UGRD-TAX6148 Income Taxation

MIDTERM EXAM

Started on Monday, 11 March 2024, 12:01 PM

State Finished
Completed on Monday, 11 March 2024, 12:20 PM
Time taken 18 mins 29 secs
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Question 1
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De minimisWhich of the following fringe benefit received by a managerial employee is
taxable with final income tax?

Select one:

a.
Foreign travel on account of business convention

b.
Free housing

c.
Educational scholarship related to trade

d.
De minimis
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Question 2
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The taxpayer’s income tax is fixed or computed based on the gross income. The usual
allowable deductions are completely disregarded in computing this income tax.
Gross Income Tax System
Answer:

Question 3
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Which of the following is not included as entertainment, amusement and recreation
expenses of a business?

Select one:

a.
Amusement and recreation expenses

b.
Depreciation or rental facilities

c.
Expenses incurred in accommodating company agents

d.
Fixed representation allowances of key officers subjected to WTH
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Question 4
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Which of the following income is subjected to a monthly creditable withholding tax?

Select one:

a.
Salaries

b.
Winnings

c.
13th month pay

d.
Income from trading
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Question 5
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It represents basic interest of ownership in a corporation. Stockholders holding common
shares are called common stockholders.
Common Stock
Answer:
Question 6
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Interest on loans granted by the employer to employee are taxable fringe benefit when the
interest rate is

Select one:

a.
Lower than 12%

b.
18% and above

c.
Above 12%

d.
12%
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Question 7
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A taxpayer that allowed with both personal exemption and additional exemption is a/an

Select one:
a.
Individual taxpayer

b.
Partnership

c.
Corporation

d.
Estate and trusts
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Question 8
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It is a foreign-born person who is not qualified to acquire Philippine citizenship by birth or
after birth.

Alien
Answer:

Question 9
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Which of the following amount of winnings/prizes is subjected to final tax of 20%?
Select one:

a.
9,000 first prize singing contest

b.
10,000 winnings outside the Philippines

c.
10,000 winnings earned within the Philippines

d.
1,000,000 Philippines Sweepstakes winnings
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Question 10
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A net taxable income of a nonresident alien sole proprietor of a cinematographic film is
subjected to a

Select one:

a.
10% special tax

b.
Normal tax of individuals

c.
32% normal corporate income tax

d.
25% final tax
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Question 11
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The monetary value of fringe benefit if given in money is:

Select one:

a.
Amount granted

b.
Depreciated value

c.
Acquisition cost plus other incidental costs

d.
Fair market value or zonal value whichever is higher
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Question 12
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Which of the following is the correct amount of additional personal exemption?
Select one:

a.
20,000 for each dependent sibling

b.
25,000 for senior citizen

c.
8,000 for each qualified dependent child

d.
25,000 for each qualified dependent child
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Question 13
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Which of the following is required to be filed with quarterly income tax return?

Select one:

a.
Compensation income

b.
Capital gain

c.
Business income

d.
Passive income
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Question 14
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Which value should be used as tax base to compute the fringe benefit on the property
assigned for the use of employers?

Select one:

a.
Cost of the property

b.
Fringe benefit value

c.
Fair market value of the property

d.
Equivalent rental value of the property
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Question 15
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It is a class of the stock refer to the shares of stock to be issued by the charter or by-laws
with respect to dividends and/or assets in case of liquidation over the remainder of the
stocks of the corporation which are called common stock.
Preferred Stock
Answer:

Question 16
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Which of the following will be an appropriate deductible expense for the exhaustion of
intangible asset of wasting asset corporation?

Select one:

a.
Depreciation expense

b.
Exploration expense

c.
Amortization expense

d.
Depletion expense
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Question 17
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 Question text
It is an activity intended to make profit
Business
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Question 18
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The gains or losses on short sales are capital asset transactions.
Short Sales
Answer:

Question 19
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Which of the following is a subject to a creditable withholding tax at source?

Select one:

a.
Royalties

b.
Sale of family home

c.
Holiday pay

d.
Gain on sale of shares of stock
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Question 20
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It refers to the disposal through sale or exchange of ordinary assets or capital assets.
Dealings in Property
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Question 21
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As a rule, business expenses are deductible only if they are incurred in relation to the
business income taxable in the Philippines. If a business expense could not be traced
whether incurred within or not, such expense shall be allocated based on the gross income
within and without.

Situs of Expenses
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Question 22
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It is a sale or disposition of stock or securities where substantially identical securities are
acquired or purchased within a 61-day period, beginning 30 days before the sale and
ending 30 days after the sale.
Wash Sales
Answer:

Question 23
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Which of the following income is allowed to be reduced with itemized deductions?

