taxation general principles quiz PDF

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1 taxes, the government will be paralyzed for lack of motive.This theory is referred to as:(1/1 Points)Symbiotic Relationship Benefits Received Necessity Lifeblood2 exemption bills are approved by(1/1 Points)Majority of the representatives constituting a quorum 2/3 of all the members of the congress...

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1.Without taxes, the government will be paralyzed for lack of motive. This theory is referred to as: (1/1 Points) Symbiotic Relationship Benefits Received Necessity Lifeblood

2.Tax exemption bills are approved by (1/1 Points) Majority of the representatives constituting a quorum 2/3 of all the members of the congress 2/3 of all the representatives constituting a quorum Majority of all the members of the congress

3.Which of the following is generally not a taxable entity or least likely to be a taxable entity. (1/1 Points) Partnership Joint Venture Foreign Corporation Co-ownership

4.The point at which tax is levied is also called (0/1 Points) Incidence of Taxation Collection of Taxes Impact of Taxation Situs of Taxation

5.Where does taxing power of the provinces, municipalities and cities precede from? (0/1 Points) Legislative enactment Constitutional grant Presidential or Executive act Local legislation

6.Which of the following is superior among the sources tax laws? (1/1 Points)

Republic Acts Executive Orders BIR Rulings Supreme Court Decisions

7.In case of conflict between the Tax Code and the Philippine Accounting Standards (PAS) or the Philippone Financial Reporting Standards (PFRS): (1/1 Points) PAS/PFRS shall prevail over the Tax Code. Tax Code shall prevail over PAS/PFRS. PAS/PFRS and Tax Code shall be both disregarded. The taxpayer may choose between PAS/PFRS or Tax Code.

8.First statement: Tax exemptions are strictly construed against the government. Second statement: When the tax law is not clear and there is doubt whether a taxpayer is taxable or not, the doubt shall be settled against the government. (0/1 Points) Only the first statement is correct Only the second statement is correct Both statements are correct Both statements are incorrect

9.The distinction of tax from permit or license is that tax is: (0/1 Points) Imposed for regulation. One which involves an exercise of police power. One in which there is generally no limit on the amount that may be imposed. Imposed through the provisions of the Constitution.

10.Which of the powers of the State is the most superior? Which is regarded as most important? (1/1 Points) Taxation, Taxation Police Power, Police Power Taxation, Police Power Police Power, Taxation

11.Which of the following is not a legislative act?

(0/1 Points) Determination of the subject of the tax Assessment of the tax Setting the amount of tax Determining the purpose of the tax

12.Congress passed a law subjecting government owned and controlled corporations (GOCCs) to income tax. Is the law valid? (0/1 Points) Yes, because all government agencies and instrumentalities are subject to tax Yes, because GOCCs are not government agencies and are essentially commercial in nature. No, because government agencies are exempt. This would pose a violation of the equality clause in the constitution No, because GOCCs are constitutionally exempted from paying taxes.

13.Stellar Corporation sold its old factory facility with carrying amount (tax base) of P600, 000 for P1,000,000. A downpayment of 15% was collected on July 1, 2019. Additional P150,000 installment payments were received as of December 31, 2019. Compute for the gross profit to be reported for the year 2019. (0/1 Points) 300,000 120,000 60,000 400,000

14.A method of reporting in which income is recognized when earned regardless of when received and expenses are recognized when incurred regardless of when paid. (1/1 Points) Cash Basis Accrual Basis Time period Basis Modified Accounting Basis

15.A company insured the life of its president for P2,000,000. A total of P500,000 premiums was paid by the company before the president died. The total proceeds were collected by the company. How much is the return on capital? (1/1 Points)

P0 P500,000 P1,500,000 P2,000,000

16.Which of the following cases may the taxable income be computed not on the basis of the calendar year? (0/1 Points) If the taxpayer has no accounting period If the taxpayer is an individual taxpayer If the taxpayer does not keep books of accounts If the taxpayer is a corporation

17.Which of the following is correct regarding crop year method? (0/1 Points) Crop year method is an accounting period Crop year method recognizes farming income when the next planting season commenced. Crop year method matches cropping expenses when incurred and harvest income when realized. Crop year method matches cropping expenses with income upon harvest.

18.Which limitation of Taxation does the concept of "Situs of Taxation" applies? (1/1 Points) Public purpose Territoriality International Comity Exemption of the government

19.Which of the following has least applicability or effect to the general taxpayers. (0/1 Points) Revenue Regulations Revenue Memorandum Order Revenue Memorandum Circulars BIR Rulings

20.Which of the following is not a basic principle of a sound tax system?

(0/1 Points) It should be capable of being effectively enforced. It should consider the taxpayer’s ability to pay. It is levied by lawmaking body of the state Taxes should be sufficient to meet government expenditures.

