Midterm Quiz 2

Midterm Quiz 2
1. A general professional partnership is exempt from income tax, but is required to

file an income tax return.
a. Because all income earners are required to file income tax returns.
b. For statistical purposes.
c. Because the net income of the partnership will be traced into the
income tax return of the partners.
d. None of the above.
2. A partnership is formed by persons for sole purpose of common profession, no

part of the income of which is derived from engaging in any trade or business.
a. General professional partnership

b. Joint accounts
c. Joint venture
d. Trading partnership
3. A taxable partnership may be subject to the following taxes:

I. Minimum corporate income tax
II. Gross income tax.
III. Improperly accumulated earnings tax.
a. I and II only
b. I, II and III
c. I and III only
d. I only
This study source was downloaded by 100000857609153 from CourseHero.com on 11-21-2022 07:20:36 GMT -06:00
https://www.coursehero.com/file/93771218/Midterm-Quiz-2docx/
4. For purposes of taxation, which of the following statements regarding partnership
is correct?
I. Classified into two major categories, partnership in trade and general
professional partnership.
II. Partnership in trade is treated as corporate taxpayer.
III. General professional partnership is exempt from income tax
a. I only
b. I and III only
c. I and II only
d. I, II and III
5. In a general professional partnership (GPP)

a. The GPP shall be taxed on its income in the same manner as private
partnerships
b. The GPP shall report total partnership income and each individual
partnership’s share of that income.
c. None of the above
d. The partners are not liable for taxes on income withdrawn from the
partnership
6. Juan and Ponce are partners in a business partnership sharing profits and losses
in the ratio of 55:45. The following data on income and expenses of the
partnership show:
Gross income P750,000

Expenses 200,000
Dividend received from a domestic corporation 20,000
Bank interest income, Metrobank (net) 80,000
What are the correct amounts of final taxes withheld on the respective shares of
Juan and Ponce in partnership income?
Juan Ponce
a. 25,025 20,475
b. 25,116.50 20,587.50
c. P21,175 P17,325
d. 26,675 21,825
7. Ramos Toribio Partnership is a general professional partnership, with Ramos,

married, and Toribio, single, participating equally in the income and expenses.
The following are the data for the partnership and the partners:
RT Partnership Ramos Toribio

Gross Income P600,000 P150,000 P200,000
Expenses 350,000 70,000 120,000
The gross income of Ramos from the partnership is:

a. P125,000
b. P640,0000
c. P300,000
d. P0
8. Ramos Toribio Partnership is a general professional partnership, with Ramos,

married, and Toribio, single, participating equally in the income and expenses.
The following are the data for the partnership and the partners:
RT Partnership Ramos Toribio

Gross Income P600,000 P150,000 P200,000
Expenses 350,000 70,000 120,000
The taxable income of Ramos is

a. P205,000
b. P80,000
c. P0
d. P155,000
9. Statement 1: All partnerships are taxed in the same manner as Corporation
Statement 2: The income of a general commercial partnership is also subject to
MCIT or Normal corporate Tax whichever is applicable.
a. Statement 1 is false but statement 2 is true

b. Statements 1 and 2 are true
c. Statement 1 is true but statement 2 is false
d. Statements 1 & 2 are false
10. Statement 1: Each partner of a general professional partnership shall report as

gross income in his return, his distributive share in the net income of the
partnership, whether actually or constructively received.
Statement 2: If the partner of a GPP elects the itemized deductions, his tax a tax
shall be based on his share of the net income of the GPP.
a. Statements 1 and 2 are true

b. Statements 1 & 2 are false
d. Statement 1 is false but statement 2 is true
11. Statement 1: For purposes of computing the distributive share of the partners of
a general professional partnership, the net income of the partnership shall be
computed in the same manner as a corporation.
Statement 2: Partners of a taxable partnership are considered as shareholders
and profits distributed to them by the partnership are considered as dividends
a. Statements 1 and 2 are true