Select one:

a.
Compensation income

b.
Capital gain

c.
Passive income

d.
Business income
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Question 24
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 Question text
It is absorption of a corporation by another corporation, the latter retaining its own name
and identity and acquiring the assets, liabilities, franchises, and powers of the former, and
the absorbed corporation ceasing to exist as a separate juridical person.
Merger
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Question 25
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It is a corporation’s own stock that has been issued and then reacquired but not cancelled.
Treasury Stock
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Question 26
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These represent reductions of resources due to unintended destruction or deprivation of
things.
Losses
Answer:

Question 27
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The following incomes are not allowed to deduct business expenses except

Select one:

a.
Compensation income

b.
Capital gains

c.
Passive income

d.
Professional income
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Question 28
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Which of the following is entitled to claim NOLCO?

Select one:

a.
Self-employed individual

b.
Employees with respect to his compensation income

c.
OBU
d.
Foreign international carrier
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Question 29
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It represents basic interest of ownership in a corporation. Stockholders holding common
shares are called common stockholders.
Common Stock
Answer:

Question 30
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Which of the following interest expense is deductible in full?

Select one:

a.
Interest expense which is 20% of the interest income for the same year

b.
Interest paid in advance

c.
Interest on personal loan
d.
Interest on tax delinquency
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Question 31
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Which of the following is deductible from related gross income?

Select one:

a.
Net operating loss carry-over

b.
Loss on exchange of capital assets

c.
Worthless and written-off trade receivables

d.
Loss of business property due to theft
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Question 32
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Those who are citizens of the Philippines at the time of the adoption of the 1987 Philippine
Constitution.
Filipino Citizen
Answer:

Question 33
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It must be imposed directly upon the taxpayer.
Tax
Answer:

Question 34
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Which of the following taxes included in the conduct of business is allowed as deduction
from business income?

Select one:

a.
VAT

b.
Withholding on wages of employees

c.
Income tax

d.
Community tax
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Question 35
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Which of the following taxes incurred in the conduct of business is not allowed as deduction
from business income?

Select one:

a.
Foreign income tax claimed as tax credit

b.
Import duties

c.
Local business taxes

d.
Documentary stamp tax
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Question 36
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It is the exhaustion of the natural resources like mines, oil and gas wells due to production.
Depletion Expense
Answer:

Question 37
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All of the following taxes are classified as income taxes, except

Select one:

a.
10% dividend tax

b.
6% capital gains tax on sale of land

c.
20% royalty tax

d.
½ of 1% tax on the selling price of shares of stock traded in the local stock exchange
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Question 38
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They provide current and future benefits in business operations.
 Capital Expenditures
Answer:

Question 39
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If the casual loss on business property is partial, the deductible loss is the

Select one:

a.
Book value of the damaged property

b.
Replacement cost of the damaged property

c.
Lower amount between a and c

d.
Actual cost of damaged on business property
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Question 40
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Which of the following taxes are not allowed as deductions from reportable gross income,
except
Select one:

a.
VAT

b.
Stock transaction tax

c.
Documentary stamp tax

d.
Capital gains tax
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Question 41
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They are usually called “period cost” because they are related to a particular period of time
of business operation.
Revenue Expenditures
Answer:

Question 42
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Which of the following is classified as deductible loss?
Select one:

a.
All of the above

b.
Allowance for bad debts

c.
Depreciation

d.
Embezzlement
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Question 43
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In general, which of the following incomes is not allowed to be reduced with personal
exemption

Select one:

a.
Business income

b.
Compensation income

c.
Professional income

d.
Passive income
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Question 44
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Which of the following is not true?

Select one:

a.
Fringe benefit tax rate is 32%

b.
Fringe benefit tax of a managerial employee is subjected to final income tax

c.
Fringe benefit tax is a creditable withholding tax

d.
Fringe benefit tax is an income tax
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Question 45
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One of the following is not creditable against the total computed tax per ITR
Select one:

a.
Final withholding tax

b.
Income tax paid for the first three quarters for the business per ITR

c.
Foreign income tax paid by the resident citizen

d.
Creditable withholding tax on compensation
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Question 46
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Which of the following business travel expenses is not subjected to fringe benefit tax?

Select one:

a.
Cost of economy airplane ticket

b.
All of the above

c.
Hotel accommodation for $300 per day

d.
Inland travel expense
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Question 47
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This income tax system is a combination of gross compensation income and/or net income
from business, trade or profession to arrive at the total income subject to tabular tax rates.
Global Income Tax System
Answer:

Question 48
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“Any good, service, or other benefit furnished or granted by an employer, in cash or in kind,
in addition to basic salaries, to an individual.
Fringe Benefit
Answer:

Question 49
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The following individual taxpayers are granted basic and additional personal exemption
except
Select one:

a.
Nonresident alien engaged in trade or business in the Philippines with tax treaty reciprocity

b.
Resident citizen

c.
Nonresident citizen

d.
Partnership fully owned by resident Filipino citizen
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Question 50
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Which of the following is a taxable fringe benefit?

Select one:

a.
13th month pay and similar benefits in excess of 30,000php

b.
Employer’s tax payment on behalf of the employee

c.
Life insurance premium on the life of employee borne by the employer.

d.
All of the above
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