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Test Bank Income Taxationdocx Compress
Test Bank Income Taxationdocx Compress
A. SUBSIDY
B. TARIFF
C. TAXATION
D. TRIBUTE
A) CRIMINAL IN NATURE
B) PENAL IN NATURE
C) POLITICAL IN NATURE
D) GENERALLY PROSPECTIVE IN APPLICATION
A) PROVINCES
B) CITIES
C) BARANGAYS
D) BARRIOS
A) FISCAL ADEQUACY
B) THEORETICAL JUSTICE
C) ADMINISTRATIVE FEASIBILITY
D) INHERENT IN SOVEREIGNTY
A) THEORETICAL JUSTICE
B) ADMINISTRATIVE FEASIBILITY
C) FISCAL ADEQUACY
D) NONE OF THE ABOVE
A) QUANTIFIABILITY
B) EQUALITY
C) CERTAINTY
D) CONVENIENCE
A) INHERENT LIMITATION
B) THEORETICAL JUSTICE
C) LEGISLATIVE IN CHARACTER
D) ADMINISTRATIVE FEASIBILITY
A) FALSE, FALSE
B) FALSE, TRUE
C) TRUE, TRUE
D) TRUE, FALSE
A) THEORETICAL JUSTICE
B) LEGISLATIVE IN CHARACTER
C) INHERENT LIMITATIONS
D) CONSTITUTIONAL LIMITATIONS
19. WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT?-(RPCPA)
A) INTERNATIONAL COMITY
B) DOUBLE TAXATION
C) NON-DELEGATION OF THE LEGISLATIVE POWER TO TAX
D) TERRITORIALITY
A) UNIFORMITY OF TAXATION
B) EQUALITY OF TAXATION
C) DUE PROCESS OF LAW
D) NON-DELEGATION OF LEGISLATIVE POWER
23. WHICH OF THE FOLLOWING IS VIOLATIVE OF THE UNIFORMITY RULE
IN TAXATION?
A) I ONLY
B) I AND II
C) III AND IV
D) I, III AND IV
25. STATEMENT 1:THE CONSTITUTIONAL EXEMPTION ON INCOME
TAXES, PROPERTY TAXES AND CUSTOMS DUTIES IS ALLOWED ON
NON-STOCK, NON-PROFIT EDUCATIONAL INSTITUTIONS ONLY.
A) STATEMENT 1 ONLY
B) STATEMENTS 1 AND 2
C) STATEMENT 2 ONLY
D) ALL OF THEM
A) THEORETICAL JUSTICE
B) LEGISLATIVE IN CHARACTER
C) INHERENT LIMITATIONS
D) CONSTUTIONAL LIMITATIONS
A) NATIONAL DEFENSE
B) PUBLIC EDUCATION
C) IMPROVEMENT OF SUGAR INDUSTRY
D) NONE OF THE ABOVE
38. A FUNDAMENTAL RULE IN TAXATION IS THAT “THE PROPERTY OF
ONE COUNTRY MAY NOT BE TAXED BY ANOTHER COUNTRY”. THIS IS
KNOWN AS-(RPCPA)
A) INTERNATIONAL LAW
B) INTERNATIONAL COMITY
C) RECIPROCITY
D) INTERNATIONAL INHIBITION
A)YES, NO
B)YES, YES
C)NO, YES
D)NO, NO
A) INTERNATIONAL COMITY
B) RECIPROCITY PROVISIONS
C) PRINCIPLE OF TERRITORIALITY
D) EXEMPTION IN THE TAX CODE
41. DEALS WITH THE PROVISION OF THE LAW WHICH DETERMINES THE
PERSON OR PROPERTY TO BE TAXED, THE SUM OR SUMS TO BE RAISED, THE
RATE THEREOF, AND THE TIME AND MANNER OF LEVYINGM
RECEIVING AND COLLECTING OF TAXES
A) COLLECTION
B) PAYMENT
C) ENFORCED CONTRIBUTION
D) LEVY
COLLECTION
A)
B)
C)
D)
PROPORTIONATE IN CHARACTER
ENFORCED CONTRIBUTION
LEVY
43.THE AMOUNT REQUIRED IS DICTATED BY THE NEEDS OF THE
GOVERNMENT-(RPCPA)
A) LICENSE FEE
B) TAX
C) TOLL
D) TARIFF
A) UNLIMITED AS TO AMOUNT
B) PAYABLE IN MONEY
C) PROPORTIONATE IN CHARACTER
D) REGULAR IN PAYMENT
A) PROPERTY TAX
B) EXCISE TAX
C) POLL TAX
D) INCOME TAX
A) TRANSFER TAX
B) SALES TAX
C) REAL PROPERTY TAX
D) INCOME TAX
50. SHARON, A CPA HAS JUST OBTAINED HER CPA LICENSE. BEFORE SHE
CAN LAWFULLY PURSUE HER OCCUPATION, SHE SHOULD
PAY(RPCPA)
A) PRIVILEGE TAX(PTR)
B) PERCENTAGE TAX
C) CPA’S INCOME TAX
D) VALUE-ADDED TAX
A) DIRECT TAX
B) INDIRECT TAX
C) EXCISE TAX
D) POLL TAX
A) IMMIGRATION TAX
B) TRANSFER TAX
C) INCOME TAX
D) CONTRACTOR’S TAX
A)
B)
C)
D)
STATEMENT 2: THE ESTATE TAX IS A DIRECT TAX-(RPCPA)
A) DIRECT TAX
B) INDIRECT TAX
C) PROPERTY TAX
D) NONE OF THE ABOVE
A) DIRECT TAX
B) INDIRECT TAX
C) PROPERTY TAX
D) NONE OF THE ABOVE
57. FELIX IS A MINING OPERATOR. HIS MINERAL LANDS ARE NOT COVERED
BY ANY LEASE CONTRACT. THE TAX FELIX HAS TO PAY BASED ON THE
ACTUAL VALUE OF THE GROSS OUTPUT OR MINERAL PRODUCTS
EXTRACTED IS-(RPCPA)
A) MINING TAX
B) ROYALTIES
C) RENTAL
D) AD VALOREM TAX
A) REVENUE TAX
B) REGULATORY TAX
C) SPECIFIC TAX
D) AD VALOREM TAX
A) REVENUE TAX
B) REGULATORY TAX
C) SPECIFIC TAX
D) AD VALOREM TAX
A) NATIONAL TAX
B) LOCAL TAX
C) PROPORTIONAL TAX
D) GENERAL TAX
A) NATIONAL TAX
B) LOCAL TAX
C) PROGRESSIVE TAX
D) REGRESSIVE TAX
A) DIGRESSIVE
B) UNIFORM
C) REGRESSIVE
D) PROGRESSIVE
63.THE POWER OF THE STATE OR THOSE TO WHOM THE POWER HAS BEEN
DELEGATED TO TAKE PRIVATE PROPERTY FOR PUBLIC USE UPON PAYING
TO THE OWNER A JUST COMPENSATION
A) TAX
B) LICENSE FEE
C) TOLL
A)
B)
C)
D)
D) EMINENT DOMAIN
A) TAXATION
B) EMINENT DOMAIN
C) POLICE POWER
D) POLICE POWER AND POWER OF TAXATION
70. STATEMENT 1: THE CONGRESS CAN ENACT TAX LAWS EVEN IN THE
ABSENCE OF A CONSTITUTIONAL PROVISION GRANTING SAID BODY
THE POWER TO TAX.
