Quiz #1

1. Which is not correct? The P90,000 limit on gross benefits of

employees
Does not include employees of private entities

2. The following are exclusion from gross income, except

Stock option plan

3. The following shall be excluded from gross income, except

Advances for travelling expenses computed on a daily basis
and are paid to an employee to perform his duty

4. Which of the following items that reduce salaries of

employee is not an exclusion from gross income?
IOUS

5. Which is not compensation?

All of the given

6. The following are taxable recoveries from damages except

Damages for loss of goods and other belongings

7. Which is correct about source of income?

All are correct

8. For the life insurance premium paid by the employer to be

included as gross income of employee, the designated
beneficiary...
The insured person
9. The following are forms of compensation income except
Sales

10. Which of the following is not a compensation income?

Professional fees

11. Which of the following is taxable?

Social security benefit received by a balikbayan from
employer abroad

12. A stock dividend received from a domestic corporation by a

nonresident individual not doing business in the Philippines
is
Subject to 10% final tax
Quiz #2

1. Income of any kind, to the extent required by any treaty

obligation building upon the Government of the
Philippines, are exempt from income tax.
True

2. Prizes and awards granted to athletes in local and

international sports competitions and tournaments held in
the Philippines or abroad and sanctioned by their national
sports association are not exempt from income tax
False

3. Remuneration for services as employee of a non-resident

alien individual, foreign partnership or foreign corporation
constitute compensation only if such employer is engaged
in trade or business within the Philippines.
False

4. Compensation means all remuneration for services

performed by an employee for his employer under an
employer- employee relationship.
True

5. Income derived from illegal sources, such as gambling,

extortion, theft, bribes, embezzlement and smuggling are
not Taxable
False
6. A non-taxable stock dividends does not constitute income if
the new certificate plus the old ones change the
proportionate interest of the stockholder in the net assets
of that corporations.
True

7. The proceeds of life insurance policies paid to the heirs or

beneficiaries upon the death of the insured are exempt
from income tax and if such amounts are held by the
insured are exempt from income tax and if such amounts
are held by the insurer under an agreement to pay interest
thereon, the interest payments shall be excluded from
gross income.
False

8. Passive income subject to final tax shall form part of the

gross income for purposes of computing the normal
income tax liability of an individual and corporations.
False

9. In general, individuals who follow an independent trade,

business or profession, in which they offer their services to
the public, are employees.
False

10. Pensions are taxable to the extent of the amount received

except if there is an approved pension plan by the Bureau
of Internal Revenue.
True
11. Facilities and privileges furnished by an employer to his
employees, are not considered as compensation if such
facilities or privileges are of relatively small value and
furnished by the employer merely as a means of promoting
the health, goodwill, contentment, or efficiency of his
employees.
True

12. Compensation from damages if it represent payment for

loss of expected profits are taxable but compensatory
damages constituting returns of capital are not taxable
True

13. Prizes and awards received in recognition of religious,

charitable, scientific, educational, artistic, literary or civic
achievement are not taxable if the he recipient was
selected without any action on his parts to enter the
contest or proceedings and the recipient is not required to
render substantial future services as a condition to
receiving the prize or award.
True

14. Gross income derived from interest is only such interest as

arising from indebtedness, that is, compensation for the
loan or forbearance of money, goods or credits.
True
15. The portion of each annuity payment that represents
return of premium is not taxable while that portion that
represents interest is taxable.
True

16. Tips or gratuities paid direct to an employee by a customer

of the employer which are not accounted for by the
employee to the employer are not considered as taxable
income.
False

17. Dividends are distribution made by a corporation out of its

earnings or profits accrued since March 1, 1913, and
payable to its stockholders, whether in money or in other
prope...
True

18. Overtime pay and night shift differential are not subject to
tax
False

19. In general, the situs of the income whether within or

without the Philippines, is determined by the place where
the service is rendered.
True

20. Thirteen months pay and other benefits received by

officials and employees of public and private entitles are
 exempt provided, however that the total exc... during
taxable year.
True

21. Holiday pay and hazard pay are exempt from income tax.
False

22. Employer is an individual performing services under an

employer-employee relationship.
False

23. if services are paid for in a medium other than money, it is

not to be included as compensation.
False

24. In addition to rent, other considerations which the lessee

may pay to third parties such as interest, taxes, dividends
and insurance premium are taxable to the lessee.
True

25. Payroll period means the period of services for which a payment
of compensation is ordinarily made to an employee by his
employer.
True
26. Amounts received through accident or health insurance or
under Workmen's Compensation Acts, as compensation for
personal injuries or sickness plus the amounts of any...
received are exempt from income tax.
True
Quiz #3

1. Which of the following is not deductible from business income?

Loss on exchange of capital assets

2. A self-employed taxpayer may deduct from his gross income

either itemized or OSD

3. If the contribution or donation is subject to limit, the allowable

amount as deductions should be limited to
5% of the business income after itemized deduction but before
contribution of corporate taxpayer

4. Optional Standard Deduction for corporation is computed as 40%

of
gross income

5. If the taxpayer has interest income subjected to 20% final tax and
at the sme time incurred an interest expense during the taxable
year, the interest expenses shall be reduce by
33%

