Quiz 24 August 2019, questions and answers PDF

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1. Statement I: Tax evasion is known as tax minimization while tax avoidance is known astax dodging.Statement II: Real estate tax is not a national tax.a. True; Trueb. False; Falsec. True; Falsed. False; True2. Statement I: In the case of intangible personal property, as a rule, situs is the domicil...

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1. Statement I: Tax evasion is known as tax minimization while tax avoidance is known as tax dodging. Statement II: Real estate tax is not a national tax. a. True; True b. False; False c. True; False d. False; True 2. Statement I: In the case of intangible personal property, as a rule, situs is the domicile of the owner even if he has acquired a situs in another place.

Statement II: In a

gratuitous transfer of property, situs is the taxpayer’s residence, citizenship or location of the property. a. True; True b. False; False c. True; False d. False; True 3. Which statement is true? Income tax a. Is a tax on all yearly profits arising from property, profession, trade or business. b. Is always based on gross amount. c. Is always an indirect tax. d. Is a regressive tax. 4. It is the proportional contribution by persons and property levied by the lawmaking body of the State by virtue of its sovereignty for the support of the government and all public needs. a. License fees b. Special assessments c. Taxes d. All of the above 5. The following are sources of tax laws. Which is not a source? a. Supreme Court decisions b. Barangay resolutions c. Treaties or international agreements d. Revenue Regulations by the Department of Finance 6. Real property taxes should not disregard increases in the value of real property occurring over a long period of time. To do otherwise would violate the canon of a sound tax system referred to as a. Theoretical justice b. Fiscal adequacy

c. Administrative feasibility d. Symbiotic relationship 7. One of the characteristic of a tax is that a. It is generally assignable.

b. It is generally based on contract. c. It is generally payable in money. d. None of the above. 8. Statement I: The taxable income from both compensation and business shall be combined if the taxpayer is subject to the graduated income tax rates.

Statement II:

The holiday pay of a minimum wage earner is subject to income tax. a. True; True b. False; False c. True; False d. False; True 9. When a purely practicing professional’s gross sales/receipts exceeded the VAT threshold during the taxable year, I: he shall automatically be subject to the graduated rates under Section 24(A).

II: he

shall be allowed a tax credit for the previous quarter/s’ income tax payment/s under the 8% income tax rate option.

III: He shall be

allowed to avail of the 8% income tax rate. a. I and II b. I and III c. I, II and III d. Neither I, II and III 10. In 2018, Mr. Luther Vandross, Senior Executive of Kayang-kaya Mo Yan Corporation, is both an employee and businessman. His records show the following income and expenses relative to his employment and poultry farm business: Annual Compensation Income, including 13th Month Pay and other benefits of Php 215,000.00, but net of mandatory contributions to SSS, Philhealth and HDMF Gross Sales - Poultry Farm Non-operating Income Cost of Sales Operating Expenses

2,500,000.00 3,150,000.00 300,000.00 899,000.00 640,000.00

How much is the income tax due for 2018? a. 4,140,000.00 b. 4,320,000.00 c. 4,321,000.00 d. 4,141,000.00 11. Passive income includes income derived from an activity in which the earner does not have any substantial participation. This type of income is a. Usually subject to income tax. b. Taxable only if earned by a citizen. c. Included in the income tax return. d. Subject to a final tax.

12. Classify the individual taxpayer: I. Annette, a citizen, stayed in Japan for more than 180 days.

II.

Cindy, a Filipino singer, visited Korea for three days to sing for her cousin’s wedding.

a. I – Resident citizen; II – Non-Resident citizen b. I – Non-Resident citizen; II –Resident citizen c. Both are resident citizens d. Both are non-resident citizens 13. Which of the following is not an income tax on corporations? a. Minimum corporate income tax b. Gross income tax c. Stock transaction tax d. Normal tax 14. Corporation does not include a. Joint accounts b. General professional partnerships c. Insurance companies d. Joint stock companies 15. Which of the following non-resident foreign corporation is imposed the highest income tax rate? a. Cinematographic film owner, lessor or distributor b. Owner or lessor of vessels chartered by Philippine nationals c. Owner or lessor of aircraft, machinery and other equipment d. Same for all 16. SMPG Corporation just completed its third year of operations. It has the following financial information for the taxable year 2015, its third year:

Gross Income Deductions

Philippines 1,460,200.00 799,000.00

England 1,150,000.00 600,000.00

Assuming that the taxpayer is a domestic corporation, what is the taxable income? a. 565,000.00 b. 1,645,000.00 c. 1,211,200.00 d. 1,281,000.00 17. In item 20, what is the income tax due? a. 169,500 b. 493,500 c. 363,360 d. 363,900 18. In item 20, Assuming the taxpayer is a resident foreign corporation, what is the taxable

income? a. 305,000

b. 1,245,000 c. 661,200 d. 1,353,000

19. In item 22, how much is the income tax due? a. 91,500 b. 373,500 c. 198,360 d. 371,000 20. Assuming the taxpayer is a non-resident foreign corporation, what is the taxable income? a. 1,250,000 b. 2,250,000 c. 1,460,200 d. 1,150,000 21. How much is the tax due in item 24? a. 675,000 b. 375,000 c. 438,060 d. 563,000 22. Which statement is correct? The gross income tax of corporation is a. 15% of gross sales b. 15% of gross income c. 15% of net sales d. All of the above 23. Which of the following statements about IAET is false? a. It is in the nature of a penalty to the corporation for improperly accumulating earnings. b. It aims to deter the avoidance of tax on the part of shareholders on earnings received. c. If undistributed earnings are used for the reasonable needs of the business, generally, such earnings is not subject to IAET. d. IAET shall not be imposed despite determination that a corporation has accumulated beyond the reasonable needs of business. 24. The tax rate on improperly accumulated earnings a. 2% b. 10% c. 15% d. 30% 25. For taxable year 2014, the company's sixth year of operations, the records of Di Ako Susuko Corporation, a domestic corporation, show the following: Gross sales Sales returns & allowances Sales discounts Cost of goods manufactured & sold Operating expenses How much is the net sales? a. 2,463,500 b. 2,436,000 c. 2,958,100 d. 2,629,800

2,700,800.00 50,000.00 21,000.00 1,313,600.00 486,040.00

26. In item 35, how much is the gross income? a. 1,079,500 b. 1,644,500...