A)
B)
C)
D)
A) FALSE, FALSE
B) FALSE, TRUE
C) TRUE, TRUE
D) TRUE, FALSE
71. WHICH OF THE FOLLOWING MAY NOT RAISE MONEY FOR THE
GOVERNMENT-(RPCPA)
A) POWER OF TAXATION
B) POLICE POWER
C) POWER OF EMINENT DOMAIN
D) PRIVATIZATION OF GOVERNMENT’S CAPITAL ASSETS
72. IN THIS POWER OF THE STATE, THE PERSON WHO IS PARTING WITH HIS
MONEY OR PROPERTY IS PRESUMED TO RECEIVE A BENEFIT-(RPCPA)
A) TAXATION
B) POLICE POWER
C) EMINENT DOMAIN
D) FORFEITURE POWER
A) TAXATION
B) POLICE POWER
C) EMINENT DOMAIN
D) NONE
A) TAX
B) LICENSE FEE
C) TOLL
D) CUSTOMS DUTY
A) DEMAND OF PROPRIETORSHIP
B) COMPENSATION FOR THE USE OF ANOTHER’S PROPERTY
C) MAY BE IMPOSED BY PRIVATE INDIVIDUALS
D) LEVIED FOR THE SUPPORT OF THE GOVERNMENT
A) LICENSE FEE
B) TAX
C) TOLL
D) FRANCHISE
A) TAX
B) CUSTOMS DUTY
C) REVENUE
D) ORDINARY INCOME
A) LICENSE FEE
B) INCOME
C) CUSTOMS DUTY
D) REVENUE
A) CORRECT, WRONG
B) WRONG, CORRECT
C) WRONG, WRONG
D) CORRECT, CORRECT
A) SHIFTING
B) CAPITALIZATION
C) TRANSFORMATION
D) TAX EXEMPTION
A) SHIFTING
B) CAPITALIZATION
C) TRANSFORMATION
D) TAX EXEMPTION
A) SHIFTING
B) CAPITALIZATION
C) TRANSFORMATION
D) TAX EXEMPTION
95. THE GRANT OF IMMUNITY TO PARTICULAR PERSONS OR
CORPORATION OR TO PERSONS OR CORPORATIONS OF A PARTICULAR
CLASS FROM A TAX
WHICH PERSONS AND CORPORATIONS GENERALLY WITHIN THE SAME
TAXING DISTRICT ARE OBLIGED TO PAY
A) TAX EXEMPTION
B) TAX EVASION
C) TAX AVOIDANCE
D) TAX AMNESTY
A) STATEMENT 1 ONLY
B) STATEMENTS 1 AND 2
C) STATEMENT 2 ONLY
D) NEITHER OF THEM
A) TAX EXEMPTION
B) TAX EVASION
C) TAX AVOIDANCE
D) TRANSFORMATION
A) TAX EXEMPTION
B) TAX EVASION
C) TAX AVOIDANCE
D) TRANSFORMATION
A) I ONLY
B) I AND III ONLY
C) I AND IV
D) I, III AND IV
103. THE FOLLOWING, EXCEPT ONE, ARE EXCEPTIONS TO THE RULE THAT
TAX EXEMPTIONS MUST BE STRICTLY CONSTRUED AGAINST THE
TAXPAYER
105. SOME FRANCHISE HOLDERS WHO ARE PAYING THE FRANCHISE TAX
ARE BEING REQUIRED BY AN AMENDATORY LAW TO PAY THE
VALUEADDED TAX, WHILE OTHERS REMAIN SUBJECT TO FRANCHISE TAX.
WHICH
OF THE FOLLOWING CONSTITUTIONAL PROVISION MAKES THE LAW
UNCONSTITUTIONAL?-(RPCPA)
A) TRUE, TRUE
B) FALSE, TRUE
C) FALSE, FALSE
D) TRUE, FALSE
A) CORRECT, WRONG
B) CORRECT, CORRECT
C) WRONG, CORRECT
D) WRONG, WRONG
109. ALL OF THE FOLLOWING, EXCEPT ONE, ARE SOURCES OF TAX LAWS-
A) STATUTES
B) COURT DECISIONS
C) CONSTITUTION
D) BIR RULINGS
A) SET-OFF DOCTRINE
B) DOCTRINE OF RECIPROCITY
C) TAX SPARING DOCTRINE
D) EQUITAB LE RECOUPMENT
A) CORRECT, WRONG
B) CORRECT, CORRECT
C) WRONG, CORRECT
D) WRONG, WRONG
113. THE PLACE OR AUTHORITY THAT HAS THE RIGHT TO IMPOSE
ANDCOLLECT TAXES-
A) TERRITORIALITY
B) INTERNATIONAL COMITY
C) SITUS OF TAXATION
D) TRANSFORMATION
A) INCOME TAX
B) COMMUNITY TAX
C) ESTATE TAX
D) BUSINESS TAX
B. TRUE OR FALSE
1. NO PERSON SHALL BE IMPRISONED FOR DEBT OR NON-PAYMENT OF
POLL TAX
25. THE THREE INHERENT POWERS ARE METHODS BY WHICH THE STATE
INTERFERES WITH PRIVATE RIGHT.
43. ADMINISTRATIVE FEASIBILITY MEANS ALSO THAT THE TAX MUST NOT
BE DISCOURAGING TO BUSINESS ACTIVITY.
46. TAX EVASION IN ONE YEAR CAN BE OFFSET BY PAYING MORE TAXES
THE FOLLOWING YEAR.
2. ARCHIE, A STAFF AUDITOR OF SGV & CO., TOOK AND PASSED THE
EXAMINATION FOR CERTIFIED INTERNAL AUDITOR (CIA). THE
FOLLOWING YEAR, HE RESIGNED FROM HIS JOB AND LEFT THE
PHILIPPINES ON APRIL 10, 2006 TO WORK AS AN INTERNAL AUDITOR IN A
BIG ESTABLISHMENT IN
MELBOURNE, AUSTRALIA. FOR INCOME TAX PURPOSES, WHICH OF THE
FOLLOWING STATEMENTS IS CORRECT WITH RESPECT TO ARCHIE’S
CLASSIFICATION?
A) P28,000
B) P26,000
C) P24,000
D) P20,000
7. THE FOLLOWING, EXCEPT ONE, MAY CLAIM PERSONAL EXEMPTIONS-
(RPCPA)
A) ADDITIONAL EXEMPTION
B) SPECIAL ADDITIONAL PERSONAL EXEMPTION
C) OPTIONAL STANDARD DEDUCTION
D) PERSONAL EXEMPTION
10.A MAN HAS THREE WIVES UNDER HIS TRIBAL CUSTOMS AND PRACTICE.
HE IS ENTITLED TO PERSONAL EXEMPTION APPERTAINING TO-(RPCPA)
A) A SINGLE INDIVIDUAL
B) A MARRIED INDIVIDUAL
C) A MARRIED INDIVIDUAL PLUS ADDITIONAL EXEMPTION FOR
DEPENDENTS PERTAINING TO EACH OF THE 2 EXTRA WIVES
D) A HEAD OF THE FAMILY PLUS ADDITIONAL EXEMPTION FOR
DEPENDENTS PERTAINING TO EACH OF HIS THREE WIVES
13. THE HUSBAND CAN WAIVE HIS RIGHT TO CLAIM THE ADDITIONAL
EXEMPTION IN FAVOR OF HIS WIFE IF-
A) SISTER-IN-LAW
B) STEPMOTHER
C) GRANDFATHER
D) ILLEGITIMATE DAUGHTER
15. NENA, AGED 70 YEARS OLD, WHO LIVES WITH HER UNMARRIED SON
MARIO, RECEIVED P60,000 WHICH WAS USED FOR HER SUPPORT
DURING THE YEAR. THE SOURCES OF HER SUPPORT WERE AS FOLLOWS:
SOCIAL SECURITY BENEFITS P24,000
MARIO 20,000
CAROLINE, UNRELATED FRIEND 4,000
DOUGLAS, SON OF NENA 5,000
LALAINE, NENA’S SISTER
TOTAL
A) MARIO
B) DOUGLAS
C) LALAINE
D) NONE
16. WHO OF THE FOLLOWING IS NOT A QUALIFIED DEPENDENT FOR
PURPOSES OF CLAIMING ADDITIONAL EXEMPTION?
A) ILLEGITIMATE CHILD
B) LEGALLY ADOPTED CHILD
C) LEGITIMATE CHILD
D) CHILD BY NATURAL ADOPTION
A) ANDREA ONLY
B) ANDREA AND BARBARA
C) ANDREA, BARBARA AND CARIDAD
D) ANDREA, BARBARA, CARIDAD AND DONATA
A) P20,000
B) 25,000
C) 50,000
D) 75,000
A) P8,000
B) 32,000
C) 25,000
D) 50,000
20. REMY MARTIN, SINGLE, SUPPORTING THE FOLLOWING:
JOHNNY WALKER, ILLEGITIMATE SON, 16 YEARS OLD, STUDYING IN THE
UNIVERSIDAD DE JEREZ, CADIZ, SPAIN, LIVING WITH REMY MARTIN’S
DIPLOMATIC BROTHER IN ANDALUCIA, SPAIN.
TORRES, FATHER, LIVING WITH HIM. REMY MARTIN IS GIVING 60% OF THE
ENTIRE SUPPORT NEEDED, THE OTHER 40% IS BEING FURNISHED BY HIS
SISTER, CHEVAS REGAL.
