80/80

Rice allowance is taxable when

Response: given more than P1,500

Score: 1 out of 1 Yes

Question 2

Which is correct when a minimum wage earner derives other income outside his employment?

Response: He is exempt from withholding tax, but subject to income tax.

Score: 1 out of 1 Yes

Question 3

All of these are subject to regular income tax, except

Response: Capital gain from the sale of real property located in the Philippines

Score: 1 out of 1 Yes

Question 4

Losses on capital assets

Response: not deductible against gross income whether or not compensated for by Iinsurance

Score: 1 out of 1 Yes

Question 5

The proceeds of life insurance received by the wife of the insured is

Response: exempt from income tax

Score: 1 out of 1 Yes

Question 6

Which of the following remuneration is an item of compensation income?

Response: Commissions to a minimum wage earner

Score: 1 out of 1 Yes

Question 7

Which interest i Interest income from notesncome is subject to regular tax?

Response: All of these

Score: 1 out of 1 Yes

Question 8
Eugenio, employed, derived the following income during the year:

Gross salaries Php 400,000

13th month pay and other benefits 40,000
SSS, PhilHealth, and Pag-Ibig contributions 20,000
Deductions for loans repayments 50,000
Deductions for withholding tax 60,000

Compute the compensation income to be reported in the annual income tax

return?

Response: P380,000

Score: 1 out of 1 Yes

Question 9

All income earned abroad that would otherwise be subject to final taxes it earned within the Philippines
shall be subject to progressive tax of a

Response: resident citizen.

Score: 1 out of 1 Yes

Question 10

Which of the following deductions from gross compensation income is included as part of gross income
subject to regular tax?

Response: dues Withholding tax

Score: 1 out of 1 Yes

Question 11

Which is considered compensation?

Response: Cost-of-living allowance

Score: 1 out of 1 Yes

Question 12

In 2016, Western Heights Corporation (WHC) reported a P40,000 recovery from bad
debts that was claimed as deduction against gross income in 2012. In 2012, the write-off increased the
operating loss of WHC to P50,000. NCC was very profitable from 2013 to the present. How much of the
P40,000 recovery is subject to tax?

Response: P40,000

Score: 1 out of 1 Yes

Question 13
Which is incorrect concerning transactions between associated enterprises?

Response: Pricing should be motivated by the need to save from total income tax.

Score: 1 out of 1 Yes

Question 14

JB EQUIPMENT AND MACHINERY INC., domestic corporation, reported the following income in 2014

Philippines Abroad
Service fees P 400,000 P 300,000
Interest income-bank 40,000 70,000
Royalties – franchise 80,000 30,000

Compute the total gross income subject to regular income tax.

Response: P800,000

Score: 1 out of 1 Yes

Question 15

Statement 1: Excess de minimis is considered compensation income as "other

benefits" for rank and file employees and managerial or supervisory employees.

Statement 2: Excess de minimis is a fringe benefit subject to the fringe benefit tax.

Response: Both statements are incorrect.

Score: 1 out of 1 Yes

Question 16

Farmers, Inc. purchased an agricultural lot for P1,000,000. It was later discovered that the lot had gold
deposits. Thus its fair value increased to P4,000,000. This increase in fair value is

Response: exempt from income tax.

Score: 1 out of 1 Yes

Question 17

Which is exempt from regular tax?

Response: Income of qualified pension plans

Score: 1 out of 1 Yes

Question 18

Which is subject to regular tax to a non-resident foreign corporation or non-

resident alien not engaged in trade or business?
Response: None of these

Score: 1 out of 1 Yes

Question 19

Which is subject to regular tax to a resident foreign corporation?

Response: Gain from sale of real property capital assets in the Philippines

Score: 1 out of 1 Yes

Question 20

Mr. Kennedy insured his life with his children as beneficiaries. He died after paying
P200,000 premiums. His children collected the P1,000,000 life insurance proceeds. How much will be
excluded from Mr. Kennedy 's gross income?

Response: P1,000,000

Score: 1 out of 1 Yes

Question 21

Which item of gross income is not subject to regular tax?

Response: Capital gain on the sale of bonds with more than 5 years maturity

Score: 1 out of 1 Yes

Question 22

Which of the following is not subject to regular tax of a domestic corporation or resident citizen?

Response: Income from abroad exempt under treaty

Score: 1 out of 1 Yes

Question 23

Mr. Harry, a professional practitioner, received the following from his clients:

Advances for future services to be rendered P 30,000

Collections for past services rendered 70,000
Reimbursements for client expenses 40,000
Reimbursement for out-of-pocket expenses 10,000

How much will be included in Harry’s gross income for regular income tax purposes?

Response: P110,000

Score: 1 out of 1 Yes

Question 24
Which is not an associated enterprise to the controlling individual of a holding company?

Response: An associate of a subsidiary in the group

Score: 1 out of 1 Yes

Question 25

The Paceer Security Agency (PSA) received P3,000,000 from its clients.
P2,400,000 of this was designated for salaries of guards assigned to various client establishments.

