TAXATION

ACTIVITY 2

ANSWER THE FOLLOWING

1. Which is not an excise tax?

a. Income tax
b. Business tax
c. Personal tax
d. Transfer tax

2. Which of the following do not relate to tax ?

a. Does not render business illegal when not paid
b. Arises from law rather than from contracts
c. Intended to cover cost of regulations
d. Intended for public purpose

3. A levy from a property which derives some special benefit from

improvement is
a. Special assessment
b. Eminent domain
c. Taxation
d. Toll

4. A . Government revenue may come from tax, license , toll and

penalties .
B. Penalty may arise either from law or contracts

Which is false ?

a. A only
b. B only
c. A and B
d. Neither A nor B
5. WHAT distinguishes tax from license?
a. Tax is a regulatory measure
b. Tax is a demand of ownership
c. Tax arises from contract
d. Tax is a post activity imposition

6. Which of the following distinguishes license from tax ?

a. It is imposed under taxation power

b. It is a charge for other’s property
c. Non compliance to it will render businesses illegal
d. It is generally payable in money

7. The amount imposed is based on the value of the property

a. Eminent domain
b. License
c. Toll
d. Special assessment

8. Which is intended to regulate conduct ?

a. Penalty
b. License
c. Police power
d. Toll

9. Toll exhibits all of the following characteristics , except one. Which is

the exception ?
a. Demand of ownership
b. Compensation for the use of another’s property
c. Maybe imposed by private individuals .
d. Levied for th support of the government

10. Which of the following is incorrect ?

a. The collected tax is referred to as revenue
b. Tax is the sole source of government revenue.
c. License is imposed before commencement of business or
profession.

11. Which is not a requisite of gross income ?

a. Return on capital
b. Realized benefit
c. Exempted by law
d. Not exempted by law.

12. Which is taxable item of income ?

a. Increase in numbers of a herd of animals
b. Compensation fro personal injuries
c. Moral damages
d. Interest on moral damages

13. Which is not subject to income tax ?

a. Donation
b. Sale of service
c. Sale of goods
d. Barter of goods

14. The total consideration received from the sale of service

constitute
a. Return on capital
b. Return of capital
c. Either a or b
d. Both a and b

15. When paid for, which of the following items may involve a
return on capital?
a. House and lot
b. Life
c. Dignity
d. Health
16. The total consideration received from the sale of goods at a
gain represents :
a. Return on capital
b. Return of capital
c. Either a or b
d. Both a and b

17. The total consideration received from the sale of goods at a

loss represents
a. Return on capital
b. Return of capital
c. Either a or b
d. Both a and b

18. Why is income subject to taxation ?

a. Income is the most prevalent source of taxpayers wealth
b. Income is the best measure of taxpayer’s ability to pay
c. Rich people tend to have more income than the poor
d. Any of these

19. Which is not an item of gross income because of the absence of

undertaking from the taxpayer ?
a. Proceeds of a life insurance policy
b. Forgiveness of indebtedness as an acgt of gratuity
c. Revaluation surplus on properties
d. Service fees

20. Which is subject to income tax ?

a. Proceeds of life insurance policy received by the family of the insured
b. Excess of proceeds over the premiums paid received by the taxpayer
c. Life insurance proceeds received by the corporation from the
insurance of deceased officer
d. None o these
21. Which of the following is exempted from income taxation
because of the absence of ability to pay
a. Damage received from patent infringement unit
b. Unrealized income from investments
c. Gain on sale of goods
d. Inheritance .