A) P20,000
B) 75,000
C) 33,000
D) 41,000
A) P200,000
B) 96,000
C) 64,000 D) NONE
23. IN 2009, PIDOL’S WIFE DIED OF A CAR ACCIDENT. HIS DEPENDENTS ARE
AS FOLLOWS:
CHILDREN STATUS
A 22 Y/O, EMPLOYED ON JULY 12, 2009
B 21 Y/O ON JANUARY 2, 2009
C 18 Y/O, MARRIED ON JANUARY 31, 2009
D 17 Y/O, GAINFULLY EMPLOYED ON OCTOBER 1, 2009
E 15 Y/O, AFFLICTED WITH SORE EYES ON MAY 6, 2009
F 13 DIED OF AN ACCIDENT IN 2009
G BROTHER, 28 Y/O PARALYTIC
A) P75,000
B) 125,000
C) 100,000
D) 32,000
24. FOR THE YEAR 2010, PIDOL CAN CLAIM ADDITIONAL EXEMPTIONS OF-
A) P8,000
B) 16,000
C) 25,000
D) 100,000
A) P120,000
B) 225,000
C) 95,000
D) 87,000
A) I AND II
B) III AND IV
C) I, II AND IV
D) I, II, III AND IV
A) TRUE, FALSE
B) TRUE, TRUE
C) FALSE, TRUE
D) FALSE, FALSE
A) P97,600
B) 97,000
C) 122,000
D) 122,600
A) RESIDENT ONLY
B) NON-RESIDENT CITIZEN
C) RESIDENT CITIZEN
D) NON-RESIDENT ALIEN
A) YES, NO
B) YES, YES
C) NO, YES
D) NO, NO
A) P261,000
B) 334,000
C) 291,000
D) 306,000
A) P243,000
B) 56,000
C) 74,000 D) NONE
A) P83,500
B) 63,500
C) 18,500
D) 334,000
ELVIS AND MADONNA, HUSBAND AND WIFE, HAVE THE FOLLOWING DATA
IN 2009:
ELVIS MADONNA
COMPENSATION INCOME P125,000 P60,000
RENT INCOME(NET OF 5% WHT) 76,000
ROYALTIES ON BOOKS 70,000
DEPENDENT CHILDREN 6
WHT ON COMPENSATION 10,000
DURING THE YEAR, THE SPOUSES HAD AN INCOME OF P120,000 AND
EXPENSES OF P65,000, WHICH CANNOT BE IDENTIFIED AS SOLELY ESRNED
BY THE WIFE OR THE HUSBAND.
A) P14,000
B) 7,000
C) NONE
D) NO ANSWER
A) RESIDENT ALIEN
B) NON-RESIDENT ALIEN ENGAGED IN TRADE OR BUSINESS
C) NON-RESIDENT ALIEN NOT ENGAGED IN TRADE OR BUSINESS
D) NON-RESIDENT FOREIGN CORPORATION
A) P28,125
B) 17,125
C) 44,500
D) 41,360
44. THE INCOME TAX PAYABLE BY ROD IF HE AVAILED OF THE OPTIONAL
STANDARD DEDUCTIONS-
A) P4,500
B) 50,225
C) 51,050
D) 51,650
A) P31.32
B) 18,277.72
C) 363.16
D) 8,687.85
A) P448.29
B) 1,431.45
C) (P983.19) D) NONE
47. MRS. EVAN OWNS A PARCEL OF LAND WORTH P500,000 WHICH SHE
INHERITED FROM HER FATHER IN 2006 WHEN IT WAS WORTH P300,000. HER
FATHER PURCHASED IT IN 1986 FOR P100,000. IF MRS. EVAN TRANSFERS THIS
PARCEL OF LAND FOR HER WHOLLY OWNED CORPORATION IN EXCHANGE
FOR SHARES OF STOCKS OF SAID CORPORATION WORTH
P450,000. MRS. EVAN’S TAXABLE GAIN IS-(RPCPA)
A) ZERO
B) P50,000
C) 150,000
D) 350,000
48. MR. JOHNNY DELA CRUZ TRANSFERRED HIS COMMERCIAL LAND WITH
A COST OF P500,000 BUT WITH A FAIR MARKET VALUE OF P750,000 TO JDC
CORPORATION IN EXCHANGE OF THE STOCKS OF THE CORPORATION WITH
PAR VALUE OF P1,000,000. AS A RESULT OF THE TRANSFER, HE BECAME THE
MAJOR STOCKHOLDER OF THE CORPORATION.-(RPCPA)
49. MR. SANTOS PURCHASED A LIFE ANNUITY FOR P100,000 WHICH WILL PAY
HIM P10,000 A YEAR. THE LIFE EXPECTANCY OF MR. SANTOS IS 12 YEARS.
WHICH OF THE FOLLOWING WILL MR. SANTOS BE ABLE TO
EXCLUDE FROM HIS GROSS INCOME?-(RPCPA)
A) P100,000
B) 10,000
C) 20,000
D) 120,000
50.IF AN INDIVIDUAL PERFORMS SERVICES FOR A CREDITOR WHO IN
CONSIDERATION THEREOF CANCELS THE DEBT, THE CANCELLATION OF
INDEBTEDNESS MAY AMOUNT-(RPCPA)
A) TO A GIFT
B) TO A CAPITAL CONTRIBUTION
C) TO A DONATION INTER VIVOS
D) TO A PAYMENT OF INCOME
A) P50,000
B) 270,400
C) 270,000
D) 240,000
A) P5,000
B) 10,000
C) 15,000 D) NONE
A) P50,000, 50,000
B) 12,500, 37,500
C) 37,500, 12,500
D) NONE, 50,000
55. USING THE SAME DATA IN NUMBER 54 ABOVE, EXCEPT THAT 50% OF
THE FACE VALUE OF THE NOTE IS PAYABLE IN 2009 WHILE THE
REMAINING 50% IS PAYABLE IN 2010?
56.
2008 CASE1 CASE2 CASE3 CASE4
NET INCOME BEFORE
WRITE-OFF OF
BAD DEBT 70,000 70,000 70,000 70,000
LESS: BAD DEBT
WRITTEN OFF 40,000 80,000 55,000 85,000
NET INCOME AFTER
BAD DEBT 40,000 (10,000) 15,000 (15,000)
2009
AMOUNT RECOVERED 40,000 30,000 40,000 85,000
THE TAXABLE AMOUNT ON THE RECOVERY OF BAD DEBT PREVIOUSLY
DEDUCTED, RESPECTIVELY, IS –
IT IS ALSO STIPULATED IN THE CONTRACT THAT THE LESSEE WILL PAY THE
P1,500 ANNUAL REAL PROPERTY TAX ON THE LAND.
A) P12,000
B) 13,500
C) 24,000
D) 25,500
A) P13,500
B) 1,500
C) 1,013,500
D) 1,000,000
A) P13,500
B) 1,500
C) 1,013,500
D) 88,500
62. ASSUMING THAT DUE TO THE FAULT OF THE LESSEE, THE LEASE
CONTRACT WAS TERMINATED ON JANUARY 1, 2011, HOW MUCH INCOME
IS TO BE REPORTED BY THE LESSOR IN 2011?
A) P763,500
B) 750,000
C) 88,500
D) 1,013,500
IT WAS FURTHER AGREED THAT LCB WILL PAY THE REAL ESTATE TAX ON
THE LAND ASSESSED AT P3,000 ANNUALLY. ON JANUARY 2, 2006, LCB PAID
ARTURO P120,000 CONSISTING OF RENTAL COVERING THE 2 YEARS
PERIOD(24 MONTHS) FROM 2006 TO 2007.
A) P60,000
B) 123,000
C) 120,000
D) 63,000
A) P84,429
B) 105,857
C) 81,429
D) 21,429
A) P165,857
B) 162,857
C) 114, 429
D) 84,429
A) P105,857
B) 102,857
C) 114,429
D) 84,429
A) P1,443,000
B) 1,485,857
C) 1,440,000
D) 1,482,857
A) P75,000
B) 740,000
C) 140,000
D) 190,000
A) P215,000
B) 220,000
C) 225,000
D) 190,000
A) ZERO
B) P500,000
C) 10,000
D) 50,000
A) P500,000
B) 200,000
C) 300,000
D) NONE
76. ASSUME THAT SOFIA DIED AFTER 10 YEARS OF PAYING PREMIUM.
HOW MUCH INCOME SHOULD BE REPORTED TO THE BIR?
