Quiz No.

1. Savant pertains to exceptionally knowledgeable person. – True

2. Horizontal equity requires consideration of the circumstances of the taxpayer – True
3. The government should tax itself- False
4. Taxpayer under the same circumstance should be taxed differently – False
5. The reciprocal duty of support between the government and the people underscores the basis of taxation
– True
6. Doctrine of estoppel states that the courts cannot issue injunction against the government’s effort to
collect taxes – False Lifeblood Doctrine.
7. The Constitutional exemption of non-stock, non-profit educational institution refers to property tax only.
False – Property and Income Tax
8. Taxes that cannot be shifted by the statutory taxpayer are referred to as direct tax – True
9. Documentary stamp tax is a local tax. False – National
10. Revenue Regulations are issuances that publish pertinent and applicable portions, as well as
amplifications, of laws, rules, regulations and precedents issued by the BIR and other agencies/offices. –
False – RMC
11. Applying tax benefit rule, if the Company wrote off receivable in taxable year 1 amounted to 100 and
recover the same in the following taxable year (year 2) amounting to 80, recoveries will be taxable in full
in year 2. True
12. Estate tax is imposed on properties transferred with donative intent – False – Donor’s tax
13. Donor’s tax rate is schedular or progressive – False fixed rate of 6% in excess of 250k
14. Based on ability to pay principle, if A corporation and B Corporation reported gross income of 500 in the
taxable year and allowable deduction amounted to 200 and 100, respectively. B Corporation will pay
more income tax than A- True (300 vs 400 TNI).
15. A is an individual who has capital assets amounting 300 in his books (held for 3 years). The said asset was
sold in cash for 200 during the taxable year. A reported capital gain amounted 500. The amount of capital
loss that is deductible against capital gain is 200. False, 50 (50% of 100) since held for more than 12
months.
16. Expanded withholding tax is also an income tax. True.
17. B Corporation reported investment held at fair value through profit or loss in the beginning of the taxable
year amounting to 500. During the year, the fair value of the said investment is 550, hence, B Corporation
reported a gain amounted to 50. For income tax purposes, the said gain is taxable to be reported in the
Company’s ITR. False since unrealized.
18. C Co. and D Co. enter a supply contract in year 1. The contract states that in the event that D Co. cannot
provide the stipulated amount of supply to C Co., D Co. will pay C Co. within 60 days. During December of
Year 5, D Co. failed to provide supply to C Co. For taxable year ending December 31, Year 5 of C Co., the
income from D is taxable. True since at yearend, C has the legal right of claim already.
19. For purchase of services, official receipt is sufficient evidence to claim input VAT. True
20. Only input tax attributable exempt sales can be refunded. False should zero-rated sales
21. Deferred tax assets arises from future taxable amount – False FDA
22. Seafarers’ income from outside the Philippines is taxable since he is considered as resident citizen. False –
NRC treatment.
23. Professional tax is a local tax. True
24. All debt instruments is subject to DST. True
25. E Corporation is a manufacturing pharmaceutical company. In its audited financial statements, the
Company reported machineries under Plant, Property and Equipment. If the Company elected to sale such
asset and realized a gain, such gain is considered as capital gain. False. Ordinary gain since used in its
operation.