FINAL EXAM TAXATION 101

Total points19/40
 
 
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RAMOS, ROSELLE B
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SATURDAY 8:00 - 12:00
1. Which of the following is not a scheme of shifting the incidence
of taxation?
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a. The manufacturer transfers the tax to the consumer by adding the
tax to the selling price of the goods sold
b. The purchaser asks for a discount or refuses to buy at regular
prices unless it is reduced by the amount equal to the tax he will
pay
c. Changing the terms of the sale like FOB shipping point in the
Philippines to FOB destination abroad, so that the title passes
abroad instead in the Philippines
d. The manufacturer transfers the sales tax to the distributor, then
in turn to the wholesaler to the retailer and finally to the
consumerOption 4

2. Which of the following distinguishes tax from license fee?

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a. Non-payment does not necessarily render the business illegal
b. A regulatory measure
c. Imposed in the exercise of police power
d. Limited to cover most of regulation

3. Value added tax, as to rate in an example of

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a. Graduated tax
b. Progressive tax
c. Regressive tax
d. Proportional tax

4. This is a demand of ownership

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a. License fee
b. Tax
Toll
Franchise

`5. Mrs. Mary Ann de Vera had recently joined the Mindanao
Merchandising Corporation as sales executive. She was advised to be
retrenched because the company was losing heavily, but that she would
be given a substantial separation pay. The general manager, however,
suggested to Mrs. De Vera to file a letter of resignation from the
company, instead of having been involuntarily separated as the latter
would have implications of inefficiency of Mrs. De Vera’s part. Mrs.
De Vera chose to resign from the company and received the sum of
P100,000 as separation pay. The above amount is.
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a. Exempt from income tax
b. Taxable in full
c. Non-Deductible for the company
d. Partially taxable

6. Which of the following is a taxable income?

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a. Income from qualified pension plan
b. Compensation for personal injuries
c. Moral damages
d. Interest on moral damages

7. One of the following individuals is not required to file an income

tax return?
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a. An individual who derives compensation from two or more emploers
at any time during the taxable year
b. An individual who has mixed income
c. An individual whose gross income from the year does not exceed
P60,000 of such was reduced by withholding tax
d. An individual whose gross business income does not exceed P60,000

8. A feature of ordinary gains as distinguished from capital gains

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a. Gains from sales of assets not stock in trade
b. May or may not be taxable in full
c. Sources are capital assets
d. No holding period

9. A privilege granted to taxpayer to deduct or set-off against

Philippine income tax the income war-profits and excess profits taxes
that he has paid or has accrued in a foreign country.
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a. Tax exemption
b. Tax consolidation
c. Tax deduction
d. Tax credit

10. An exemption provided by law to take care of personal, living and

family expenses of the taxpayers and the amount of which is
determined according to the status of the taxpayers is:
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a. Optional standard deduction
b. Personal exemption
c. Special additional personal exemption
d. Additional exemption
11. Which of the following is a deductible expense?
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a. Insurance paid by the employer for the life insurance of its
employees
b. Employees contribution to the Christmas fund of its employees
c. Contributions to government priority activities
d. All of the above

12. For income tax purposes, which of the following is considered

head of the family?
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a. Married individual who has a dependent minor child
b. Married, but legally separated individual, with a dependent minor
brother
c. Single individual with a recognized illegitimate child
d. Single individual with dependent minor siblings living abroad

13. On September 15, 2019, Cristy Guadiz sold a lot (capital asset)
to Ivy Sta. Cruz for P1,000,000, which requires payment of P200,000
downpayment and balance payable in 10 equal semi-annual installments,
the 1st installment payable in December 15, 2001. the cost of the lot
amounted to P700,000. the income tax payable of Guadiz is:
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a. P60,000
b. 200,000
c. P300,000
d. 280,000

14. Interest on business is deductible for income tax purposes.

However, one of the following is not deductible
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a. Interest on delinquent tax
b. Interest on indebtedness is incurred to purchase delivery
equipment
c. Interest on indebtedness secured to purchase a tax exempt security
d. None of the above

15. An ordinary and necessary expense which is fully documented and

supported by receipts may be fully deducted for income tax purposes
over and above the limit set by law:
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a. Medical expense
b. Contribution
c. Representation
d. High School fee

16. Valroz Corporation took two life insurance policies on the life
of its Executive Vice President, Mrs. Maribelli Ali. In one policy,
the beneficiary is the corporation and the other, designates Mr.
Oliver Ali, the EVP’s husband, as revocable beneficiary. The
insurance premium paid by Valrox Corporation is
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a. Tax deductible only in so far as the first policy is concerned
b. Tax deductible for both policies
c. Not tax deductible for both policies
d. First policy is not deductible, second policy is deductible

17. A fundamental rule in taxation is that the property of one

country may not be taxed by another country. This is known as
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a. International law
b. International comity
c. Reciprocity
d. International inhibition

18. If a stockholder receives a taxable stock dividend, what is the

measure of income applicable to him?
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a. Par value of the shares on the date he receives them
b. Fair market value of the shares on the date of declaration
c. The adjusted cost of the old shares and the new shares of the
corporation
d. The book value of the shares of the preceding calendar year

19. One of the following is a taxable income

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a. Income from a qualified pension plan
b. Compensation for personal injuries
c. Stock dividend received
d. None of the above

20. If an individual performs services for a creditor who in

consideration therof cancels the debt, the cancellation of the
indebtedness may amount to a
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a. Gift
b. Capital contribution
c. donation inter vivos
d. payment of income

