I.

MULTIPLE CHOICE TEST (100x1)

1. It is the governments duty to give taxpayers general advantages and protection in
exchange for the contributions that they have made. Which principle of taxation is described
in this situation?
a. Beneft received principle
b. heoretical !ustice
c."iscal ade#uacy
d. $ife blood theory
%. Which of these is a fee imposed on the right to exercise a professional practice or privilege?
a. oll b. ax c. $icense d. ari&
'. his type of administrative tax remedy is used (hen the government sei)es the personal
property of a delin#uent taxpayer to enforce payment of taxes.
a. $evy b. *istraint c. ax lien d. "orfeiture
+. In this type of administrative tax remedy, the taxpayers property is transferred to another
(ithout compensation or consent of the (rongdoer.
a. $evy b. *istraint c. ax lien d. "orfeiture
-. In a compromise, t(o parties agree to avoid litigation by reciprocal concessions. .ne party
may demand compliance of the other party, (ho (ould then alter their demand to
accommodate the compromise.
a. /tatement 1 and statement % are both correct.
b. /tatement 1 is correct (hile statement % is incorrect.
c. /tatement 1 is incorrect (hile statement % is correct.
d. /tatement 1 and statement % are both incorrect.
0. Which type of a situation allo(s compromise as a tax remedy?
a. 1riminal cases fled in a court
b. he taxpayers fnancial position demonstrates an inability to pay tax
c. axpayer commits tax fraud
d. here is no reasonable doubt as to the validity of the claim against the taxpayer
2. Which of these is 3. a re#uirement for (ithholding tax?
a. here must be an employer4employee relationship
b. here must be (age payment for the services rendered
c. here must be a payroll period
d. Withholding exemption of the employee must be un5no(n
6. his type of (ithholding income is applicable for the compensation and passive incomes.
a. "inal tax
b. *eductible tax
c. 1reditable tax
d. "iscal tax
7. In (ithholding tax, the employer must actually direct the (or5 that the employee does.
Withholding tax is applicable only for the full4time employees.
a. 1riminal cases fled in a court
b. he taxpayers fnancial position demonstrates an inability to pay tax
c.axpayer commits tax fraud
d. here is no reasonable doubt as to the validity of the claim against the taxpayer
18. Which of the follo(ing best describes capital gains?
a. It is the sale or exchange of shares of stoc5
b. It is the interest on savings and time deposits.
c. It is the income gained from a service rendered
d. It is the amount received as (innings.
11. What is the main reason for setting up tax treaties?
a. o enforce tax evasion
b. o obtain business profts
c. o promote international trade
d. o discourage domestic la(s.
1%. Which of the follo(ing is a tax exclusion obtained from the proceeds paid to benefciaries
upon the death of an individual?
a. 9etirement beneft
b. :ri)es and a(ards
c. ax treaties
d. $ife insurance
1'. Which of these is 3. and allo(able deduction t the estate of a citi)en or resident?
a. ;xpenses from business
b. <edical expenses less that : -88.88 incurred in a year prior to the death of the
decedent
c. axes
d. /tandard e#uivalent to :1<
1+. = person is insolvent (hen his properties are not enough to pay his obligators. hese claims
(ill be paid out of the executors property.
a. /tatement 1 and statement % are both correct.
b. /tatement 1 is correct (hile statement % is incorrect.
c. /tatement 1 is incorrect (hile statement % is correct.
d. /tatement 1 and statement % are both incorrect.
1-. Which of these is 3. re#uired for casualty losses to be deducible?
a. here must be a loss arising from fre, storms, or robbery
b. he loss must not be compensated by insurance
c. he loss has incurred not later than the last day for the payment of the estate tax
d. he loss has been claimed as a deduction for income tax purposes
10. Which statement (ould best describe the vanishing deduction?
a. It is a deduction for taxes previously claimed.
b. It is a penalty due for a tax fraud
c. It is an exclusion for indebtedness
d. It is a deduction for property previously taxed.