21.All of the following are secondary purposes of taxation, which is not among them? (1/1 Points) To reduce social inequity Protect and protect local industries Discourage activities Raise revenue for the government

22.Timmy leased her land to Pam for 2 years beginning July 1, 2018. Pam would pay a monthly rental of P100,000. She paid rent up to October 2018 and then defaulted for the rest of the year. Under accrual method, how much was the income of Timmy for 2018? (0/1 Points) P200,000 P400,000 P600,000 P100,000

23.In 2019, Kil Zoldyck earned P500,000 as income from his barbershop and received P300,000 as a Christmas gift from her aunt. He had no other receipts during the year. His gross income for 2019 is: (1/1 Points) P800,000 P500,000 P300,000 P0

24.Which of the following would most probably be allowed to use fiscal year in reporting income? (0/1 Points) Mr. A, an accounting instructor in a univeristy Ms. B, an entrepreneur, selling various beauty products Mr. C, a partner in ABC and Co., CPAs (a general professional partnership)

DEF Company engaged in selling computer software.

25.Who among the following is a non-resident alien? (0/1 Points) An alien who comes to the Philippines for a definite purpose which in its nature may be promptly accomplished. An alien who comes to the Philippines for a definite purpose which in its nature would require an extended say. An alien who has acquired residence in the Philippines. An alien who lives in the Philippines with no definite intention as to his stay.

26.Abrazado Inc. has the following receipts during 2019: From service billings to clients P400, 000 Advances from clients 100, 000 Total 500, 000 The P100, 000 advances refer to services which will be rendered next year. Total uncollected billings increased from P100, 000 on December 31, 2018 to P150, 000 on December 31, 2019. Compute for the gross income under the accrual basis. (0/1 Points) 400,000 450,000 500,000 550,000

27.Licensing of businesses and professionals is an exercise of (0/1 Points) Police Power Taxation Power Eminent Domain Double Power

28.Which of the following BIR issuances is signed by the BIR Commissioner and by the Secretary of the Department of Finance? (1/1 Points) BIR Rulings Revenue Memorandum Circulars Revenue Regulations Revenue Memorandum Orders

29.The Japanese government invested P100 Million in a Philippine local bank and earned P10 Million interest. Which is correct? (1/1 Points)

The income is exempt on grounds of territoriality The income is exempt due to international comity The income is subject to tax on the basis of sovereignty The income is subject to tax because the income is earned within the Philippines.

30.Subject to inherent and constitutional limitations, the power of taxation is regarded as supreme, plenary, unlimited and comprehensive (1/1 Points) Scope of Taxation Basis of Taxation Situs of Taxation Theory of Taxation

31.The National Internal Revenue Code is also known as: (1/1 Points) Republic Act 9337 Republic Act 8424 Republic Act 9504 Republic Act 10963

32.I. A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines. II. A non-resident citizen is taxable only on income derived from sources within the Philippines. III. An individual citizen of the Philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income from sources within the Philippines. IV. An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines. (1/1 Points) All the statements are true All the statements are false One of the statements is false Some of the statements are false

33.Which of the following is not among the National Internal Revenue Taxes? (1/1 Points) Excise Tax

Documentary Stamp Tax Real Property Tax Value Added Tax Donor's Tax

34.It is important to know the source of income for income tax purposes, i.e. from within or without the Philippine because: (1/1 Points) The Philippines imposes income tax on income from sources within and without of a non-resident citizen. Some individual taxpayers are citizens while others are aliens. Separate graduated rates are imposed on different types of income. Some taxpayers are taxed on their worldwide income while others are taxable only upon income from sources within the Philippines.

35.Income is considered realized for tax purposes when: (1/1 Points) It is recognized as revenue under accounting standards even if the law does not do so. The taxpayer retires from the business without approval from the BIR. The taxpayer has been paid and has received in cash or near cash the taxable income. The earning process is complete or virtually complete and an exchange has taken place.

36.Which of the following is an inherent limitation of Taxation power? (0/1 Points) The rule on taxation shall be uniform and equitable No law impairing the obligations of contracts shall be enacted Veto Power of the President on tax bills The tax laws cannot apply to the property of foreign governments.

37.When the impact and incidence of taxation are merged into the statutory taxpayer, the tax is known as (1/1 Points) Personal tax Direct Tax Excise Tax Property Tax

38.As to determination of amount of tax, tax is based on a specific unit of measurement such as weight, head, unit, etc. (per unit, per liter, per pound, per ton etc.) (1/1 Points) Ad Valorem Progressive Direct Specific

39.A corporation reporting on a fiscal year ending March 31 shall file its 2017 income tax return not later than (1/1 Points) July 15, 2017 July 15, 2018 July 30, 2017 April 15, 2017

40.Which of the following does not relate to tax? (1/1 Points) Arises from law rather than from contracts Intended to cover cost of regulations Intended for public purpose Does not render business illegal when not paid...