21. Each partner shall report as gross income his distributive share,
actually or constructively received in the net income of the
partnership. The share of a partner shall be subjected to a final
withholding tax of
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a. 5%
b. 20%
c. 32%
d. 10%
22. Which of the following dependents does not qualify a taxpayer for
an additional exemption
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a. Recognized natural son who celebrated his 21st birthday during the
taxable year
b. Son who is 25 years old, unmarried but incapable of self support
due to mental defect
c. Minor son who got employment in the previous taxable year
d. Minor son who died December 31, of the taxable year

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a. Excess tax credit of P12,500

b. Tax payable of P7,500
c. Excess tax credit of P7,500
d. Tax payable of P2,500

24. A resident international carrier has the following data for the
current year: Gross income of P700,000 and expenses of P200,000 from
the Philippines; Gross income of P500,000 and expenses of P100,000
from Hongkong. How much is the corporation tax payable?
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a. 288,000
b. 17,500
c. 160,000
d. 30,000

25. A non-resident alien doing business in the Philippines is one who

is/shall:
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a. An individual whose father or mother is engaged in business in the
Philippines
b. An individual who is naturalized on accordance with law
c. An individual whose residence is within the Philippines and who is
not a citizen thereof
d. Come to the Philippines and stay therein for an aggregate period
of more than 180 days during the calendar year

26. In December 20x0, Nina purchased a new residence by P2,000,000.

During that same year she sold her former residence for P800,000 and
paid the realtor a P50,000 in year 20x1. What amount of gain is
recognized from the sale of the former residence on Sansano’s income
tax return?
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a. 15,000
b. 10,000
C. 5,000
d. 0

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a. 151,000
b. 149,000
c. 141,000
d. 139,000

28. Mr. John Asuncion purchased a real property as capital asset, On

November 1, 20x0 for P300,000 which he subsequently mortgaged for
P100,000. On December 1, 20x0 he sold the property for P600,000 with
the vendee assuming the mortgage. Payment of P125,000 down payment
upon contract signing shall be made, P250,000 shall be paid On or
before December 20x1 and P125,000 on or before December 1, 20x2. What
is the capital gains tax of Mr. Asuncion for the year 20x0
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a. 7,500
b. 9,000
c. 4,000
d. 16,200

29. What is the capital gains tax to be reported by Mr. Asuncion for
the year 20x1?
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a. 18,000
b. 15,000
c. 8,000
d. 32,400

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a. 289,000
b. 319,100
c. 365,200
d. 370,300

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31. How much is the correct net taxable income for the year subject
to normal tax rate to be reported in the income tax return?
a. 303,145
b. 319,100
c. 290,100
d. 213,100

32. How much is the partnership’s total income tax expense for the
year 20x1 activities?
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a. 63,286
b. 101,535
c. 106,355
d. 106,100
33. The final withholding tax on interest income from long term
deposit or investment which was pre terminated before the fifth year
if the holding period is 3 years to 4 years.
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a. 5%
b. 10%
c. 12%
d. 20%

34. As regards taxable year, one of the following statements is not

correct
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a. The taxable year is the accounting period
b. The taxable year maybe less than 12 months
c. The taxable year of the sole proprietorship business maybe fiscal
or calendar year
d. The taxable year of a domestic corporation maybe fiscal or
calendar year

35. Who is a non-resident alien not engage in business in the

Philippines?
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a. A alien who comes to the Philippines for a definite purpose which
in its nature maybe promptly accomplished
b. An alien who comes to the Phil. For definite purpose which in its
nature would require an extended stay of more than 180 days
c. An alien who has acquired residence in the Phil.
d. An alien who live in the Philippines with no definite intention to
his stay.

36. On January 1, 20x0, A leased his vacant lot for a period of 12

years at P240,000 per year. It was agreed that the lessee will pay
the following: a. Rent of P480,000 (for 20x0 and 20x1)b. Security
Deposit of P240,000c. Real property tax at P20,000/yearThe lease
contract provides among others that the lessee will construct a 3-
storey building for parking purposes at a cost of P3,600,000 which
shall belong to the lessor upon expiration or termination of the
lease. The building was completed on July 1, 20x0, with an estimated
useful life of 15 years. A shall report for the year 2008, using the
spread out method, a total income from lease of
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a. 296,543
b. 573,087
c. 536,521
d. 333,087

37. Using the above data, the lessee in 20x0 can deduct total
expenses amounting to:
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a. 656,521
b. 553,043
c. 416,521
d. 573,043

38. A insured his life for P10,000,000. In case A dies, the proceeds
of the life insurance shall be:
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a. Excluded from gross estate if the beneficiary is the estate,
executor or administrator whether revocable or irrevocable
b. Part of gross income if the beneficiary is a third person and the
designation is revocable
c. Part of the gross estate if the beneficiary is a third person and
the designation is irrevocable
d. Excluded from gross income whether beneficiary is revocable or
irrevocable

39. Optional Standard SDeduction

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a. Is equal to 40% of the gross income from business or practice of
profession
b. Cannot be used as deduction from compensation income
c. Maybe availed by all individual taxpayers
d. Maybe availed of by the taxpayer whether or not he signifies his
desire to elect optional standard deduction

50. An individual taxpayer, single has the following data for the
current year:Ordinary Income, P150,000; Long term capital gain,
P40,000; Short term capital gain, P10,000 How much is the net taxable
income
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A, P180,000
b. P160,000
c. P140,000
d. 110,000

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