Taxation Reviewer - FOR REVIEW PDF

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TAXATION REVIEWER1. Which of the Following defines the country's tax Policy? a. Philippine Constitution b. National Internal Revenue Law c. Pari Materia Principle d. Tax Transformation 2. Taxation co-exist with the four elements of the state which includes all, except: a. Government b. Property c. S...

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TAXATION REVIEWER 1. Which of the Following defines the country's tax Policy? a. Philippine Constitution b. National Internal Revenue Law c. Pari Materia Principle d. Tax Transformation 2. Taxation co-exist with the four elements of the state which includes all, except: a. Government b. Property c. Sovereignty d. Territory 3. Which of the following statements is not correct? a. The government automatically possesses the power to collect taxes from its inhabitants b. The government can enforce contribution upon its citizen only when the Constitution grants it. c. Taxation power exists inseparably with the state. d. The state has the supreme power to command and enforce contribution from people with its jurisdiction. 4. Which of the following statements is/are correct? i. Taxation is a process. ii. Enactment of Tax Laws is part of the taxation process iii. The Constitution expressly conferred to the power of Taxation to the President of the Philippines. iv. Taxation requires voluntary contribution from inhabitant to support the government. a. i, ii, iii, and iv b. i, ii and iii only c. i and ii only d. i only 5. Which of the following is/are natural qualities of Taxation Power? i. An inherent power ii. Essentially an executive function iii. An absolute Power iv. Territorial in operation a. i and iv only b. ii and iii only c. i and ii only d. i only 6. Which of the following statement is not correct? a. Only the national government exercises the inherent power of taxation. b. The power to tax by the local government units is a delegated power granted by the Constitution and other special laws c. National legislation is exercised by the Congress d. Interpretation of Tax Laws is done by the Legislative branch of the government 7. Which of the following statements is not correct? a. Collections from taxes are public money

b. Appropriation of taxes for the common good of the people is valid c. Construction of private road from the taxes is a valid appropriation d. Allocation of taxes for the benefit of greater portion of population is considered for public purposes 8. All of the following statements are correct except one a. Taxation power is an absolute power b. Taxation power is the strongest of all inherent portion of the government c. Tax laws must not violate Constitutional restrictions. d. Exercise of Taxation power is subject to restrictions 9. One of the following is not among the basic justification for taxation a. Taxation is based on necessity b. Taxation is the lifeblood of the government c. Taxation is the bread and butter of the government d. Taxation is a voluntary contribution for the benefits received. 10. Which of the following could be an object of taxation? i. Person ii. Tangible property iii. Intangible property iv. Rights a. i and ii b. i, ii and iii c. i and iv d. All of the above. 11. These refer to the rules or orders having force of law issued by the executive branch of the government to ensure uniform application of the tax law a. Revenue regulations b. BIR rulings c. Memorandum Orders d. Local Tax ordinances 12. Tax administration is a system involving enforcement of taxes through the use of a. Tax legislation b. Tax legislation and assessment c. Tax imposition and collection d. Tax assessment and collection 13. A government officer considered as a tax enforcer by having the power to ascertain the validity of tax laws subject to the review of the Courts of Justice a. Secretary of Justice b. Secretary of Finance c. BIR Commissioner d. Chief Justice 14. Which of the following is not within the scope of authority of the BIR Commissioner? a. To exercise the levying function of Taxation

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b. To interpret tax laws c. To assess and collect BIR taxes d. To decide cases involving National Internal Revenue Taxes The following instances allow the BIR Commissioner to inquire or examine the bank deposits of taxpayers, except a. To determine the gross estate of a decedent b. When the taxpayer filed an application for compromise of his tax liability c. The taxpayer waives his right in writing the confidentiality of the bank deposits d. When the taxpayer fails the lifestyle check test and shows unexplained wealth The BIR is under the supervision of the a. Department of Budget b. Bureau of Customs c. Department of Finance d. Department of Trade and Industry Which of the following is not an activity involving tax administration? a. Execution of judgment decided by the court in favor of the BIR b. Passage of tax laws and ordinances through the legislature c. Computation of tax due and payable d. Taxpayer's compliance to pay tax obligation Which of the following statements is correct? a. Levying and collection of taxes are legislative function b. Assessment and Collection are administrative functions c. Enacting of tax laws and its interpretation are legislative function d. Levying and impositions are juridical functions Which of the following is correct? a. Fixing of tax rates b. Valuation of Object of tax c. Collection of Taxes d. Assessment of Tax liability It has the executive supervision and control over tax administration a. Bureau of Internal Revenues b. Bureau of Customs c. Department of Finance d. Court of Justice Which of the following is not among the administrative powers of the Bureau of Internal Revenue? a. Compromise tax assessments b. Distraint of personal property of delinquent taxpayer c. Render court decision concerning tax dispute d. Levy of real property of delinquent taxpayer The tax assessment is being asked to be cancelled because there is question as to its validity or legality a. Jeopardy assessment