A) P500,000
B) 100,000
C) 400,000
D) NONE
77. IF PAUL DIES ON THE 5TH YEAR, HIS BENEFICIARY WILL REPORT AN
INCOME OF-
A) P500,000
B) 150,000
C) 260,000
D) EXEMPT
78. SUPPOSE PAUL DIES ON THE 5TH YEAR AND HIS BENEFICIARY WAS
OFFERED TO RECEIVE P150,000 IN LUMP SUM OR TO RECEIVE IT AT
P20,000 A MONTH FOR TEN(10) MONTHS AND THE BENEFICIARY
CHOSE THE 2ND OPTION, HE WILL REPORT AN INCOME OF-
A) P500,000
B) 150,000
C) 50,000
D) EXEMPT
79. SUPPOSE PAUL SURVIVED THE POLICY AND WAS ABLE TO RECEIVE
P500,000, HE WILL REPORT AN INCOME OF-
A) P500,000
B) 260,000
C) 150,000 D) NONE
81. MR. BASIL INSURED HIS LIFE WITH HIS ESTATE AS BENEFICIARY.IN
2008, AFTER MR. BASIL HAD PAID P65,000 IN PREMIUM, HE ASSIGNED
THE POLICY TO MR. JOSE LLAMADO FOR P60,000, AND MR. LLAMADO
CONTINUED PAYING THE PREMIUMS. MR. BASIL DIED AND MR.
LLAMADO COLLECTED THE TOTAL PROCEEDS OF P200,000. MR.
LLAMADO, AFTER THE ASSIGNMENT AND BEFORE MR. BASIL’S
DEATH, PAID TOTAL PREMIUMS OF P80,000. AS A RESULT OF THE
ABOBE TRANSACTION, MR. LLAMADO-(RPCPA)
A) P4,750,000
B) 1,500,000
C) 1,750,000
D) 3,250,000
A) ZERO
B) P20,000
C) 60,000
D) 155,000
A) ZERO
B) P40,000
C) 70,000
D) 50,000
A) P190,000
B) 680,000
C) 830,000
D) 240,000
86. LYDIA WAS HIT BY A WAYWARD BUS WHILE ON HER WAY HOME. SHE
SURVIVED BUT HAD TO PAY P150,000 FOR HER
HOSPITALIZATION. SHE WAS UNABLE TO WORK FOR SIX(6) MONTHS
WHICH MEANT THAT SHE DID NOT RECEIVE HER USUAL SALARY OF
P10,000 A MONTH OR A TOTAL OF P60,000. SHE SUED THE BUS
COMPANY AND WAS ABLE TO OBTAIN A FINAL JUDGMENT
AWARDING HER P150,000 AS REIMBURSEMENT FOR HER
HOSPITALIZATION, P60,000 FOR THE SALARIES SHE FAILED TO
RECEIVE WHILE HOSPITALIZED, AND P250,000 AS MORAL DAMAGES
FOR HER PAIN AND SUFFERING. SHE WAS ABLE TO COLLECT IN FULL
FROM THE JUDGMENT.
HOW MUCH INCOME DID SHE REALIZE WHEN SHE COLLECTED FROM THE
JUDGMENT?
A) P460,000
B) 250,000
C) 60,000
D) 400,000
A) P40,000 IN 2008
B) 5,000 IN 2008
C) 5,000 IN 2007
D) NONE
88. WHICH OF THE FOLLOWING IS A TAXABLE INCOME?-(RPCPA)
SHEILA WAS SEPARATED DUE TO HER FAILING EYESIGHT. SHE WAS GIVEN
P250,000 AS SEPARATION PAY.
91. DURING THE YEAR, BEN RECEIVED A COCONUT LAND FROM HIS
MOTHER BY WAY OF AN INTER-VIVOS DONATION. THE LAND HAD A
MARKET VALUE OF P700,000 AND EARNING AN AVERAGE ANNUAL
INCOME OF P50,000.
A) P3,500,000
B) 3,350,000
C) 330,000
D) 80,000
A) P300,000
B) 400,000
C) 600,000 D) NONE
A) NO, YES, NO
B) NO, YES, YES C) YES, NO, NO
D) YES, NO, YES
A) P3,090,000
B) 3,000,000
C) 3,270,000
D) 270,000
A) P48,750
B) 46,500
C) 173,750
D) 171,000
99. AFTER WORKING FOR 3O YEARS AND DUE TO OLD AGE, RAFFY
RETIRED FROM HIS EMPLOYMENT ON DECEMBER 31, 2008 AS A RANK-
AND-FILE EMPLOYEE OF TUMAGAY CORPORATION. AS A
CONSEQUENCE OF HIS RETIREMENT, HE RECEIVED THE FOLLOWING
FROM HIS EMPLOYER:
SALARY FOR 2008 P250,000
CHRISTMAS GIFT 25,000
ANNIVERSARY BONUS 2,500
LOYALTY AWARD 10,000
RETIREMENT PAY 750,000
BASED ON THE ABOVE DATA, THE AMOUNT SUBJECT TO TAX OF RAFFY IS-
A) P250,000
B) 257,500
C) 252,500
D) 1,037,500
A) P5,100
B) 34,100
C) 29,000 D) NONE
A) P144,000
B) 150,000
C) 109,900
D) 138,900
A) HOLIDAY PAY
B) OVERTIME PAY
C) NIGHT SHIFT DIFFERENTIAL PAY
D) NONE OF THE ABOVE
103. THREE(3) TAXPAYERS HAVE THE FOLLOWING DATA:
ALCANZO BARRIENTOS CORPORAL
2009 BASIC PAY P99,048 P101,172 P84,368
MONTHLY BASIC PAY 8,254 8,431 10,546
HOLIDAY PAY 435 - -
OVERTIME PAY 1,256 1,459 2,543
HAZARD PAY - - 1,000
NIGHT SHIFT DIFF PAY - 1,686 -
TOTAL PAY
FOR THE MONTH 9,945 11,576 14,089
WHO OF THE ABOVE TAXPAYER(S) IS/ARE EXEMPT FROM INCOME TAX?
A) ALCANZO ONLY
B) ALCANZO AND BARRIENTOS
C) ALCANZO, BARRIENTOS AND CORPORAL
D) BARRIENTOS AND CORPORAL
CHAPTER 12- INCOME TAX OF CORPORATIONS
MULTIPLE CHOICE
A) DOMESTIC CORPORATIONS
B) RESIDENT CORPORATIONS
C) RESIDENT FOREIGN CORPORATIONS ENGAGED IN TRADE OR
BUSINESS IN THE PHILIPPINES
D) RESIDENT FOREIGN CORPORATION NOT ENGAGED IN TRADE OR
BUSINESS IN THE PHILIPPINES
A) DOMESTIC CORPORATION
B) RESIDENT FOREIGN CORPORATION
C) NON-PROFIT CEMETERY
D) NON-RESIDENT FOREIGN CORPORATION
A) P241,020
B) 219,320
C) 803,400
D) 259,490
110. BASED ON THE DATA IN NUMBER 109 ABOVE, THE TOTAL FINAL
TAXES PAYABLE ON RGF CORPORATION IS-
A) P19,000
B) 21,500
C) 33,250
D) 3,000
111. LCY CORPORATION, A CORPORATION ENGAGED IN BUSINESS
IN THE PHILIPPINES AND ABROAD, HAS THE FOLLOWING DATA IN
2009:
GROSS INCOME, PHILIPPINES P975,000
EXPENSES, PHILIPPINES 750,000
GROSS INCOME, USA 770,000
EXPENSES, USA 630,000
INTEREST ON BANK DEPOSIT 25,000
A) P886,000
B) 1,156,000
C) 641,000
D) 616,000
A) P51,475
B) 72,600
C) 103,120
D) 148,100
114. THE INCOME TAX PAYABLE AT THE END OF THE FIRST QUARTER IS-
A) P40,800
B) 36,720
C) 28,300
D) 21,500
115. THE INCOME TAX PAYABLE AT THE END OF THE SECOND QUARTER
IS-
A) P19,200
B) 28,320
C) 31,800
D) 26,000
116. THE INCOME TAX PAYABLE AT THE END OF THE THIRD QUARTER IS-
A) P52,000
B) 62,400
C) 12,640 D) NONE
A) P25,090
B) 63,750
C) 75,900
D) 68,610
A) P21,000
B) 14,000
C) 10,400
D) 29,440
A) CONSTRUCTIVE RECEIPT
B) TAX BENEFIT RULE
C) END RESULT DOCTRINE
D) PREDOMINANCE TEST
A) P343,000
B) 147,000
C) 576,000
D) 160,000
A) P346,000
B) 147,000
C) 1,203,200
D) 345,667
A) ZERO
B) 30%
C) 20%
D) 10%
A) P288,000
B) 17,500
C) 160,000
D) 30,000
A) STOCK DIVIDENDS
B) PROPERTY DIVIDENDS
C) CASH DIVIDENDS
D) LIQUIDATING DIVIDENDS
A) STOCK DIVIDEND
B) CASH DIVIDEND
C) LIQUIDATING DIVIDEND
D) INDIRECT DIVIDEND
SPECIAL TOPIC-MINIMUM CORPORATE INCOME TAX
132. THE MINIMUM CORPORATE INCOME TAX (MCIT) IS IMPOSED ON-
A) 2% OF GROSS INCOME
B) 10% OF GROSS INCOME
C) 5% OF GROSS INCOME