12. Which type of ordinary customs duty is applicable for items that are charged based only on
some standard of measurement?
a. /pecifc
b. =d valorem
c. =lternative
d. 1ompound
16. Imported vehicles are charged (ith -> of their mar5et value price, plus :-88 per metric ton.
Which type of ordinary customs duty is to be paid n this example.
a. /pecifc
b. =d valorem
c. =lternative
d. 1ompound
17. he :hilippine charges taxes on products delivered from 1hina in large #uantities (ith
abnormally lo( prices. What type of special custom duty does 1hina pay?
a. 1ountervailing duty
b. =nti4dumping duty
c. <ar5ing duty
d. *iscriminatory duty
%8. he ma5e4up company $.real failed to properly list all the chemicals in the delivery of
cosmetic products to the :hilippines. Which type of customs duty must $.real pay?
a. 1ountervailing duty
b. =nti4dumping duty
c. <ar5ing duty
d. *iscriminatory duty
%1. Which of these is 3. a characteristic of ?alue =dded ax?
a. It is a uniform tax imposed on every
sale
b. It is a form of sales tax
c. It is an e#ual amount imposed on frms
d. It is an indirect tax.
%%. Which of these business activities may be included under the optional registration?
a. /ale of agricultural food products
b. :ublication of boo5s
c. $ease of properties
d. /ales under international agreements
%'. Which of these statements best describes a ?=4exempt sale?
a. he sale of goods and services (hich are not sub!ect to output tax
b. he sale of goods and services (hich are not sub!ect to input tax
c. he sale of agricultural goods and services
d. he sale of domestic goods and services
%+. If a person sells items that are ?=4exempt, he is re#uired to pay ?= to the BI9. he seller of
the ?=4exempt items may pass on the burden of the tax to the buyers.
a. /tatement 1 and statement % are both correct.
b. /tatement 1 is correct (hile statement % is incorrect.
c. /tatement 1 is incorrect (hile statement % is correct.
d. /tatement 1 and statement % are both incorrect.
%-. Which of these is 3. a violation of ?= la(s?
a. "ailure to issue receipts
b. "ailure to fle ?= returns
c. "ailure to pass ?= to buyers
d. "ailure to register under ?=
%0. What do value added taxes and percentage taxes have in common?
a. Both are taxes for individuals
b. Both must be registered (ith bureau of customs
c. Both are based on annual receipts less than : 1,-88,888
d. Both are business taxes.
%2. :ercentage taxes cannot be passed on to the buyers. @o(ever, it is possible for the business
to pass on value added tax to buyers.
a. /tatement 1 and statement % are both correct
b. /tatement 1 is correct (hile statement % is incorrect.
c. /tatement 1 is incorrect (hile statement % is correct
d. /tatement 1 and statement % are both incorrect
%6. Which of these is 3. an excisable product?
a. =utomobil
es
b. obacco
products
c.Imported goods d. =lcohol
products
%7. his classifcation of excise tax can capture increases in the volume of production.
a. /pecifc
tax
b. =d
valorem tax
c.=lternative tax d. 1ompoun
ded tax
'8. In this classifcation of excise tax, only a shit in a products price can a&ect the excise tax
imposed.
a. /pecifc
tax
b. =d
valorem tax
c.=lternative tax d. 1ompoun
ded tax
'1. Which of these items have compounded excise taxes?
a. 1igars b. <ineral
products
c.Wines
d. Ae(elry
'%. Which classifcation of excise tax is used for yachts and other vessels intended for pleasure
or sports?
a. /pecifc tax
b. =d valorem tax
c.=lternative tax d. 1ompounded
tax
''. Which is the main purpose of documentary stamp tax?
a. o allo( parties to form a contract
b. o nullify an existing contract
c.o validate the authenticity of a document
d. o record transaction
'+. he community tax is a form of residence tax used for documentation purposes. he
community tax is also applicable to documents that are going to be used as evidence in
court.
a. /tatement 1 and statement % are both correct
b. /tatement 1 is correct (hile statement % is incorrect
c. /tatement 1 is incorrect (hile statement % is correct.
d. /tatement 1 and statement % are both incorrect.
'-. Which of these is 3. an example of a situation (here community tax must be presented?
a. =n individual liable to tax ac5no(ledges any document before a notary public
b. =nd individual receives a license
c. =n individual ta5es an oath of oBce in government service
d. =n individual sells real property
II. Problem Solving. Show yor !ol"ion!
1. <s. ;lsa *elgado is a resident citi)en of the :hilippines, single, (ith no legal dependents.
/he earned an annual income of : %+-,888 for the year %81+. /he also the sole o(ner of a
business that earned a depreciation expense of : '8,888. What is her income after tax?
%. <r. Brad *icarpio is a resident alien, married (ith t(o dependent 5ids. @e and his (ife
agreed that any income tax deductions (ould be subtracted to his o(n income. What is his
income after tax?
