Final Examination Income Taxation

3/12/2021 Term Exam Income taxation
Term Exam Income taxation
1. It is the privilege of not being imposed a financial obligation to which others

are subject.
(1 Point)
Tax incentive
Tax exemption
Tax amnesty
Tax credit
2. It literally means “place of taxation”; the country that has the power and
jurisdiction to levy
and collect the tax.
(1 Point)
Basis of taxation
Situs of taxation
Scope of taxation
Theory of taxation
3. Statement 1. A person , refuse to pay on the ground that he will not receive a
benefit from the tax.
Statement 2. A person may not refuse to pay a tax on the ground that it is
confiscatory of his proerty.
(1 Point)
The first statement is true while the second statement is false;
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The first statement is false while the second statement is true:
Both statements are true;
Both statements are false.
4. Which of the following statements is incorrect with respect to the power of the
president?
(1 Point)
Congress may authorize the president to fix withing specified limits tariff rates, import
and export quotas, tonnage and wharfage dues, and other duties or imports within the
framework of the national development program of the government.
The president can veto any particular item in a reveue or tariff bill, but the veto shall
not affect the items or items which he does not object.
The power of taxation can be delegated to the President of the Philippines.
The President of the Philippines is empowered to grant tax exemption on certain class
of taxpayers.
5. Which is an inherent limitation?

(1 Point)
Due process
uniformity in taxation
territoriality rule
Equality in taxation
6. Mr. Jose Castillo is a resident Filipino citizen. He purchased a parcel of land in

Makati City in 1970 at a consideration of P1 Million. In 2011, the land, which
remained undeveloped and idle had a fair market value of P20 Million. Mr.
Antonio Ayala, another Filipino citizen, is very much interested in the property
and he offered to buy the same for P20 Million. The Assessor of Makati City re-
assessed in 2011 the property at P10 Million.
Is Mr. Castillo liable for income tax in 2011 based on the offer to buy by Mr.
Ayala? Explain your answer
(5 Points)
No. He is not liable for income tax in 2011 because during that year no income was realized b
7. Taxation as distinguished from police power and power of eminent domain.

(1 Point)
Property is taken to promote the general welfare.
Maybe exercised only by the government.
Operates upon the whole citizenry.
There is generally no limit as to the amount that may be imposed.
8. Which is not a legislative act?

(1 Point)
Assessment of the tax
Setting the amount of tax
Determination of the subject of the tax
Determining the purpose of the tax
9. Which of the following may not raise money for the government?
(1 Point)
Power of taxation
Police power
Power of eminent domain
Privatization of government’s capital assets
10. Which of the following is not a determinant of the place of taxation?

(1 Point)
Source of the income
Citizenship of the taxpayer
Residence of the taxpayer
Amount of tax to be imposed
11. Income tax may be imposed for the following purposes, exempt
(1 Point)
To provide large amounts of revenues
To limit corruption
To offset regressive sales and consumption taxes
To mitigate the evils arising from the inequalities in the distribution of income and
wealth
12. Transfers for insufficient consideration are subject to

(1 Point)
Income tax
Transfer tax
Either a or b
Both a and b
13. It is the power of the State to enact such laws in relation to persons and
property as may promote public health, public morals, public safety and
general welfare of the people.
(1 Point)
Taxation
Police power
None of the choices
14. It is also known as tax dodging.

(1 Point)
Tax exemption
Tax evasion
Tax avoidance
Transformation
15. Which is specifically exempted from income taxation by virtue of legal

exemptions?
(1 Point)
Minimum wage
Gain on sale of prohibited drugs
Unrealized gain
All of these
16. True or False.

Accounting periods are calendar and fiscal.
(1 Point)
True
False
17. True or False.

There are three types of assets for purposes of taxation.
(1 Point)
False
True
18. An escape from taxation where the tax burden is transferred by the one on
whom the tax is
imposed or assessed to another.
(1 Point)
Shifting
Exemption
Transformation
Capitalization
19. A fundamental rule in taxation is that “ the property of one country may not be
taxed by another country”. This is known as
(1 Point)
International Law
International Comity
Reciprocity
International inhibition
20. Which is considered in the exercise of eminent domain?

(1 Point)
A. Public use
B. Just compensation
C. Either A or B
D. Neither A nor B
21. A tax must be imposed for public purpose. Which of the following is not a
public purpose?
(1 Point)
National defense
Public education
Improvement of the sugar and coconut industries.
Improvement of a subdivision road.
22. Which theory in taxation states that without taxes, a government would be
paralyzed for lack of power to activate and operate it, resulting in its
destruction?
(1 Point)
Power to destroy doctrine
Lifeblood doctrine
Sumptuary doctrine
Symbiotic doctrine
23. True or False.

The three tax schemes are mutually exclusive in coverage.
(1 Point)
True
False
24. Which of the following is exempted from income taxation because of the
absence of ability to pay?
(1 Point)
Damages received from patent infringement suit
Unrealized income from investments
Gain on sale of goods
Inheritance
25. What is your Section *
MAR - 191
26. This requires that all subjects or objects of taxation, similarly situated are to be
treated alike or put on equal footing both in privileges and liabilities.
(1 Point)
Due process
Uniformity
Progressive taxation
None of the above
27. What is you name *
Danica V. Caillo
28. True or False.