D) 15% OF GROSS INCOME
A) 2005
B) 2006
C) 2008
D) 2009
A) P7,700
B) 7,040
C) 6,660
D) 12,640
137. MAEKIS CORPORATION HAS THE FOLLOWING DATA:
2009 2010
SALES 1,700,000 2,300,000
COST OF SALES 1,050,000 1,425,000
OPERATING EXPENSES 615,000 480,000
THE INCOME TAX PAYAB LE IN 2009 IS-
A) P13,000
B) 12, 250
C) 35,000
D) 10,500
A) P117,750
B) 17,500
C) 116,000
D) 137,500
A) FALSE, FALSE
B) FALSE, TRUE
C) TRUE, FALSE
D) TRUE, TRUE
142. ADY CORPORATION HAS THE FOLLOWING DATA DURING THE YEAR:
1ST QTR 2ND QTR
NORMAL INCOME TAX P10,000 12,000
MCIT 8,000 25,000
TAXES WITHHELD DURING THE QTR 2,000 EXCESS 3,000
WHT PRIOR YEAR 1,000
THE INCOME TAX PAYABLE BY ADY CORPORATION FOR THE 1ST QUARTER
IS-
A) P7,000
B) 4,000
C) 3,000
D) 2,000
143. IN NUMBER 142, THE INCOME TAX PAYABLE FOR THE 2ND QUARTER
IS-
A) P15,000
B) 20,000
C) 27,000
D) 23,000
A) P43,750
B) 70,000
C) 26,250
D) 40,000
A) P150,000
B) 48,000
C) 148,750
D) 123,750
SPECIAL TOPIC-IMPROPERLY
ACCUMULATED EARNINGS TAX
148. A PENALTY AND A FORM OF DETERRENT TO THE AVOIDANCE OF
TAX UPON SHAREHOLDERS WHO ARE SUPPOSED TO PAY DIVIDENDS
TAX ON THE EARNINGS DISTRIBUTED TO THEM BY THE
STOCKHOLDERS
A) INSURANCE COMPANIES
B) BUSINESS PARTNERSHIPS
C) BANKS
D) CLOSELY-HELD COMPANIES
151. ALL OF THE FOLLOWING, EXCEPT ONE, ARE ADDITIONS TO TAXABLE
INCOME FOR PURPOSES OF COMPUTING IMPROPERLY
ACCUMULATED TAXABLE INCOME-
A) P234,000
B) 265,600
C) 275,500
D) 249,000
A) P81,800
B) 93,000
C) 301,000
D) 70,000
A) P81,500
B) 93,800
C) 91,500 D) NONE
157. ANA CORPORATION HAS THE FOLLOWING DATA DURING THE YEAR:
GROSS SALES P1,540,000
COST OF SALES 645,000
EXPENSES 460,460
IF ANA CORPORATION AVAILED OF THE OPTIONAL STANDARD
DEDUCTION, THE TAXABLE INCOME SHALL BE-
A) P537,000
B) 434,540
C) 741,000
D) 279,000
CHAPTER 13-INCOME TAX OF PARTNERSHIPS, JOINT
VENTURE, ESTATES AND TRUSTS
158. WHEN NINA MATHAY DIED, SHE LEFT REAL PROPERTIES TO
HER HUSBAND AND THREE(3) SMALL CHILDREN. THE HUSBAND
ADMINISTERED THE PROPERTY, THE RENTAL INCOME OF WHICH HE
ACCUMULATED AND LATER USED IN BUYING A PASSENGER BUS.
ARE THE INCOME OF THE INHERITED PROPERTIES AND THE BUS SUBJECT
TO TAX?
PARTNERS BING AND BONG SHARE PROFITS AND LOSSES IN THE RATIO OF
55% AND 45%, RESPECTIVELY.
A) P218,750
B) 187,500
C) 165,000
D) 192,500
167. THE FINAL TAXES ON THE RESPECTIVE SHARE OF BING AND BONG IN
THE PARTNERSHIP INCOME-
BING BONG
A) P25,740.00 21,060.00
B) 31,157.50 25,492.50
C) 24,227.50 19,822.50
D) 30,250.00 55.045.00
NUMBERS 168 AND 169 ARE BASED ON THE FOLLOWING INFORMATION:
PING, PONG AND COMPANY, A PARTNERSHIP OF CPAs, HAD A GROSS
INCOME OF P220,000 AND EXPENSES OF P85,000 DURING THE YEAR:
PING PONG
SHARE IN PROFIT AND LOSS RATIO 75% 25%
INCOME FROM OTHER BUSINESSES P125,000 P325,000
EXPENSES 80,000 190,000
AMOUNT WITHDRAWN
FROM PARTNERSHIP 30,000 12,500
FILING STATUS MARRIED UNMARRIED
DEPENDENT CHILDREN NONE 2
168. THE INCOME TAX PAYABLE BY THE PARTNERSHIP IS-
A) P72,600
B) NONE
C) 44,550
D) 45,900
A) P20,500
B) 18,500
C) 11,500
D) 59,000
A) P12,500
B) 48,000
C) 16,500
D) 24,000
A) P3,000
B) 4,000
C) 7,000
D) 22,000
173. THE TOTAL FINAL TAXES DUE ON PANDAK IS-
A) P17,000
B) 14,600
C) 22,200
D) 15,200
A) ESTATE
B) LEGACY
C) TRUST
D) WILL
175. AN HEIR WHO INHERITS PERSONAL PROPERTY BY WILL IS CALLED-
A) LEGATEE
B) DEVISEE
C) TRUSTOR
D) BENEFICIARY
A) LEGATEE
B) DEVISEE
C) TRUSTOR
D) BENEFICIARY
A) P30,000
B) 2,500
C) 5,500
D) 50,000
A) A WILL
B) A TRUST
C) AN INHERITANCE
D) PACTO DE RETRO
DURING THE YEAR, LUCAS CREATED TWO SEPARATE FUNDS FOR HIS SON
BARABAS, AND APPOINTED CAIPAS AND JUDAS AS TRUSTEES, THE
BUSINESS INCOME OF THE TRUSTS ARE AS FOLLOWS:
A) P143,000
B) 23,250
C) 175,000
D) 300,000
184. UNDER SECTION 39(B) OF THE TAX CODE, HOW MUCH SHALL BE TAKEN
INTO ACCOUNT IN COMPUTING NET INCOME, IF A GAIN IS REALIZED
BY AN INDIVIDUAL TAXPAYER FROM THE SALE OR EXCHANGE
OF CAPITAL ASSETS( OTHER THAN REAL PROPERTIES AND SHARES OF
STOCKS) HELD FOR MORE THAN 12 MONTHS?-(RPCPA)
A) CAPITAL ASSETS
B) LIQUID ASSETS
C) ORDINARY ASSETS
D) FIXED ASSETS
A) INDIVIDUAL
B) ESTATES
C) CORPORATION
D) TRUSTS
A) P484,000
B) 444,000
C) 435,500
D) 447,000
191. JOSE SIO, SINGLE, HAD THE FOLLOWING DATA ON INCOME AND
LOSSES:
2008 2009
ORDINARY BUSINESS INCOME P56,700 P60,800
INTEREST ON TIME DEPOSIT WITH PNB 2,000 3,000
SHORT-TERM CAPITAL GAIN 5,000 8,500
LONG-TERM CAPITAL GAIN 3,600 5,200
SHORT-TERM CAPITAL LOSS 8,000 2,900
LONG-TERM CAPITAL LOSS 4,400 -
IN 2008, THE TAXABLE INCOME BEFORE PERSONAL EXEMPTION OF JOSE
SIO-
A) P58,700
B) 53,300
C) 36,700
D) 56,700
A) P15,600
B) 69,000
C) 36,000
D) 45,600
194. ROSE, SINGLE, HAD THE FOLLOWING DATA ON INCOME AND LOSSES:
2008 2009
NET INCOME P25,000 P95,000
CAPITAL GAINS 8,000 40,000
CAPITAL LOSSES 40,000 5,000
THE TAXABLE INCOME IN 2008 IS-
A) P5,000
B) ZERO
C) P(25,000)
D) (57,000)
195. THE TAXABLE INCOME IN 2009 IS-
A) P78,000
B) 55,000
C) 115,000
D) 10,000
A) WASH SALE
B) SHORT SALE
C) AUCTION SALE
D) RESCISSIBLE SALE
198. ABC BOUGHT FROM XYZ CORPORATION TEN SHARES OF STOCK. SIXTY
DAYS THEREAFTER, THE CORPORATION WAS ADJUDGED BANKRUPT
AND ITS STOCK AS WORTHLESS. THE LOSS OF ABC TO BE
REPORTED FOR INCOME TAX PURPOSES IS CLASSIFIED AS:-(RPCPA)
A) A WAGERING LOSS
B) NON-DEDUCTIBLE LOSS FOR INCOME TAX PURPOSES
C) SHORT-TERM CAPITAL LOSS
D) CASUALTY LOSS
200. VIOLETA SOLD HER PRINCIPAL RESIDENCE FOR P5,000,000 WHEN ITS
FAIR MARKET VALUE WAS P6,000,000. THE HOUSE WAS PURCHASED
FIVE(5) YEARS AGO FOR P3,000,000. OUT OF THE PROCEEDS OF P5,000,000,
VIOLETA UTILIZED THE P4,000,000 FOR THE PURCHASE OF A NEW
RESIDENTIAL HOUSE.
