TAXATION - PART 1 AND PART 2 QUIZZES IN TAX PDF

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Question 11 / 1 ptsStatement 1: Confirmation number is the control number issued by authorized agent bank (AAB) to the taxpayer and BIR to acknowledge that the taxpayer's account has been successfully debited electronically in payment of his tax liability. This shall serve as evidence of the fact of...

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Question 1 1 / 1 pts Statement 1: Confirmation number is the control number issued by authorized agent bank (AAB) to the taxpayer and BIR to acknowledge that the taxpayer's account has been successfully debited electronically in payment of his tax liability. This shall serve as evidence of the fact of payment of the taxpayer's liability to the extent of the amount reflected in the Confirmation Number, and the date of payment by the taxpayer Statement 2: Page number is the control number issued by the AAB to the BIR to confirm that tax payment has been credited to the account of the government or recognized as revenue (internal revenue tax collection) by the Bureau of Treasury True; True Correct! True; False

False; True

False; False

Question 2 0 / 1 pts Statement 1: The basis is the reciprocal duties of protection and support between the State and its inhabitants. The State collects taxes from the subjects of taxation in order that it may be able to perform the functions of government.

Statement 2: The citizens on the other hand, pays taxes in order that they may be secured in the enjoyment of the benefits of organized society (benefits received theory).

Statement 3: Taxes are the lifeblood of the Government and their prompt and certain availability are imperious (expecting obedience) need. You Answered True; True; True

False; True; True Correct Answer True; True; False

False; False; True

Question 3 1 / 1 pts The principal purpose of taxation is to raise revenue for governmental needs (revenue purpose), which of the following secondary purposes of taxation is not a compensatory purpose To reduce excessive inequalities of wealth Correct! To implement the police power of the State to promote the general welfare

To maintain high level of employment

To control inflation

Question 4 1 / 1 pts Which is not a manifestation of the lifeblood theory? Correct! Fixing the amount or rate of the tax

No injunction to enjoin (or stop) tax collection

Imposition of tax even in the absence of Constitution grant

Right to select objects of taxation

Question 5 0 / 1 pts A purely self-employed individual’s gross sales/receipts and other non-operating income do not exceed the VAT threshold.

If he signified his intention to avail of the 8% income tax rate on his first quarter return, he will pay: You Answered Income tax on gross sales/receipts excluding non-operating income in excess of P250,000 in lieu of graduated tax rates and percentage under Section 116

Income tax on gross sales/ receipts and other non-operating income in excess of P250,000 and the percentage tax under Section 116

Percentage tax under Section 116 only in lieu of income tax Correct Answer Income tax on gross sales/receipts and other non-operating income in excess of P250,000 in lieu of graduated tax rates and percentage under Section 116

Question 6 1 / 1 pts Under the TRAIN law, the books of accounts shall be audited and examined yearly by independent CPA and their income tax returns accompanied with a duly accomplished Account Information Form which shall contain, among others, information lifted from certified balance sheets, profit and loss statements, schedules listing income producing properties and the corresponding income therefrom and other relevant statements

The number of pages of Corporate Income Tax Return shall be Six Correct!

Four

Eight

Two

Question 7 1 / 1 pts Statement 1: Improperly Accumulated Earnings Tax Return – BIR Form 1704

Statement 2: Capital Gains Tax Return for Onerous Transfer of Real Property Classified as Capital Asset (both Taxable and Exempt) – BIR Form 1706

Statement 3: Capital Gains Tax Return for Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange- BIR Form 1707-A False; True; True

False; False; True

True; True; True Correct! True; True; False

Question 8 1 / 1 pts Statement 1: The power of taxation is comprehensive, plenary, unlimited and supreme. This power is, however, subject to inherent and constitutional limitations.

Statement 2: It is subject to Constitutional and inherent limitations, hence, it is not an absolute power than can be exercised by the legislature anyway it pleases.

True; False

False; False

False; True Correct! True; True

Question 9 0 / 1 pts Statement 1: QAP files, or also known as Quarterly Alphabetical List of Payees is a file which contains all the names of payees included both in your 1601-EQ/1601-FQ report

Statement 2: List of the content of Certificates of Taxes Withheld at Source (Form 2307) like income received; period when income earned, amount of tax withheld. All 2307 shall be attached to SAWT. Correct Answer True; True

False; False You Answered True; False

False; True

Question 10 1 / 1 pts Statement 1: The Final Withholding Tax at Source or simply called Expanded Withholding Tax is a tax imposed and prescribed on the items of income payable to natural or juridical persons, residing in the Philippines, by a payor-corporation/person

which shall be credited against the income tax liability of the taxpayer for the taxable year.

Statement 2: The Withholding of Creditable Tax is the amount of income tax withheld by the withholding agent is constituted as a full and final payment of income tax due from the payee of the said income. Correct! False; False

True; True

True; False

False; True

Question 11 3 / 3 pts ABC Corporation is organized and operating under the Philippine law. The following data were taken from the financial statements of ABC Corporation for the current taxable year (2020): Philippines Gross sales

Abroad

P10,000,000

P5,000,000

200,000

-

Cost of goods sold

3,500,000

2,250,000

Operating expenses

2,800,000

1,100,000

Interest income from trade receivable

100,000

50,000

Interest income from BPI deposits – Phils.

