LONG QUIZ

NAME OF STUDENT: YEAR AND SECTION:

ANSWER THE FOLLOWING:

1. Which of the following is not exercised by the government ?

a. Taxation
b. Police power
c. Eminent domain
d. Exploitation

2. Select the incorrect statement

a. Since there is compensation, eminent domain raises money for the government
b. Once a government is established, taxation is exercisable
c. The most important of the power is taxation
d. Police power is more superior than the non impairment clause of the constitution

3. The following statements reflect the differences among the inherent powers except
a. The property taken under eminent domain and taxation are preserved but that of police power
is destroyed
b. Eminent domain and police power do not require constitutional grant, but taxation being a
formidable power requires constitutional grant
c. Only eminent domain can be exercised by private entities
d. Taxation, police power , and eminent domain are ways in which the government interferes with
private right and property

4. Statement 1 The taxation power can be used to destroy if the law is valid
Statement 2 A tax law which destroys things, business, or enterprises for the purpose of raising
revenues is an invalid tax law

Which is incorrect?
a. Statement 1
b. Statement 2
 c. Both statements
d. Neither statement

5. Select the correct statement

a. The provision on taxation is the Philippine constitution are grants of the
b. The power to tax includes the power to destroy
c. When taxation is used as a tool for general and economic welfare, this is called for fiscal
purposes
d. The sumptuary purpose of taxation is to raise funds for the government

6. Which of the following powers is inherent or co existent with the creation of the government ?
a. Police power
b. Eminent domain
c. Taxation
d. All of these

7. Which of the following is not an inherent limitation of the power to tax?

a. Tax should be levied for public purposes
b. Taxation is limited to its territorial jurisdiction
c. Tax laws shall be uniform and equitable
d. Government agencies and instrumentalities are exempt from tax

8. Select the incorrect statements

a. The power to tax include the power to exempt
b. Exemption is construed against the taxpayer and in favor of the government
c. Tax statutes are construed against the government in case of doubt
d. Taxes should be collected only for public improvement

9. Which of the following is not a constitutional limitation of the power to tax

a. Non impairment of obligation or contracts
b. Due process and equal protection of law
c. Non appropriation for religious purposes
d. Non delegation of the taxing power
10. Which of the powers of the state is the most superior? Which is regarded as the most
important?
a. Taxation , eminent domain
b. Police power, taxation
c. Eminent domain, police power
d. All the powers are equally superior and important

11. Which is true with tax amnesty ?

a. It is unconditional
b. It covers both criminal and civil liability of the taxpayer
c. It applies for past and future non compliance
d. All of these

12. Which of the following may tax exemption come from?

a. Contract
b. Constitution
c. Law
d. All of these

13. Exemption based upon which of the following is repealable ?

a. Contract
b. Constitution
c. Law
d. None of these

14. Select the incorrect statement regarding tax amnesty and condonation
a. In tax amnesty violators are required to pay a portion of the tax assessed
b. When the remaining unpaid portion of the tax is condoned, the taxpayer cannot ask for refund
for the balance already paid
c. Tax amnesty operates as a general pardon and is rarely available
d. Tax condonation operates on the whole balance of the assessed tax, hence the taxpayer can ask
refund for the paid portion of the tax

15. Which of the following is a power of the Commissioner of Internal Revenue ?

a. Assessment and collection of taxes
b. Enforcement of all forfeitures, penalties and fines
c. Interpretation of the provisions of the NIRC
d. Giving effect to and administering the supervisory and police power conferred by the NIRC and
other laws

16. The Commissioner of Internal Revenue can delegate the power to

a. Refund or credit internal revenue tax
b. Recommend rules and regulations to the Secretary of Finance
c. Assign and reassign revenue officer to establishments of exercisable articles
d. Compromise or abate tax liability

17. The BIR is under the supervision of

a. The Bureau of customs
b. The president
c. The department of finance
d. Congress

18. Who is not a large taxpayer?

a. Mining companies
b. Listed companies
c. Banks with 120 M authorized capital
d. None of these

19. In terms of financial measures , which of the following threshold for qualifications as large
taxpayers is incorrect ?
a. Gross receipts exceeding 1Billion
b. Net worth exceeding 300M
c. Gross purchases exceeding 800 million
d. Gross sales exceeding 1.5BILLION
20. As to tax payments measures which of the following threshold for the qualification as large
taxpayers is incorrect ?
a. Annual income tax payments of 1 million
b. Annual value added tax payments of 1 million
c. Quarterly percentage tax payments of 200,000
d. Annual documentary stamp tax of 1 million
21. Which of the following taxpayers is taxable only on income earned from the Philippines ?
a. Resident corporation
b. Domestic corporation
c. Resident citizen
d. All of these