A) P360,000
B) 300,000
C) 72,000
D) 60,000
201. BASED ON THE PROBLEM IN NUMBER 200 ABOVE, WHAT IS THE COST
BASIS OF THE NEW RESIDENCE?
A) P3,000,000
B) 2,400,000
C) 4,000,000
D) 5,000,000
NUMBERS 202 AND 203 ARE BASED ON THE FOLLOWING INFORMATION:
A) P32,000
B) 38,000
C) 22,200
D) 42,200
203. ASSUMING THAT THE NET INCOME OF MARIA IN 2009 WAS P130,000
WHICH INCLUDES A CAPITAL GAIN OF P6,000. THE TAXABLE INCOME
BEFORE PERSONAL EXEMPTION IN 2009 IS-
A) P125,000
B) 130,000
C) 124,200
D) 120,000
ON AUGUST 15, 2009, MR. CRUZ SOLD A 500 SQUARE METER RESIDENTIAL
HOUSE FOR P3,000,000. THE HOUSE WAS ACQUIRED IN 2000 FOR P2,000,000.
ON THE DATE OF SALE, THE FAIR MARKET VALUE OF THE HOUSE AS
SHOWN IN THE REAL PROPERTY DECLARATION WAS P2,500,000 AND THE
ASSESSED VALUE AMOUNTED TO P2,200,000. THE ZONAL VALUE WAS P7,000
PER SQUARE METER.
204. THE CAPITAL GAINS TAX IS-
A) P180,000
B) 120,000
C) 150,000
D) 210,000
205. THE CAPITAL GAINS TAX OF MR. CRUZ IF THE PROCEEDS OF SALE WAS
UTILIZED IN ACQUIRING A NEW RESIDENCE-
A) P210,000
B) 150,000
C) 180,000
D) ZERO
A) P210,000
B) 150,000
C) 180,000
D) ZERO
207. THE CAPITAL GAINS TAX PAYABLE ASSUMING THAT MR. CRUZ WILL
UTILIZE ONLY P1,500,000 OF THE PROCEEDS IN ACQUIRING A NEW
RESIDENCE?
A) P90,000
B) 210,000
C) ZERO D) 105,000
A) P18,000
B) 18,900
C) 7,200
D) 9,000
209. LITO HAS THE FOLLOWING RECORDS OF TRANSACTIONS:
CAPITAL GAINS(SHORT TERM) ON SALE OF-
DOMESTIC SHARES LISTED AND TRADED\
IN THE STOCK EXCHANGE P22,400
VACANT LOT, THRU A BROKER, LOCATED IN
MANILA(MARKET VALUE-P700,000) 150,000
RESIDENTIAL HOUSE IN NEW YORK CITY 100,000
CAPITAL LOSS(LONG-TERM) ON SALE OF-
LAND IN VANCOUVER, CANADA 125,000
FAMILY CAR 50,000
THE NET CAPITAL GAIN/(LOSS) OF LITO IS-
A) P12,500
B) (75,000)
C) 148,500
D) (25,000)
A) P2,250
B) 2,625
C) 14,000
D) 11,375
213. ROLLY SOLD 1,000 NOT LISTED AND TRADED SHARES OF STOCKS. THE
DATA OF WHICH ARE AS FOLLOWS:
SELLING PRICE P600,000
FAIR MARKET VALUE 620,000
EXPENSES ON THE SALE 10,000
PURCHASE PRICE 440,000
EXPENSES UPON ACQUISITION 3,000
THE CAPITAL GAINS TAX DUE IS-
A) P13,000
B) 14,000
C) 9,700
D) 12,850
214. NARDA SOLD THE FOLLOWING SHARES OF STOCKS DURING THE YEAR:
LISTED & NOT LISTED LISTED &
TRADED & TRADED & TRADED
SELLING PRICE P1,500,000 630,000 210,000
COST 1,230,000 570,000 170,000
DATE SOLD 01-02-02 03-16-02 11-14-02
THE CAPITAL GAINS TAX PAYABLE IS-
A) P3,000
B) 32,000
C) 11,550
D) 3,150
A) P2,750
B) 1,375
C) 675
D) 55,000
216. THE CAPITAL GAINS TAX ON THE APRIL 5, 2009 SALE IS-
A) P10,400
B) 5,400
C) 5,200
D) ZERO
217. THE CAPITAL GAINS TAX/REFUND ON THE JULY 20, 2009 SALE IS-
A) P3,000
B) (3,000)
C) 1,500
D) ZERO
220. MISS BEAUTY, WHOSE TAXABLE YEAR IS THE CALENDAR YEAR, HAD
THE FOLLOWING STOCK TRANSACTIONS:
• ON SEPTEMBER 20, 2008 PURCHASED 100 SHARES OF THE COMMON
STOCK OF UGLY COMPANY FOR P5,000 OR AT P50 PER SHARE
• ON DECEMBER 11, 2008, SHE PURCHASED 50 SHARES OF
SUBSTANTIALLY IDENTICAL STOCK FOR P2,750 OR AT P55 PER SHARE
• ON DECEMBER 26,2008, SHE PURCHASED 25 ADDITIONAL SHARES OF
SUCH STOCK FOR P1,125 OR AT P45 PER SHARE
• ON JANUARY 2, 2009, SHE SOLD FOR P4,000 THE SHARES PURCHASED
ON SEPTEMBER 20 OR AT P40 PER SHARE
DEDUCTIBLE NON-DEDUCTIBLE
A) P1,000 P0
B) 0 1,000
C) 125 0
D) 250 750
CAPITAL LOSS
ON 2 WEEKS OPTION CONTRACT______ P5,000
CAPITAL GAIN
ON SALE OF BONDS(HOLDING PERIOD: 6 MOS.)_____ 6,000
LOSS ON SALE OF DELIVERY TRUCK HELD
FOR 3 ½ YEARS____ 40,000
GAIN ON SALE OF PERSONAL CAR HELD
FOR 5 YEARS______ 16,000
CAPITAL GAIN ON DIRECT SALE TO BUYERS
OF SHARES OF STOCKS___ 4,000
SALE OF 2-YEAR OLD RESIDENTIAL HOUSE (COST:P540,000)____
550,000
IN 2008, MAUI HAD A NET INCOME OF P5,000 AND A CAPITAL LOSS OF P7,500
A) P17,000
B) 9,000
C) 2,000
D) (7,000)
222. THE NET CAPITAL LOSS CARRY-OVER FROM 2008 IS-
A) P7,500
B) ZERO
C) 9,000
D) 5,000
A) P150,000
B) 120,000
C) 100,000
D) ZERO
A) ZERO
B) P157,500
C) 150,000
D) 300,000
227. THE WIDOW OF YOUR BEST FRIEND HAS JUST BEEN PAID P1,000,000 ON
ACCOUNT OF THE LIFE INSURANCE POLICY OF THE DECEASED
HUSBAND.