100,000

-

Sales returns

Interest income from BPI deposit – USA

-

80,000

Interest income –FCDU

150,000

-

Income from money market placement

200,000

100,000

Dividend income from domestic corporation

75,000

-

Dividend income from resident corporation

45,000

-

-

30,000

50,000

25,000

Gain on sale of shares of stock of domestic corporation held as capital asset thru local stock exchange; Selling price- P500,000 (Note: shares of stock at par value)

120,000

-

Gain on sale of shares of stock of domestic corporation, held as capital asset directly to a buyer; Selling price- P650,000 (Note: shares of stock at par value)

150,000

-

5,000,000

-

Dividend income from non-resident corporation Royalty income

Gain on sale of real property in the Philippines not used in business. Cost P4,000,000; FMV P8,000,000.

How much is the documentary stamp tax on shares of stock thru local stock exchange? Correct! Exempt

P900

P3,750

P2,850

Question 12 0 / 3 pts ABC Corporation is organized and operating under the Philippine law. The following data were taken from the financial statements of ABC Corporation for the current taxable year (2020): Philippines Gross sales

Abroad

P10,000,000

P5,000,000

200,000

-

Cost of goods sold

3,500,000

2,250,000

Operating expenses

2,800,000

1,100,000

Interest income from trade receivable

100,000

50,000

Interest income from BPI deposits – Phils.

100,000

-

-

80,000

Interest income –FCDU

150,000

-

Income from money market placement

200,000

100,000

Dividend income from domestic corporation

75,000

-

Dividend income from resident corporation

45,000

-

-

30,000

50,000

25,000

Sales returns

Interest income from BPI deposit – USA

Dividend income from non-resident corporation Royalty income

Gain on sale of shares of stock of domestic corporation held as capital asset thru local stock exchange; Selling price- P500,000 (Note: shares of stock at par value)

120,000

-

Gain on sale of shares of stock of domestic corporation, held as capital asset directly to a buyer; Selling price- P650,000 (Note: shares of stock at par value)

150,000

-

5,000,000

-

Gain on sale of real property in the Philippines not used in business. Cost P4,000,000; FMV P8,000,000.

How much is the documentary stamp tax on shares of stock directly to a buyer? Correct Answer P3,750

Exempt You Answered P1,125

P4,875

Question 13 3 / 3 pts ABC Corporation is organized and operating under the Philippine law. The following data were taken from the financial statements of ABC Corporation for the current taxable year (2020): Philippines Gross sales Sales returns

Abroad

P10,000,000

P5,000,000

200,000

-

Cost of goods sold

3,500,000

2,250,000

Operating expenses

2,800,000

1,100,000

Interest income from trade receivable

100,000

50,000

Interest income from BPI deposits – Phils.

100,000

-

-

80,000

Interest income –FCDU

150,000

-

Income from money market placement

200,000

100,000

Dividend income from domestic corporation

75,000

-

Dividend income from resident corporation

45,000

-

-

30,000

50,000

25,000

Gain on sale of shares of stock of domestic corporation held as capital asset thru local stock exchange; Selling price- P500,000 (Note: shares of stock at par value)

120,000

-

Gain on sale of shares of stock of domestic corporation, held as capital asset directly to a buyer; Selling price- P650,000 (Note: shares of stock at par value)

150,000

-

5,000,000

-

Interest income from BPI deposit – USA

Dividend income from non-resident corporation Royalty income

Gain on sale of real property in the Philippines not used in business. Cost P4,000,000; FMV P8,000,000.

How much is the total capital gains tax due? P563,500

P643,500 Correct! P562,500

P642,500

Question 14 3 / 3 pts A domestic corporation provided the following data for 2020: Gross profit from sales Business expenses

P3,000,000 1,800,000

Dividend income from domestic corporation

100,000

Dividend income from a resident corporation

50,000

Dividend income from a non-resident corporation

40,000

Capital gain on sale of land in the Philippines (SP-P2M; FMV-P1.8M, CostP1.5M)

500,000

Capital gain on sale of land in China (SP – P1.5M; FMV – P1.8M, Cost – P1.3M)

200,000

Capital gain on shares of domestic corporation (direct sale to buyer) @par value P100,000

120,000

Gain on sale of shares of a domestic corporation thru a local stock exchange (SP-P200,000; Cost P150,000) @par value P150,000 Interest income from

50,000

•

Notes receivable

•

Bank deposits (peso accounts)

•

Bank deposits (foreign currencies)

•

Treasury bills

20,000 30,000 25,000 10,000

For the year 20x9, a domestic corporation declared and paid dividends to its shareholders as follows: To A, a resident citizen

P100,000

To B, a non-resident citizen

100,000

To C, a resident alien

100,000

To D, a non-resident alien engaged in trade in the Philippines

100,000

To E, a non-resident alien not engaged in trade in the Philippines

100,000

To F, a domestic corporation

100,000

To G, a resident foreign corporation

100,000

To H, a non-resident foreign corporation (without tax sparing)