12. Statement 1: If the amount to be distributed to a partner of a GPP is more than
P720,000, it is to be withheld with 15% creditable tax.
Statement 2: The share of a partner in a GPP is subject to final withholding tax of
10% if the amount is below P720,000.
Statement 3: The distributive share of a partner in a commercial partnership is
subject to final tax of 10%.
a. Statements 1, 2 and 3 are false

b. Only statement 2 is false
c. Only statement 3 is false
d. Statements 1, 2 and 3 are true
13. Statement 1: In computing the taxable share of partners in a general professional

partnership, the accounting method used (accrual or cash method) is an
important factor to consider.
Statement 2: Only the share in the net income actually withdrawn by a partner in
a general professional partnership is taxable to him.
a. Statement 1 is true but statement 2 is false

c. Statements 1 and 2 are true
14. Statement 1: Salaries received by a partner from a general professional

partnership is not considered gross compensation income but as part of his
share in the distributable net income after tax of the partnership.
Statement 2: Salaries received by a partner from a business partnership is
considered gross compensation income.
a. Statement 1 is false but statement 2 is true

b. Statement 1 is true but statement 2 is false
d. Statements 1 & 2 are false
15. Statement 1: The distributive share of a partner in the net income of a taxable
partnership is equal to each partner's distributive share of the net income
declared by the partnership for a taxable year after deducting the corresponding
corporate tax.
Statement 2: If a taxable partnership sustains net operating loss, the partners
shall be entitled to deduct their respective shares in the net operating loss from
their individual gross income.
a. Statement 1 is true but statement 2 is false

16. TG Partnership reported for year net profit from trading amounting to P800,000.
The other income included interest income of P8,000, net of 20% final
withholding tax, and dividend income from domestic corporation of P20,000
(gross of tax). Assuming T and G share profits and losses equally, how much is
the applicable tax on the distributive share of T in the earnings of that
partnership?
a. P28,600
b. P29,400
c. P28,000
d. P28,700
17. TGT & Co. is a general partnership in trade and in its fifth year of operations.
During the current taxable year, it had a gross profit from sales and business
expenses of P2,000,000 and P1,000,000, respectively. T, G, and T share equally
in the profits and losses of the partnership. The income tax due of the partnership
is:
a. P300,000
b. P640,000
c. P 40,000
d. P0
18. The income tax due of the partners as a consequence of being a partner in the
Partnership is
a. P0
b. P68,000
c. P70,000
d. P77,000
19. The partner's share in the profits of a general professional partnership is

regarded as received by the partners although not yet distributed. This concept of
income reporting under the Tax Code is known as:
a. Constructive receipt basis of reporting income

b. Instalment basis of reporting income
c. Hybrid method of reporting income
d. Accrual basis of reporting income
20. Which of the following statements is wrong?
a. A co-ownership where the activities of the co-owners are limited to the
preservation of property and collection of income from the property is not
taxable as a corporation.
b. A joint venture for undertaking construction projects is not taxable as a
corporation.
c. A general partnership in trade is not taxable as a corporation.
d. A consortium energy operations pursuant to an operating consortium
agreement under a service contract with the government is not taxable as a
corporation.
Powered by TCPDF (www.tcpdf.org)

Midterm Quiz 2

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Midterm Quiz 2

Uploaded by

Copyright:

Available Formats

Midterm Quiz 2

1. A general professional partnership is exempt from income tax, but is required to

2. A partnership is formed by persons for sole purpose of common profession, no

a. General professional partnership

3. A taxable partnership may be subject to the following taxes:

5. In a general professional partnership (GPP)

Gross income P750,000

7. Ramos Toribio Partnership is a general professional partnership, with Ramos,

RT Partnership Ramos Toribio

The gross income of Ramos from the partnership is:

8. Ramos Toribio Partnership is a general professional partnership, with Ramos,

RT Partnership Ramos Toribio

The taxable income of Ramos is

a. Statement 1 is false but statement 2 is true

10. Statement 1: Each partner of a general professional partnership shall report as

a. Statements 1 and 2 are true

a. Statements 1 and 2 are true

a. Statements 1, 2 and 3 are false

13. Statement 1: In computing the taxable share of partners in a general professional

a. Statement 1 is true but statement 2 is false

14. Statement 1: Salaries received by a partner from a general professional

a. Statement 1 is false but statement 2 is true

a. Statement 1 is true but statement 2 is false

19. The partner's share in the profits of a general professional partnership is

a. Constructive receipt basis of reporting income

20. Which of the following statements is wrong?

You might also like