"or the year %81', he earnedC
Income =mount
Income from business :%2-,888
1ompensation for in!uries : 18,888
9etirement and benefts : 18,888
Business expenses : '-,888
"ree legal services : %-,888
3. /tar5 manufacturing is a foreign resident corporation that speciali)es in innovative
technologies. What is the income after tax?
"or the year %81', it earnedC
Income =mount
Income from business :1,1%8,888
Business expenses : %88,888
9esearch and development expense : 08,888
$osses : 1-,888
Bad debts : %-,888
+. <r. 1lar5 Dent, a resident citi)en of the :hilippines passed a(ay and left his estate to his
heirs. =fter valuation, it amounted toC
"or the year %81', it earnedC
Income =mount
Eross estate :+,-88,888
War damage payments : -88,888
ransfers to :hilippine government : -88,888
"air mar5et value of family home : 2-8,888
@o( much is the value of the estate after taxes?
-. Bara5o co&ee shop is a :hilippine corporation that has several locations (ithin <etro <anila.
"or the year %81', their sales and purchases amounted toC
"or the year %81', it earnedC
Income =mount
Eross sales :+,-88,888
:urchases of ra( materials : -88,888
9ent expense to ?=4registered businesses : -88,888
/alaries expense : 2-8,888
@o( much is the ?= payable?
III. E!!#y
1. ;xplain the method of payment for the excise taxes. F-418 sentencesG
I. MULTIPLE CHOICE (1 $oin" e#%h& # "o"#l o' (0 $oin"!)
1. =
%. 1
'. B
+. *
-. B
0. B
2. *
6. =
7. *
18. =
11. 1
1%. *
1'. =
1+. B
1-. 1
10. *
12. =
16. B
17. B
%8. 1
%1. 1
%%. =
%'. =
%+. *
%-. 1
%0. *
%2. 1
%6. 1
%7. =
'8. B
'1. =
'%. B
''. 1
'+. B
'-. *
II. Problem Solving (() $oin"!)
1. Eross income : %+-,888
$essC allo(able deductionsF itemi)ed or optionalG : '8,888
3et income :%1-, 888
$essC personal and additional exemptions : -8,888
3et taxable income : 10-,888
ax rate : %%,-88 HF %-> of excess over
1+8,888 I : 0, %-8G : %6,2-8
Income after tax : 1'0,%-8
%. Eross income : %2-, 888
$essC allo(able deductions : 28,888
3et income : %8-,888
$essC personal and additional exemptions : 188,888
3et taxable income : 18-, 888
ax rateC : 6,-88 H F%8> in excess of : 28,888G : 1-, -88
Income after tax : 67, -88
'. Income tax for corporation
Eross income : 1,1%8,888
$essC itemi)ed deductions or 18> standard deduction : '88,888
axable income : 6%8,888
<ultiplied byC tax rate F'8>G : %+0,888
Income after tax : -+2,888
+. Item
Eross estate : +, -88, 888
$essC allo(able deductions : 1, %-8, 888
3et estate : ', %-8, 888
$essC exemptions nJa
axable 3et ;state : ', %-8, 888
<ultiplied byC ax 9ate F11> of excess over :%<G : 1'2, -88
;state ax :ayable : %2%, -88
;state after tax F gross estate less estate tax payableG : +, %%2, -88
-. Eross sales : %, 8-8, 888
<ultiplied byC 1%> 8.1%
.utput tax : %+0, 888
:urchase of EoodsJ :ropertiesJ services : -68, 888
<ultiplied byC 1%> .1%
Input tax : 07, 088
.utput tax : %+0, 888
$essC input tax 07, 088
?= :ayable : 120, +88
II. E!!#y () $oin"!)
;xplain the method of payment for excise taxes.
he excise tax on domestic goods shall be paid by the manufacturer or produce before the
products are removed from the place of production. "or imported products, the excise tax
shall be paid by the o(ner, lessee, concessionaire or operator of the frm.
;very person liable to pay excise tax shall fle a separate return for each place of production.
he excise tax return shall include a description and #uantity of the goods to be removed,
the applicable tax base and the tax amount due.
he excise tax return is a document fled by the taxpayer that includes the taxpayers
information and payment details. he excise tax return and its payment may b submitted to
any authori)ed agent ban5 F==BG of the place (here the taxpayer is registered. In places
(here there are no ==Bs, the excise tax return and its payment (ill be submitted directly to
the 9evenue 1ollection .Bcer, or duly authori)ed 1ity or <unicipal reasurer in the o(ners
principal place of business.
he business o(ner may also choose to pay through the electronic fling and payment
system Fe":/G