6. A resident citizen practicing his profession donated gifts worth

P60,000 to Home for the Angels, an accredited non-governmental
organization. The taxpayer's gross income for the taxable year is
P2,000,000 while the deductions is P1,500,000 excluding the
donation. How much of his donation shall be allowed as
deductions?
P 50,000
7. The following are requisite for interest expense to be allowed as
deduction from business and or professional income, except
All of the given are correct

8. Which of the following is deductible from related gross income?

Personal expenses

9. The following are taxes not allowed as deduction from gross

income, except
Municipal tax

10. Interest on loans used to acquire capital equipment or machinery

in connection with a taxpayer's trade, business or profession may
be
a) a deductible item from gross income
b) treated as capital expenditure
Either A or B

11. As a general rule, taxes are deductible, except

Income tax
12. Assume that Mr. Zorro acquired a machine at a cost of P7,600,000
with no salvage value. The useful life of the machine is estimated
to be 25 years. Assuming that straight line method was used, the
annual depreciation on the machine is
P 304,000

13. The worthlessness of an account receivable may be ascertained

due to the following, except
When the debt is supported by a guarantor or surety
14. Optional Standard Deduction for an individual taxpayer is
computed as 40% of
gross sale or receipts

15. Which of the following income is allowed to be reduced with

itemized deductions?
Business income

Quiz #4
1. In cases of deductions and exemption on income tax returns,
doubt shall be resolved.
Strictly against the taxpayer

2. This is not a requisite for business expense to be deductible.

It must be paid during the taxable year

3. Political campaign contributions are not deductible from gross

income (2 questions)
Since they do not help earn the income from which they are to be
deducted.

4. Which of the following is allowable expense(s) of an employer?

none of the given

5. Which of the following can de deducted from the gross income in

the year paid or incurred?
Repair that keep the property in its ordinary efficient operating
condition
6. Which of the following is not deductible from gross income?
Bribes, kickbacks and other similar payment

7. Which of the following is a deductible expense for income for tax

purpose?
none of the given

8. Which of the following is not a characteristic of a deduction?

An immunity or privilege, a freedom from a change or burden to
which others are subjected.

9. The following are allowable compensation expenses of the

employer, except
Cash dividends and paid
Quiz #5
1.For the purpose of determining the tax credit that may be allowed
a taxpayer, foreign income taxes shall mean taxes proper only,
hence, interest, surcharge or penalty relative to tax delinquency shall
not be credited.
True

2.Foreign income taxes means

taxes proper only

3.At the option of the taxpayer and irrespective of the method of

accounting employed in keeping his books, the law may allow him to
claim tax credit in the year in which the taxes for the foreign country
accrued, provided that such election must be followed in returns for
all subsequent years which means that no portion of any such tax
shall be allowed as deduction from gross income.
True

4.Tax credit refers to the taxpayer's right to deduct from the income
tax due the amount of tax he/it has paid to a foreign country subject
to limitation.
True

5.How may a taxpayer entitled to foreign tax credit claim the same?
The right to deduct tax paid is only an alternative to the right to
foreign tax credit
6.If the tax payer is entitled to a foreign tax credit and he did not
choose to exercise such right, such tax credit may be allowed as
deduction from gross income.
True

7.Tax deduction is a deduction from gross income while tax credit is

a deduction from Philippine income tax itself.
True
8.If a tax payer signifies in his return his desire to claim a credit for
foreign taxes, it is understood that it shall apply to income taxes paid
to all foreign countries and no portion of such tax shall be allowed as
a deduction from gross income.
True

9.Who is NOT entitled to foreign tax credit?

Non-resident foreign corporation

10.Who is NOT entitled to foreign tax credit?

All of the given
QUIZ #6
1. Ordinary gain includes capital gains such as those derived from
the performance of services, whether personal or professional
and those accruing from business
True

2. Net capital gain is the excess of the gain for sales or exchange of
capital assets over the losses from such sales or exchange while
net capital loss is the excess the losses from sales or exchange of
the capital assets over the gains from such sales or exchange.
True

3. Stocks held by dealers in securities are classified as capital assets.

False

4. When deposing of a property, the nature of the same (ex whether

capital or ordinary assets) does not matter because capital and
ordinary assets are given the same tax treatment.
False

5. The net capital gains realized on stock transactions shall be

included in the gross income of the seller in computing his normal
income tax liability.
False

6. An individual taxpayer may elect to declare gains realized from a

sale or disposition of real property to the government under
Section 24(A) of the Code
False
7. if the cost of value of the property cannot be convincingly shown
by the taxpayer, then the fair market value shall be considered
the gain.
True

8. Capital assets include all properties held by the taxpayer whether

or not connected in trade or business including those enumerated
as ordinary assets,
False

9. An individual is qualified to account for his gain or loss on an

installment basis, if the initial payment exceeds 25% of the selling
price.
False

10. As a general rule the entire amount of gain or loss arising

from sales or exchange of real or personal property shall be
recognized such that a gains taxable while loss is deductible
True