Accrual basis and cash basis are the most common accounting methods used
in practice.
(1 Point)
True
False
29. Which of the following powers is inherent or co-existent with the creation of
the government?
(1 Point)
Police power
Eminent domain
Taxation
All of these
30. The power to regulate liberty and property to promote the general welfare.
(1 Point)
Power of taxation
Police power
Power of recall
31. Which of the following constitutes taxable income?

(1 Point)
Return on premium on life insurance received by the insured
Moral damages received from slander
Proceeds of crop insurance
Compensation for personal injury
32. Taxes must be for public purpose means that:

(1 Point)
Taxes must be raised from the public;
Taxes should be used for recognized public needs benefiting a community;
Power of taxation should government be exercised by the legislature;
Relationship of the government and the governed must be transparent and

democratic.
33. They exist independent of the constitution being fundamental powers of the
state, except
(1 Point)
Power of taxation
Police power
Power of recall
34. An example of a tax where the concept of progressivity finds application is the
(1 Point)
income tax on individuals.
excise tax on petroleum products.
value-added tax on certain articles.
amusement tax on boxing exhibitions.
35. Which of the following has no power of taxation?

(1 Point)
Provinces
Cities
Barangays
Barrios
36. Which escape from taxation does not result in loss of revenue to the
government?
(1 Point)
Tax evasion
Tax avoidance
Tax exemption
Shifting
37. It is the power of the State to enact such laws in relation to persons and
property as may promote public health, public morals, public safety and
general welfare of the people.
(1 Point)
Taxation
Police power
None of the choices
38. The reciprocal duties of support and protection between the people and the
government.
(1 Point)
Basis of taxation
Situs of taxation
Scope of taxation
Theory of taxation
39. In every case of doubt, tax statutes are construed

(1 Point)
Strictly against the government and the taxpayer.
Liberally in favor of the government and the taxpayer.
Strictly against the government and liberally in favor of the taxpayer.
Liberally in favor of the government and strictly against the taxpayer.
40. Taxes must be for public purpose means that:

(1 Point)
Taxes must be raised from the public;
Taxes should be used for recognized public needs benefiting a community;
Power of taxation should government be exercised by the legislature;
Relationship of the government and the governed must be transparent and

democratic.
41. This is an inherent limitation on the power of taxation.

(1 Point)
Rule on uniformity and equity in taxation.
Due process of law and equal protection of the laws.
Non-impairment of the jurisdiction of the Supreme Court in tax cases.
Tax must be for the public purpose.
42. True or False

Final tax generally covers passive income.
(1 Point)
True
False
43. Which of the following statements is correct?

(1 Point)
The President is authorized to increase or decrease national internal revenue tax rates.
One of the nature of taxation is the reciprocal duties of protection and support
between the state and subjects thereof.
Every sovereign government has the inherent power to tax.
Income tax in an indirect tax.
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3/12/2021 Term Exam Income taxation

Term Exam Income taxation

1. It is the privilege of not being imposed a financial obligation to which others

The first statement is true while the second statement is false;

The first statement is false while the second statement is true:

Both statements are true;

Both statements are false.

The power of taxation can be delegated to the President of the Philippines.

5. Which is an inherent limitation?

6. Mr. Jose Castillo is a resident Filipino citizen. He purchased a parcel of land in

7. Taxation as distinguished from police power and power of eminent domain.

Property is taken to promote the general welfare.

Maybe exercised only by the government.

Operates upon the whole citizenry.

There is generally no limit as to the amount that may be imposed.

8. Which is not a legislative act?

Assessment of the tax

Setting the amount of tax

Determination of the subject of the tax

Determining the purpose of the tax

Power of eminent domain

Privatization of government’s capital assets

10. Which of the following is not a determinant of the place of taxation?

Source of the income

Citizenship of the taxpayer

Residence of the taxpayer

Amount of tax to be imposed

To provide large amounts of revenues

To offset regressive sales and consumption taxes

12. Transfers for insufficient consideration are subject to

Power of eminent domain

None of the choices

14. It is also known as tax dodging.

15. Which is specifically exempted from income taxation by virtue of legal

Gain on sale of prohibited drugs

16. True or False.

17. True or False.

20. Which is considered in the exercise of eminent domain?

Improvement of the sugar and coconut industries.

Improvement of a subdivision road.

Power to destroy doctrine

23. True or False.

Damages received from patent infringement suit

Unrealized income from investments

Gain on sale of goods

25. What is your Section *

None of the above

27. What is you name *

28. True or False.

Power of eminent domain

31. Which of the following constitutes taxable income?

Return on premium on life insurance received by the insured

Moral damages received from slander

Proceeds of crop insurance

Compensation for personal injury

32. Taxes must be for public purpose means that:

Taxes must be raised from the public;

Taxes should be used for recognized public needs benefiting a community;

Power of taxation should government be exercised by the legislature;

Relationship of the government and the governed must be transparent and

Power of eminent domain

income tax on individuals.

excise tax on petroleum products.

value-added tax on certain articles.