● CONTRIBUTED TEST QUESTIONS FOR INCOME TAX FOR PRE

● -
● FINAL EXAM
● 1. A corporation organized and created under the laws of a foreign country and is authorized to do business/ trade in the
● Philippines is?
● A. Domestic corporation
● B. Resident foreign
● corporation
● C. Non
● -
● resident foreign corporation
● D. General co
● -
● partnership
● 2. The net share received by a partner in a general professional partnership is
● A. Part of his taxable income
● B. Exempt from income tax
● C. Subject to corporate tax
● D. Subject
● to final tax
● 3. Which of the following is not correct? The gross income tax
● A. Is optional to qualified corporation
● B. Is available if the ration of costs of sales to gross sales or receipts from all sources does not exceed 55%.
● C. Shall be irrevocabl
● e for three consecutive taxable years that the corporation is qualified under the scheme.
● D. Is compared with the normal income tax and minimum corporate income tax.
● 4.
● Statement 1:
● A CPA and a dentist may form a GPP or an ordinary partnership.
● Statem
● ent 2:
● Partnership and corporations have separate juridical personalities distinct from the owners, as such
● partners and stockholders are not liable to creditors of business.
● A. True; true
● B. False, false
● C. False, true
● D. True, false
● 5. AB partners
● hip with A and B as partners had a net professional income amounting to Php 500,000.00 Its other
● income included bank interest income of Php 8,000.00 net of final withholding tax and it received dividend
● income from a domestic corporation of Php 10,000.
● 00 A single and has compensation incme of Php 200,000.00.
● The net taxable income of A who share profit and loss equally with B is ?
● A. Php 364,000.00
● B. Php 440,000.00
● C. Php 400,000.00
● D. Php 444,000.00
● 6. It is a commercial undertaking by 2 or more persons differing from a partnership in that it relates to the disposition of
● a single lot of goods or the completion of a single project.
● A. Business partnership B. joint accounts
● C
● . Joint stock companies
● D. Joint ventures
● 7. It means all direct costs and expenses necessarily incurred to provide the services required by the customers and
● Clients..
● A. Cost of goods sold
● B. Cost of goods manufactured
● C. Cost of Services
● D
● . Gross income
● 8. Special corporation is/are subject to what taxes?
● A. Special tax base
● B. Preferential tax rate
● C. Both A and B
● D. None of both
● 9. What percentage of final withholding tax that shall be imposed on income derived by Offshore Banking
● Units?
● A. 10% on its gross Philippine billing
● B. 10% base on gross amount
● C. 10% of any profit remitted by the Philippine branch of foreign corporation
● D. 10% of gross rentals
● 10. A/An ____ doing businesses in the Philippines shall pay a tax of 2.5% of
● its gross Philippine billings.
● A. Branch profit remittances
● B. International Carrier
● C. Offshore banking units
● D. Regional area headquarters and regional operating headquarters of multinational companies.
● 11.
● True or False
● . The interest income derived
● by a domestic corporation from a depository bank under the expanded
● foreign currency deposit system shall not be subject to any final tax rate.
● 12.Which of the following is subject to income tax?
● A. Partnership formed for the practice of profession
● B.
● Co
● -
● ownership
● C. Unregistered partnership
● D.
● Joint venture formed for the purpose of undertaking construction project
● under a service contract with the gov’t
● 13. Rent income earned from an apartment located in Kab. City, Philippines is
● A. Income
● within
● B. Income without
● C. Expense within
● D. Expense without
● 14. Which of the following is an example of a capital asset?
● A. Fixtures used in a retail store
● B. Lands for sale held by a real estate dealer
● C. Agricultureal land used by the owne
● r for his farming business
● D. Land with undetermined use
● 15.
● True or False
● : To be classified as a capital asset, the property mush never be used for business.
● 16. Which of the following is not an ordinary asset?
● A. Stock in trade or other property
● B. Pr
● operty primarily for sale to customers.
● C. Personal property used in business.
● D. All are examples of ordinary assets.
● 17. Statement 1: To have a capital gain, one must sell or exchange the capital asset for an amount more than its cost.
● Statement
● 2: to have a capital loss, one must sell or exchange the capital asset for an amount more than its cost.
● A. True; true
● B. False; false
● C. True; false
● D. False; true
● 18.
● True or false
● : wash sale is a sale of securities where substantially identical se
● curities are acquired or purchased
● within a ninety (90) day period beginning thirty (30) days before the sale and ending thirty (30)days after the
● sale.
●