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b. Disputed assessment c. Illegal assessment d. Deficiency assessment Which of the following is not correct? a. If it is the first employment of the taxpayer, he must be registered with the BIR before employment or within 10 days from date of employment b. If taxpayer is self-employed, he must register his business within 10 days from commencement of his business c. If the taxpayer is both employed and doing business, he must have only one TIN as the employee and as a sole proprietor d. TIN must be indicated in the return, documents or statement filed with the BIR Which of the following must not be included as part of income? a. Personal Consumption b. Accumulated income c. Additional Investments d. Savings Which of the following does not describe income? a. Increase in taxpayer's wealth b. Return of taxpayer's wealth c. Realization or receipt of gain d. Earnings constructively received Total assets minus total liabilities is equal to a. Net Worth b. Owner's Capital c. Shareholder's equity d. All of the above The principal amount of time deposit in the bank (point of view of depositor) is a/an a. Income b. Revenue c. Capital d. Receipt Statement 1: All wealth that flows into the taxpayer's hand other than, mere return of capital is income. Statement 2: All earnings are taxable with income tax a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are incorrect Which of the following items is not included in the determination of taxable income? a. Realized gain b. Realized Loss

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c. Gif d. Income derived from the gif Which of the following is not a criterion of a taxable income? a. There must be gain b. The gain need not to be actually received c. The gain must be included by the law as treaty from taxation d. The law as treaty from taxation must exclude the gain Which of the following is classified as income? a. Damage recovery due to physical injuries b. Return of capital c. Excess of selling price over cost of assets sold d. Gifs received Which of the following is not a characteristic of income? a. Increase in taxpayers wealth b. Return of taxpayers wealth c. Realization or receipt of gain d. Earnings constructively received If a property is received in lieu of cash compensation, the basis of tax is the a. Supposed amount of cash to be received b. Agreed value of the property received c. Fair market value of the property received d. Salvage value of the property received If services are rendered for the cancellation of debt, the basis of tax (point of view of the debtor) is the a. Fair market value of the service rendered b. Amount of obligation omitted c. Fair market value of the debt cancelled d. Supposed amount of cash to be received Which of the following businesses is/are normally reporting income on accrual basis? a. Real property lessor b. Professional partnership c. Trading business d. Brokerage business Which of the following is/are generally subject to final tax? i. Compensation Income ii. Business Income iii. Passive Income iv. Capital Gain a. i, ii, ii and iv b. i and ii only c. iii and iv only d. iii only

37. The amount of 13th month pay and other benefits was increased by a. P82,000 b. P 52,000 c. P30,000 d. P - 0 – 38. These benefits are relatively small value anf they are not considered compensation subject to income tax a. Fringe benefits b. 13th month pay and other benefits of P82,000 c. Minimum wage d. De minimis 39. A stock option that entitles the holder to purchase shares of stock is called a. Equity-settlement option b. Cash-settlement option c. Stock-purchase option d. Debt-equity option 40. Which of the following is taxable with income tax as its gross amount when earned within the Philippines? a. Professional fee b. Compensation income c. Business Income d. Royalty Income 41. Statement 1: Remuneration for casual labor not in the course of an employer's trade pr business is not considered as taxable compensation income Statement 2: Additional Benefits received by the employee for the convenience of the employer are not taxable income of the employee a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are incorrect 42. Which of the following is a taxable compensation income? a. Separation pay due to resignation b. Retirement pay under BIR approved retirement plan c. Separation pay due to disability d. Terminal pay by fact of death 43. Which of the following is a taxable compensation income? a. Professional fee, net of creditable withholding tax b. Separation pay due to closure of the employer's business c. Terminal pay inclusive of P15,000 13th month pay d. Separation pay due to early retirement 44. Statement 1: All vacation leave and sick leave with pay are taxable compensation income Statement 2: All unused vacation leave converted into cash are taxable

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a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are incorrect Which of the following is not taxable compensation income? a. Free housing given to employee b. Social Security System Benefits c. Retirement pay under duly BIR approved benefit plan d. Retrenchment pay Which of the following is not taxable? a. P2,50 for 10 days sick leave actually taken b. P1,250 for 5 days unused vacation leave converted into cash c. P1,000 for unused vacation leave received as part of separation pay due to voluntary resignation d. P500 availed leave Which of the following is a taxable compensation income? a. Cost of living allowance b. De minimis benefits c. Retirement benefit under BIR approved retirement plan d. Retrenchment Pay Which of the following dividends are subject to income tax? a. Received by domestic corporation from another domestic corporation b. Received by a resident corporation from a domestic corporation c. Received by domestic from nonresident foreign corporation d. Received by nonresident foreign corporation from another nonresident foreign corporation Which of the following is not correct? a. Collection from taxes are public money b. Appropriation of taxes for the common good of the people is valid c. Construction of private road from taxes are availed appropriation 50. The power to tax includes the power to destroy because the taxpayer has no option but to pay the tax is imposed to him a. Marshall Dicturm b. Holmes Doctrine c. Pan Matera Principle All of the following are administrative functions of taxation except a. Selection of object of tax b. Equalization of assessment c. Collection of Taxes The following is an incorrect description of taxation a. Legislative and inherent for the existence of the government b. It involves the taking of property by the government c. The amount imposed had no limit`

53. A fundamental rule is that the property of one country may not be taxed by another country. This is known as a. International Law b. International Comity c. Reciprocity 54. Which of the following tax rate between in same direction with the taxable value? a. Proportionate b. Progressive c. Regressive 55. The seized property of a delinquent taxpayer becomes the property of the government. This refers to a. Distraint b. Levy c. Forfeiture...