearer and
obligation on time.
gives the check to C, who gives it to D who
Legal Delay/Default/Mora- “ “ which failure constitutes
finally gives it to A. The obligation of A is
a breach of the obligation
extinguished by
3 Requisites:
54. Creditor- The expenses of consignation when
-Debtor fails to perform the obli.
properly made, shall be charged against the 
- Creditor demands the performance of the obli.
55. Application of payment- The designation of the
- Debtor still fails to comply with creditors with
debt to which be applied a payment made by a
creditor’s demand
debtor who owes several debts in favor of the
same creditor
 ACCOUNTING one-year insurance policy on June 1 for 1,260.
1. True- Accumulated depreciation is shown as a The adjusting entry on December 31 is
deduction in the cost of the property to arrive 26. False- If the adjustment to recognize expired
at the Net Book Value insurance at the end of the period is
2. True- Accrued expense is a liability inadvertently omitted, the assets at the end of
3. Salvage Value- refers to the amount an asset is the period will be understated.
expected to be sold at the end of its estimated 27. Increases the balance of a liability account- If
useful life the effect of the debit portion of an adjusting
4. False- Accumulated Depreciation is a Liability entry is to increase the balance of an expense
account account, which of the following describes the
5. False- Doubtful Accounts Expense is shown in effect of the credit portion of the entry
the balance sheet
6. True- adjusting entry to record prepaid
expense, using expense method will include a
credit to an expense account
7. True- adjusting entry to record deferred
income, using income method will include a
debit to an income account
8. False- Deferred income is an equity account
9. False- Allowance for doubtful accounts is
deducted from the Accounts receivable in order
to arrive at the Net Book Value
10. False- Depreciation refers to the systematic
allocation of the life of the property over its
cost
11. False- Allowance for doubtful accounts is an
equity account
12. False- Deferred income is an asset account
13. True- Allowance for doubtful accounts is shown
in the Balance Sheet
14. True- Doubtful accounts expense is shown in
the income statement
15. 2,100- Austin, Inc. made a prepaid rent
payment of 2,800 on January 1st. The company’s
monthly rent is 700. The amount of prepaid
rent that would appear on the January 31
balance sheet after adjustment is:
16. Adjust supplies inventory to actual- adjusting
entry: debit supplies expense 420, credit
supplies 420
17. Debit Rent expense, 6k Credit prepaid rent 6k-
The balance in the prepaid rent account before
adjustment at the end of the year is 24000,
which represents 4 months’ rent paid on dec1.
The adjusting entry required on Dec 31 is.
18. False- If the debit portion of an adjusting entry
is to an asset account, then the credit portion
must be to a liability account.
19. 32,000- The unearned rent account has a
balance of 36,000. If 4000 of the 36000 is
unearned at the end of the accounting period,
the amount of the adjusting entry is
20. Expenses understated and therefore net
income overstated – the adjusting entry to
adjust supplies was omitted at the end of the
year. This would affect the income statements
by having
21. The Revenue recognition concept determines
when revenue is credited to a revenue account
22. False- By ignoring and not posting the adjusting
journal entries to the appropriate accounts, net
income will always be overstated.
23. False- Adjusting entries are made at the end of
an accounting period to adjust accounts on the
balance sheet
24. Liabilities- accrued expense is ordinarily
reported on the balance sheet as
25. debit Insurance Expense 735 and credit
Prepaid Insurance 735- A company purchases a