100,000

The total capital gains taxes for the year 2020 is P121,750

Correct! P138,000

P127,000

P37,000

Question 15 3 / 3 pts A domestic corporation provided the following data for 2020: Gross profit from sales Business expenses

P3,000,000 1,800,000

Dividend income from domestic corporation

100,000

Dividend income from a resident corporation

50,000

Dividend income from a non-resident corporation

40,000

Capital gain on sale of land in the Philippines (SP-P2M; FMV-P1.8M, CostP1.5M)

500,000

Capital gain on sale of land in China (SP – P1.5M; FMV – P1.8M, Cost – P1.3M)

200,000

Capital gain on shares of domestic corporation (direct sale to buyer) @par value P100,000

120,000

Gain on sale of shares of a domestic corporation thru a local stock exchange (SP-P200,000; Cost P150,000) @par value P150,000 Interest income from

50,000

•

Notes receivable

•

Bank deposits (peso accounts)

•

Bank deposits (foreign currencies)

•

Treasury bills

20,000 30,000 25,000 10,000

For the year 20x9, a domestic corporation declared and paid dividends to its shareholders as follows: To A, a resident citizen

P100,000

To B, a non-resident citizen

100,000

To C, a resident alien

100,000

To D, a non-resident alien engaged in trade in the Philippines

100,000

To E, a non-resident alien not engaged in trade in the Philippines

100,000

To F, a domestic corporation

100,000

To G, a resident foreign corporation

100,000

To H, a non-resident foreign corporation (without tax sparing)

100,000

The income tax due for the year 2020 is P423,000

P426,000 Correct! P453,000

P366,000

Question 16 3 / 3 pts Mr. X has the following data on his passive income earned during 2019: Philippines Interest income from long term peso bank deposits

Abroad

P45,000

P25,000

Interest income from long term FCDU deposits

50,000

60,000

Royalties from books

20,000

30,000

Royalties from computer programs

20,000

40,000

Winnings from an electronic raffle during Smart Communication’s 50th anniversary (chosen randomly by the network using smart subscribers sim card numbers)

10,000

-

Dividend income from a domestic corporation

27,000

13,000

Dividend income from a foreign corporation

33,000

22,000

How much is the final withholding tax if the taxpayer is a non-resident alien engaged in trade or business? P13,450

P9,700

P13,750 Correct! P13,400

Question 17 3 / 3 pts Mr. X has the following data on his passive income earned during 2019: Philippines Interest income from long term peso bank deposits

Abroad

P45,000

P25,000

Interest income from long term FCDU deposits

50,000

60,000

Royalties from books

20,000

30,000

Royalties from computer programs

20,000

40,000

Winnings from an electronic raffle during Smart Communication’s 50th anniversary (chosen randomly by the network using smart subscribers sim card numbers)

10,000

-

Dividend income from a domestic corporation

27,000

13,000

Dividend income from a foreign corporation

33,000

22,000

How much is the final withholding tax if the taxpayer is a non-resident citizen? P8,700

P9,700

P13,450 Correct! P10,700

Question 18 3 / 3 pts Mr. Y has the following information in 2020: Gross profit from sale of inventories held for 2 years P500,000; Loss on two (2) weeks option contract P50,000; Gain on sale of bonds (holding period 6 months) P60,000; Gain on sale of delivery truck held for 3.5 years P400,000; Gain on sale of personal car held for 5 years, P160,000; Capital gain on sale through PSE of shares of stocks held for 4 years P40,000; Sale of 2-year old residential house (Cost P540,000) P5,500,000.

In 2019, Mr. Y had a net taxable income of P50,000 and a capital loss of P75,000.

How much is the total capital gain tax? Correct! P330,000

P336,000

P166,000

P2,000

Question 19 3 / 3 pts On January 1, 2017, Caloy leased his land to Leo. The terms of the contract of lease is for fifteen (15) years and the rental fee is P360,000 a year. The contract provides that Leo will construct a building and at the end of the term of the contract, the ownership of the building will be transferred to Caloy. The building, with a useful life of 30 years, was completed on January 1, 2018 at a cost of P6,000,000.

Assume Caloy opted to use the lump-sum method of recognizing income from leasehold improvement, his taxable income in 2018 should be Correct! P6,360,000

P560,000

P760,000

P360,000

Question 20 3 / 3 pts The record of a closely-held domestic corporation show the following data for 2018: Gross income Business expenses Gain on sale of business asset Interest on deposits with Metrobank, net of tax

P1,500,000 600,000 60,000 5,000

Sale of shares of stocks, not listed and traded: Selling price

150,000

Cost

115,000

Dividends from Victory Corporation, domestic Dividends paid during the year

35,000 120,000

Reserved for building acquisition

300,000

In 2017, the corporation suffered an operating loss of P130,000. This amount was carried forward and claimed as deduction from gross income 2018.

The income tax due in 2018 is P288,000

P273,937 Correct! P249,000

P234,375

Question 21 3 / 3 pts In 2...