SHE ASKS YOU WHETHER SHE SHOULD DECLARE THE AMOUNT FOR
INCOME TAX PURPOSES OR FOR ESTATE TAX PURPOSES-(RPCPA)
A)MEDICAL EXPENSES
B)CONTRIBUTION
C)REPRESENTATION
D)HIGH SCHOOL FEE
229. LANGHAP CORPORATION INCURRED THE FOLLOWING EXPENSES.
WHICH OF THESE EXPENSES IS NON-DEDUCTIBLE?
232. ALL OF THE FOLLOWING, EXCEPT ONE, ARE NOT DEDUCTIBLE FROM
GROSS INCOME
.
233. IN 2009, AZKAL CORPORATION PAID THE FOLLOWING PREMIUMS TO
AN INSURANCE COMPANY IN INSURING THE LIFE OF ITS OFFICIALS
AND EMPLOYEES:
OFFICIAL/EMPLOYEE BENEFICIARY PREMIUMS PAID
A) P60,000
B) 45,000
C) 5,000
D) 15,000
A) BUILDING P30,000
CASH P30,000
B) LEASE EXPENSE-LESLIE 30,000
CASH 30,000
C) REPAIRS EXPENSE 30,000
CASH 30,000 D) NO ENTRY
A) BUILDING P60,000
CASH P60,000
B) REPAIRS EXPENSES 60,000
CASH 60,000
C) ALLOWANCE FOR DEP’N 60,000
CASH 60,000 D) NO ENTRY
238. SUPPOSE THE MAJOR REPAIR INCREASED THE VALUE NBY P40,000 AND
IT ALSO PROLONGED THE LIFE OF THE ASSET, THE ACCOUNTING ENTRY
TO RECORD THE REPAIR IN THE BOOKS OF LEXUS CORPORATION IS-
A) ALLOWANCE FOR DEPRECIATION P60,000
CASH P60,000
B) BUILDING 40,000
CASH 40,000
C) BUILDING 40,000
ALLOWANCE FOR DEPRECIATION 20,000
CASH 60,000
D) NONE OF THE ABOVE
239. CHOOSE THE BEST ANSWER: RGF COLLEGE, INC. A PROPRIETARY
EDUCATIONAL INSTITUTION, SPENT P10 MILLION FOR THE
CONSTRUCTION OF A NEW SCHOOL BUILDING. THE AMOUNT SPENT
FOR THE
CONSTRUCTION-
A) P14,240
B) 14,760
C) 13,600
D) 14,940
246. IN NUMBER 245, THE DEDUCTION OF MANG OTANG IN 2008 ASSUMING
THAT THE INTEREST ON LOAN WAS CAPITALIZED-
A) P14,375
B) 15,000
C) 10,781.25 D) NONE
ON JUNE 20, 2009, HE FILED HIS INCOME TAX RETURN FOR 2008 CLAIMING,
AMONG OTHERS, A DEDUCTION FOR INTEREST AMOUNTING TO P1,500.
THE CIR POINTED OUT THAT A TAX IS NOT INDEBTEDNESS AND THAT
THERE IS A FUNDAMENTAL DISTINCTION BETWEEN A “TAX” AND A
“DEBT”. ACCORDING TO THE CIR, THE DEDUCTIBILITY OF INTEREST ON
INDEBTEDNESS FROM A PERSON’S INCOME TAX CANNOT EXTEND TO
INTEREST ON TAXES.
A) YES, YES
B) NO, YES
C) YES, NO
D) NO,NO
A) BUSINESS TAX
B) VALUE-ADDED TAX
C) PRIVILEGE TAX
D) OCCUPATION TAX
A) ESTATE TAX
B) FRANCHISE TAX
C) DONOR’S TAX
D) SPECIAL ASSESSMENT
A) NON-RESIDENT ALIENS
B) FOREIGN CORPORATIONS
C) RESIDENT ALIENS WITH INCOME DERIVED SOLELY FROM SOURCES
WITHIN THE PHILIPPINES
D) BENEFICIARIES OF THE ESTATES AND TRUSTS
254.THE FOLLOWING TAXPAYERS CAN CLAIM TAX CREDIT EXCEPT ONE-
(RPCPA)
A) DOMESTIC CORPORATIONS
B) MEMBERS OR BENEFICIARIES OF PARTNERSHIP OR TRUST
C) RESIDENT FILIPINO CITIZENS
D) NON-RESIDENT ALIENS
A) P105,000
B) 60,000
C) 90,000
D) 110,000
A) P75,000
B) 65,000
C) 60,000
D) 72,000
257. PENNY GARCIA , SINGLE HAS THE FOLLOWING DATA DURING THE
YEAR:
GROSS INCOME, PHIL. P120,000
GROSS INCOME, USA 200,000
EXPENSES, PHIL. 80,000
EXPENSES, USA 160,000
TAX PAID IN THE STATE OF CALIFORNIA 40,000
FEDERAL INCOME TAX PAID 8,500
IF THE FOREIGN TAX PAID IS CLAIMED AS DEDUCTION, THE INCOME TAX
DUE IS-
A) P51,500
B) 5,725
C) 12,800
D) 1,650
258. IN NUMBER 257, IF YOU ARE THE TAXPAYER, WILL YOU OPT TO CLAIM
THE FOREIGN TAX PAID AS TAX CREDIT OR AS A DEDUCTION?
CHAPTER 9-LOSSES
259. ONE IS NOT A DEDUCTIBLE LOSS-(RPCPA)
A) MAX ONLY
B) JESS ONLY
C) BOTH OF THEM
D) NEITHER OF THEM
A) P1,000,000
B) 2,615,000
C) 1,615,000
D) 1,535,000
A) NONE
B) P200,000
C) 185,000
D) 215,000
A) P1,000,000 IN 2008
B) 1,000,000 IN 2009
C) 500,000 IN 2008
D) 500,000 IN 2009
A) ZERO
B) 8,500
C) 8,600
D) 10,000
A) P1,928,000
B) 2,000,000
C) ZERO D) 1,428,000
267.BASED ON THE DATA IN NO. 266 ABOVE, THE ACCOUNTING ENTRY IN
THE BOOKS OF VIOLETA
A) P250,000
B) 800,000
C) 50,000
D) 600,000
269. BASED ON THE DATA IN NUMBER 268 ABOVE, THE DEDUCTIBLE LOSS
ON PROPERTY B IS-
A) P600,000
B) 350,000
C) 500,000
D) 1,200,000
YEAR 2009:
GROSS INCOME FROM SERVICES 3,560,000
OPERATING EXPENSES 1,250,000
A) (P131,250)
B) (119,000)
C) (180,000)
D) (250,000)
A) P1,335,000
B) 2,150,000
C) 1,400,000
D) 1,435,000
A) P238,500
B) 278,250
C) 130,462.50
D) 97,387.50
A) P220,000
B) 280,000
C) 200,000
D) 210,000
A) P97,500
B) 35,000
C) 55,000
D) 110,000
278. STATEMENT 1: THE TERM “NET OPERATING LOSS” SHALL MEAN THE
EXCESS OF ALLOWABLE DEDUCTION OVER GROSS INCOME OF THE
BUSINESS IN A TAXABLE YEAR.