How much will be included in the gross income of (PSA)?

Response: P 600,000

Score: 1 out of 1 Yes

Question 26

Angus Company produces beef meat. In 2015, it reported the following:

Sales of live cattle P 600,000

Sale of young feeders 200,000
Increase in value of cattle inventory 300,000

Compute the income subject to regular tax.

Response: P800,000

Score: 1 out of 1 Yes

Question 27

Which individual taxpayer is not subject to progressive tax?

Response: Special aliens

Score: 1 out of 1 Yes

Question 28

Trina resigned in 2015 after 12 years of service. She had the following income during the year:

Salary, net of P80,000 withholding tax, P20,000 SSS,

P18,000 Philhealth and P40,000 13th month Php 480,000
Separation pay 1,000,000

Compute the gross income subject to progressive (regular) tax.

Response: P1,560,00

Score: 1 out of 1 Yes

Question 29

Mr. Roque, a supervisory employee, received the following income in 2015:

Gross compensation income, before contributions

to SSS, PhilHealth, and HDMF totaling P124,000 Php 800,000
Fringe benefits 200,000
Gain from redemption of shares in a mutual fund 100,000
Commission income 150,000
Gain on sale of stocks through the PSE 400,000

Determine the total income to be reported by Mr. Roque in gross income.

Response: P 826,000

Score: 1 out of 1 Yes

Question 30

Which is an item of gross income subject to regular tax?

Response: Lottery winnings from abroad

Score: 1 out of 1 Yes

Question 31

The term "de minimis benefits" does not include

Response: Christmas bonus

Score: 1 out of 1 Yes

Question 32

Benito has the following income in 2015:

Sales from vegetables P 400,000

Sales from fruits 200,000
Sales of carabao (acquired for P30,000 in 2015) 35,000
Interest income from tenants on the sale of
agricultural land pursuant to the Agrarian
Reform Program 12,000

The gross income subject to progressive tax is

Response: P605,000

Score: 1 out of 1 Yes

Question 33
Which is a correct de minimis limit?

Response: Laundry allowance of P3,600 per year

Score: 1 out of 1 Yes

Question 34

Which is a correct statement?

Response: The compensation income of rank and file employees is subject to regular tax.

Score: 1 out of 1 Yes

Question 35

The statutory minimum wage is

Response: The higher between P5,000 a month or P60,000 annually or the rate fixed by the Regional
Tripartite Wage and Productivity Board

Score: 1 out of 1 Yes

Question 36

Dividends subject to regular tax includes

Response: Foreign dividends

Score: 1 out of 1 Yes

Question 37

Which is not a supplemental compensation income?

Response: De minimis benefits

Score: 1 out of 1 Yes

Question 38

Which is not a reportable type of gross income?

Response: Capital gains from the sale of domestic stocks through the PSE

Score: 1 out of 1 Yes

Question 39

The excess of "13th month pay and other benefits" is

Response: subject to regular tax.

Score: 1 out of 1 Yes

Question 40
Fringe benefits includes

Response: De minimis benefits

Score: 1 out of 1 Yes

Question 41

Which is not subject to income tax?

Response: All of these

Score: 1 out of 1 Yes

Question 42

Which is an income exempt from income tax?

Response: Taxes collected by the government

Score: 1 out of 1 Yes

Question 43

Which is subject to regular tax to a non-resident foreign corporation or non-

resident alien not engaged in trade or business?

Response: None of these

Score: 1 out of 1 Yes

Question 44

Which is taxable as compensation?

Response: Termination benefits from resignation

Score: 1 out of 1 Yes

Question 45

Which of these employee benefits is subject to fWhich of these employee benefits is subject to final
tax?inal tax?

Response: Fringe benefits to supervisory and managerial employees

Score: 1 out of 1 Yes

Question 46

Corporations are allowed to report their income on

Response: either a fiscal or calendar year

Score: 1 out of 1 Yes

Question 47

Which is subject to progressive tax to an individual taxpayer?

Response: Amounts received by the insured in excess of premiums paid

Score: 1 out of 1 Yes

Question 48

For purposes of the fringe benefit tax, fringe benefits pertain to

Response: other fringe benefits not specifically included as compensation income of managerial or
supervisory employees.

Score: 1 out of 1 Yes

Question 49

Edwin purchased the life insurance policy of Paulo for P50,000. He continued the policy by paying
P20,000 premium after which Paulo died. Edwin collected the P500,000 proceeds of the policy.

How much will Edwin exclude from his gross income?

Response: P70,000

Score: 1 out of 1 Yes

Question 50

Which is not included in the gross taxable compensation income of an employee?

Response: 13th month pay and other benefits not in excess of P90,000

Score: 1 out of 1 Yes

Question 51

Which is an item of gross income subject to regular tax?

Response: Gain on sale of lot by a realty dealer

Score: 1 out of 1 Yes

Question 52

Which corporate taxpayer is not subject to regular tax?

