Income Tax Exam PDF

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For purposes of income taxation, which of the following is not considered as a corporation a. General professional partnership b. Business partnership c. Unregistered partnership d. Joint stock companies Which of the following businesses is not taxable as a corporation? a. Blossom, Buttercup and Bub...

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1. For purposes of income taxation, which of the following is not considered as a corporation a. General professional partnership b. Business partnership c. Unregistered partnership d. Joint stock companies 2. Which of the following businesses is not taxable as a corporation? a. Blossom, Buttercup and Bubbles contributed ₱500,000 each and opened up a department store in the downtown. They agreed that whatever net profit is earned will be distributed equally to them. They did not bother to register the business with the Securities and Exchange Commission. b. Dan and Nie, two senior staff auditors of a big accounting and auditing firm, resigned from their job and organized a new firm which they named as Dan, Nie and Company, CPA’s. c. Cath, Dan, Liz and Ken formed a business organization with the following agreed features (1) they are deprived of their general agency to act on behalf of their ventures; (2) the powers of management are vested in the board of trustees; (3) the ownership is represented in transferable certificates; (4) the business continues for its fixed term notwithstanding the death or disability of one of them; and (5) the liability of the partners is not limited to their contributions. d. A group of five entrepreneurs had organized, filed and registered the articles of incorporation of Frozen Corporation. It has an authorized capital stock of ₱10 million dividend into 100,000 shares each share having a par value of ₱100. 3. Which of the following may not raise income for the government? a. Power of taxation b. Police power c. Eminent domain d. Privatization of government’s capital assets 4. A resident corporation is one that is (BEQ) a. Organized under the laws of the Philippines that does business in another country. b. Organized under the laws of a foreign country that sets up a regional headquarter in the Philippines doing product promotion and information dissemination. c. Organized under the laws of the Philippines that engages business in a special economic zone; d. Organized under the laws of a foreign country that engages in business in Makati City, Philippines. 5. “Taxable net income receive during each year from all sources” is the tax base for income tax purposes of this class of taxpayers (RPCPA) a. Domestic corporations b. Resident corporations c. Resident foreign corporations engaged in trade or business in the Philippines. d. Resident foreign corporations not engaged in trade or business in the Philippines.

6. One of the following is taxed on gross income a. Domestic corporation b. Resident foreign corporation c. Non-profit cemetery d. Nonresident foreign corporation 7. Interest income of a domestic commercial bank derived from a peso loan to a domestic corporation in 2014 is (BEQ) a. Subject to the 30% income tax based on its net taxable income; b. Subject to the 20% final withholding tax; c. Subject to the 7.5% final withholding tax;

d. Subject to 10% final withholding tax. 8. HIJ Company, a domestic corporation has the following data: Income tax for 2013 ₱110,000 Less Tax credits ₱125,000 Excess tax credits ₱ 15,000

2014 Income net of 1% withholding tax Deductions

1st quarter ₱495,000 ₱460,000

For the 1sst quarter of 2014, the corporation will report: (RPCPA) a. Excess tax credit of ₱6,000 b. Tax payable of ₱7,000 c. Excess tax credit of ₱8,000 d. Tax payable of ₱2,000 9. A domestic corporation has the following data Excess tax credit from 2014 ₱15,000 For year 2015 1st Quarter 2nd Quarter Income net of 1% withholding tax Deductions

₱495,000 ₱460,000

₱792,000 ₱700,000

How much is the income tax still due and payable in the second quarter? (RPCPA) a. ₱21,000 b. ₱14,000 c. ₱10,400 d. ₱29,440 10. If the gross income from unrelated activity exceeds 50% of the total gross income derived by any private educational institution, the rate shall be 30% based on the entire taxable income. This principle is known as a. Constructive receipt b. Tax benefit rule c. End result doctrina d. Predominance test 11. In 2015, Science University a proprietary educational institution registered with Securities and Exchange Commission (SEC) and the Commission on Higher Education (CHED), spent ₱15,000,000 for the construction of a new building. For income tax purposes, this amount maybe: a. Claimed entirely as deduction from its 2009 gross income. b. Classified as an asset or expensed outright, at the option of the government. c. Classified as an asset or expensed outright, at the option of the taxpayer. d. Classified as an asset and claim an annual depreciation over the life of the building.

12. A Filipino citizen who works and derives income from Hongkong is a resident citizen if he stayed in Hongkong a. For less than 180 days b. For more than 180 days c. For 183 days or more d. For less than 183 days 13. Who of the following taxpayers is taxed based on their gross income? a. Resident citizen b. Resident alien c. A citizen that is taxable within and without the Philippines d. Non-resident alien not engaged in business in the Philippines 14. The share in profits of a partner in a general professional partnership is regarded as received by him and thus taxable although not yet distributed. The principle is known as a. Actual receipt of income...