A) STATEMENT 1 ONLY
B) STATEMENTS 1 AND 2
C) STATEMENT 3 ONLY
D) NONE
2007
GROSS SALES P3,300,000
COST OF SALES 2,400,000 1,070,000 380,000
DIVIDEND-RESIDENT
FOREIGN CORP. 140,000 - 32,000
INTEREST INCOME ON
NOTES RECEIVABLE 28,000 16,400 -
CAPITAL GAIN - 13,000 18,500
CAPITAL LOSS 20,000 - 22,000
279. THE TAXABLE INCOME/OPERATING LOSS IN 2007 IS-
A) (P575,000)
B) (407,000)
C) (427,000)
D) 1,068,000
A) ZERO
B) 274,400
C) (132,600)
D) 254,400
A) P18,000
B) ZERO
C) 170,600
D) 18,000
A) P261,400
B) ZERO
C) 274,400
D) 1,286,400
283. THE TAXABLE INCOME/OPERATING LOSS IN 2009 OF BETTY IS-
A) P190,700
B) 939,580
C) 248,200
D) 232,500
A) ZERO
B) P62,000
C) 60,000
D) 90,000
285. NINI COMPANY WAS MERGED INTO OTOY COMPANY. NINI COMPANY
TRANSFERRED ALL ITS PROPERTIES WITH A BOOK VALUE OF P4,000,000 TO
OTOY COMPANY FOR WHICH IT RECEIVED SHARES OF THE LATTER WITH A
FAIR MARKET VALUE OF P3,600,000. SANKO WAS A STOCJHOLDER OF NINI
COMPANY (WHICH HE ACQUIRED AT A COST OF P500,000) WHEN THE
MERGER WAS EFFECTED AND RECEIVED SHARES OF OTOY COMPANY
WITH A FAIR MARKET VALUE OF P360,000. THE AMOUNT OF LOSS
DEDUCTIBLE BY NINI COMPANY IS-
A) P400,000
B) 4,000,000
C) 140,000
D) ZERO
286. IN NUMBER 285 ABOVE, THE AMOUNT OF LOSS DEDUCTIBLE BY OTOY
IS-
A) P400,000
B) 140,000
C) 500,000
D) ZERO
A) P1,000,000
B) 960,000
C) 40,000
D) ZERO
288. SHASHA, SINGLE, HAS THE FOLLOWING DATA IN 2008 AND 2009:
2008 CASE1 CASE2 CASE3
NET INCOME BEFORE
PERSONAL EXEMPTION
AND BAD DEBT 50,000 50,000 50,000
LESS: BAD DEBT
WRITTEN OFF 70,000 68,000 30,000
NET INCOME AFTER
BAD DEBT (20,000) (18,000) 20,000
2009
BAD DEBT
RECOVERED 70,000 60,000 30,000
IN 2009, THE TAXABLE AMOUNTS BEFOREW PERSONAL EXEMPTION ARE:
CASE1 CASE2 CASE3
A) 50,000 50,000 50,000
B) 50,000 42,000 30,000
C) 70,000 68,000 30,000
D) (20,000) (8,000) 20,000
289. THE FOLLOWING WERE TAKEN FROM THE INCOME STATEMENT OF ABC
CORPORATION FOR THE TAXABLE YEAR 2009:-((RPCPA)
ADDITIONAL INFORMATION:
A) P280,000
B) 260,000
C) 330,000
D) 340,000
A) P35,795.45
B) 43,750
C) 49,431.82
D) 31,250
A) P151,000
B) 149,000
C) 141,000
D) 139,000
296. WHAT WOULD BE THE ALLOWABLE DEDUCTION FOR P10,000
CONTRIBUTION MADE BY A RESIDENT CITIZEN TO A CHARITABLE
INSTITUTION, FROM HIS P60,000 NET INCOME BEFORE CONTRIBUTION?
A) P6,000
B) 7,000
C) 3,000
D) 10,000
A) P92,000
B) 93,500
C) 88,500
D) 100,000
A) P550,000
B) 600,000
C) 560,000
D) 570,000
A) P670,000
B) 640,000
C) 580,000
D) 570,000
A) P15,000
B) ZERO
C) 10,000
D) 100,000
301. AN INDIVIDUAL TAXPAYER MADE THE FOLLOWING CONTRIBUTIONS:
A) P20,000
B) 30,000
C) 55,000
D) 55,500
A) P550,320
B) 814,500
C) 542,520
D) 889,500
A) ACCRUAL BASIS
B) CASH BASIS OR CASH RECEIPTS AND DISBURSEMENTS METHOD
C) HYBRID METHOD
D) CROP YEAR BASIS
A) CASH BASIS
B) CROP YEAR BASIS
C) CONSTRUCTIVE RECEIPT OF INCOME
D) ACCRUAL METHOD
309. ESTRELLA USES ACCRUAL METHOD OF ACCOUNTING. SHE OWNS A
LAND WHICH SHE LEASED TO GORDON FOR 2 YEARS AT AN ANNUAL
RENTAL OF P100,000. ON JULY 1, 2007, SHE RECEIVED P200,000 FROM
GORDON REPRESENTING THE RENTAL COVERING THE PERIOD JULY 1, 2007
TO JUNE 30, 2009.
A) P50,000
B) 200,000
C) 100,000
D) 150,000
310. BASED ON THE DATA IN NO. 309 ABOVE, GORDON, USING CASH
METHOD CAN DEDUCT AN EXPENSE OF-
A) P50,000
B) 200,000
C) 100,000
D) 150,000
314. ALL OF THE FOLLOWING, EXCEPT ONE, ARE NOT TAKEN INTO
ACCOUNT IN DETERMINING THE CORRECT AMOUNT OF INITIAL
PAYMENTS
A) COMMISSIONS
B) OTHER SELLING EXPENSES
C) INSTALLMENT PAYMENTS IN THE YEAR OF SALE
D) GROSS PROFIT
A) P50,000
B) 25,000
C) 37,500
D) 12,500
A) P50,000
B) 25,000
C) 37,500
D) 12,500
A) P100,000
B) 250,000
C) 150,000
D) 200,000
A) P150,000
B) 550,000
C) 700,000
D) 250,000
A) P42,000
B) 25,200 C) 9,000 D) NONE
A) P42,000
B) 25,200
C) 16,800
D) NONE
A) P45,000
B) 90,000
C) 200,000 D) NONE
A) P200,000
B) 155,000
C) 45,000 D) NONE
A) P75,000
B) 300,000
C) 45,000
D) 30,000
A) P6,500
B) 4,000
C) 5,000
D) 5,500
A) P6,500
B) 4,000
C) 5,000
D) 5,500
A) STATEMENT 2
B) STATEMENT 1
C) STATEMENTS 1 AND 2
D) NEITHER STATEMENTS
A) P57,000
B) 30,000
C) 45,500
D) 72,500
A) P96,969
B) 18,823
C) 17,767
D) 88,235
A) P28,229
B) 23,529
C) 73,529
D) 25,760
A) P6,400
B) 9,412
C) 10,303
D) NONE
340. BASED ON THE SAME DATA IN NO. 339 ABOVE, THE DEDUCTIBLE
EXPENSE FROM THE GROSS INCOME OF XYZ CORPORATION IS-
A) P8,000
B) 25,000
C) 42,000
D) 34,000
342. BASED ON NUMBER 341 ABOVE, THE DEDUCTIBLE EXPENSE FROM THE
GROSS INCOME OF EXTRA COPORATION IS-
A) P14,705.88
B) 4,705.88
C) 12,132.35
D) 2,941.18
A) P186,000
B) 136,000
C) 50,000
D) 250,000
344. THE CORPORATION GAVE A BRAND NEW CAR TO ITS SALES MANAGER.
THE FRINGE BENEFIT GIVEN IS-
A) P64,000
B) 50,000
C) 186,000
D) 250,000
A) DUPLICATE
B) TRIPLICATE
C) QUADRUPLICATE
D) QUINTUPLICATE
A) PRESIDENT
B) GENERAL MANAGER
C) TREASURER
D) INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
A) FILIPINO
B) CHINESE
C) ENGLISH
D) SPANISH
A) P130,000
B) 200,000
C) 220,000
D) 165,000
ADDITIONAL INFORMATION:
3.THE COMPANY WROTE OFF IN 2008 AGAINST ALLOWANCE FOR BAD DEBTS
UNCOLLECTIBLE RECEIVABLES AMOUNTING TO P15,000 WHICH WAS
ALLOWED AS DEDUCTION FROM GROSS INCOME. THIS AMOUNT WAS
RECOVERED IN 2009.
A) P158,320
B) 184,537.50
C) 35,763.50
D) 158,175
INCOME:
COMPENSATION INCOME P180,000
CASH DIVIDEND 122,800
STOCK DIVIDENDS 73,500
PROPERTY DIVIDENDS 27,000
GAMBLING WINNINGS 23,100
DONATION RECEIVED 16,000
GAIN ON SALE OF CAPITAL ASSETS-15 MONTHS 8,000
GAIN ON SALE OF HIS VACANT LOT 120,000
INCOME ON RICE LAND
TOTAL
EXPENSES:
A) P246,940
B) 236,840
C) 66,040
D) 256,840
13. HOLIDAY PAY, OVERTIME PAY, NIGHT SHIFT DIFFERENTIAL PAY AND
HAZARD PAY RECEIVED BY AN EMPLOYEE WHO IS RECEIVING A
MONTHLY BASIC PAY OF P20,000 ARE EXEMPT FROM INCOME TAX.
24. PROCEEDS OF LIFE INSURANCE ARE EXEMPT FROM INCOME TAX IF THE
DESIGNATED BENEFICIARY IS IRREVOCABLE.