Response: Non-resident foreign corporation

Score: 1 out of 1 Yes

Question 53
 MACTAN Corporation is engaged in the sales of goods. It reported the following summarized financial
statements during the year:

Sales P3,500,000
Less: cost of sales 2,000,000
Gross profit P1,500,000
Commission income on consignment 200,000
Interest income from customers 20,000
Interest income, net of final tax 10,000
Dividend income 50,000
Total Income 1,780,000
Less: Admin & Selling Expenses 1,000,000
Net income 780,000

Compute the total gross income subject to regular tax.

Response: P1,720.000

Score: 1 out of 1 Yes

Question 54

Corporations and individuals engaged in business or in the exercise of profession are required to report
their regular income

Response: quarterly and annually.

Score: 1 out of 1 Yes

Question 55

Which is not an exclusion criterion on employee benefits?

Response: Necessity of the employee rules

Score: 1 out of 1 Yes

Question 56

Which is an exempt de minimis benefit?

Response: Rice subsidy of half sack a month valued at P1,000

Score: 1 out of 1 Yes

Question 57

Which is not subject to the P90,000 exemption threshold for a private employee?

Response: Profit sharing bonus

Score: 1 out of 1 Yes

Question 58

Which of the following is included in gross income subject to regular tax?

Response: Farming income

Score: 1 out of 1 Yes

Question 59

Which is included in the gross income subject to regular tax of a resident alien?

Response: Interest income from promissory notes of resident clients

Score: 1 out of 1 Yes

Question 60

Mr. Juanito had the following income in 2019:

Compensation income, net of P77,000 SSS,

PhilHealth, HDMF and union dues P 300,000
Supplemental compensation income 30,000
13th month pay and other benefits 25,000

What is the taxable compensation income?

Response: P330,000

Score: 1 out of 1 Yes

Question 61

Which is subject to the withholding tax on compensation?

Response: Salary of minimum wage earners receiving fixed allowances

Score: 1 out of 1 Yes

Question 62

Which is usually an employee?

Response: A director who is at the same time the Chief Executive Officer

Score: 1 out of 1 Yes

Question 63

Which of the following will not be reported in gross income?

Response: Receipt of inheritance

Score: 1 out of 1 Yes

Question 64

Which is not an item of gross income subject to final tax?

Response: Share in the income of a general professional partnership

Score: 1 out of 1 Yes

Question 65

All items of passive income earned abroad are subject to regular tax to

Response: a resident citizens and domestic corporations

Score: 1 out of 1 Yes

Question 66

All of these are exempt benefits of a minimum wage earner except

Response: vacation pay

Score: 1 out of 1 Yes

Question 67

Which of these is subject to Philippine regular income tax to a foreigner?

Response: Interest income from domestic bonds

Score: 1 out of 1 Yes

Question 68

Night differential pay is exempt from taxation when received by a

Response: minimum wage earner

Score: 1 out of 1 Yes

Question 69

Statement 1: All prizes earned abroad are subject to regular tax.

Statement 2: All prizes in the Philippines are subject to final tax.

Which statement is generally correct?

Response: Statement 1

Score: 1 out of 1 Yes

Question 70

Which of the following is subject to income tax?

Response: Voluntary contribution to SSS, PHIC and HDMF

Score: 1 out of 1 Yes

Question 71

The P90,000 exemption threshold is applicable to

Response: all employees.

Score: 1 out of 1 Yes

Question 72

All of these are items of gross income subject to regular tax except one. Select the
exception

Response: Interest income from long-term bank deposits

Score: 1 out of 1 Yes

Question 73

Meal allowance is taxable when given

Response: as incentive to all employees

Score: 1 out of 1 Yes

Question 74

De minimis benetls are generally

Response: exempt from tax

Score: 1 out of 1 Yes

Question 75

Sarah Baby International graduated from its income tax holiday incentive and is effectively subject to tax
beginning 2015. In 2016, it collected a P4M from a P6M receivable which was written off as bad debt
expense in 2013. Before the write- off, Sarah International had P1M profit. Sarah posted profits in 2014
and 2015 in excess of its operating loss in 2013.

Compute the amount of recovery subject to regular income tax.

Response: P0

Score: 1 out of 1 Yes

Question 76

Select the most accurate statement.

Response: The benefits of rank and file employees are not subject to fringe benefit tax

Score: 1 out of 1 Yes

Question 77

The following relates to an annual payroll of the employee:

Gross compensation income, before P44,000

contributions to SSS, PHIC and HDMF P1,068,000
Additional compensation 45,000
13th month pay and other benefits 89,000

Compute the taxable compensation income.

Response: P 1,069,000

Score: 1 out of 1 Yes

Question 78

Which is not part of compensation income subject to regular tax?

Response: Portion of salary contributed to SSS

Score: 1 out of 1 Yes

Question 79

Mr. Smith purchased a life annuity for P1,000,000 which will pay him P100,000 a year. What will Mr.
Smith include in his gross income on the 11th year of the policy?

Response: P100,000

Score: 1 out of 1 Yes

Question 80

Individual taxpayers shall report their income on

Response: a calendar year.

Score: 1 out of 1