22. All of the following are taxable on income earned from sources within the Philippines except
a. Resident alien
b. Non resident citizen
c. Non resident corporation
d. Domestic corporation

23. Which is taxable on world income ?

a. Resident corporation
b. Non resident citizen
c. Resident citizen
d. Resident alien

24. The place of taxation is

a. Situs rule
b. Situs
c. Territoriality
d. Gross income

25. Which is an incorrect statement regarding situs of income

a. Service income is earned in the domicile of the taxpayer
b. Interest income is earned in the residence of the debtor
c. Royalty is earned where the intangible is employed
d. Rent is earned in the location of the property

26. Which statement is correct regarding situs of income ?

a. The gain on the sale of real property is earned in the location of the property
b. The gain on sale of any property is earned on the place of sale
c. Merchandising income is earned in the residence of the proprietor
d. Manufacturing income is earned in the place of sale
27. Pedro, a non resident citizen, lent money to Juan a resident Chinese , indebtedness was
collateralized by a property located in Japan . The interest income is earned in
a. The Philippines
b. China
c. Japan
d. Japan, china and Philippines

28. Gain on the sale of goods manufactured and sold by the taxpayer within the Philippines is
subject to tax
a. Wherever sold
b. If sold abroad only
c. Without the Philippines only
d. Within the Philippines only

29. Yana, a resident alien bought a car manufactured in the Philippines exported the same at a gain
to Carlos, a non resident citizen . Which is correct ?
a. The gain is subject to tax in the Philippines since the commodity involved manufactured in the
Philippines
b. The gain is subject to tax in the Philippines since the buyer is a citizen of the Philippines
c. The gain is both subject to tax in the Philippines and abroad since the commodity involved is
manufactured in the Philippines.
d. The gain is taxable abroad because it is sold abroad

30. Pedro, a resident alien and Romy a non resident alien executed a contract of sale in Japan
whereby Romy shall purchase the lot owned by Pedro in the Philippines. Pedro gains 1,000,000
in the exchange. Which is true?

a. The gain is exempt since the gain is derived outside the Philippines
b. The gain is not subject to Philippine tax since Juan is a resident alien
c. The gain is subject to Philippine tax because Pedro is a resident alien
d. The gain is subject to Philippine tax because the property is in the Philippines

31. The general rule in income taxation

a. Final income taxation
b. Capital gains taxation
c. Regular income taxation
d. Fringe benefit taxation

32. Active income is subject to

a. Regular tax
b. Capital gains tax
c. Final tax
d. Any of these

33. Which of the foregoing are passive income are subject to

a. A only
b. B only
c. Both a and b
d. Either a or b

34. Which of the foregoing are capital gains subject to?

a. A only
b. C only
c. Either a or c
d. Both a and c

35. The net amount of regular income subject to regular tax is called
a. Taxable income
b. Compensation income
c. Net income
d. Gross income

36. Which is not generally subject to regular income tax?

a. Compensation income
b. Business income
c. Professional income
d. Passive income

37. What are the allowable deductions against gross income?

a. Business expenses
b. Family support
c. Personal expenses by the taxpayer
d. Expenses of employment

38. Deductions are allowed to

a. Employed taxpayers
b. Individual taxpayers only
c. Corporate taxpayers only
d. Taxpayers engaged in business

39. Personal exemptions are allowed to

a. Employed taxpayers
b. Individual taxpayers only
c. Corporate taxpayers only
d. Taxpayers engaged in business

40. Which is not a feature of the regular income tax ?

a. Net income tax
b. Final withholding tax
c. Annual tax
d. Creditable withholding tax

41. Mrs. Santos had a gross taxable compensation income of 400,000 . she also earned an
additional 2,000 by investing her money in time deposits plus 3,000 interest income from
lending money to a friend . compute her taxable income
a. 303,000
b. 302,000
c. 300,000
d. 403,000
42. Ms. Castro had a business net income of 300,000. She also earned 5,000 commission from
selling cellular cards and 12,000 dividends from a domestic corporation. Compute her taxable
income.
a. 300,000
b. 312,000
c. 305,000
d. 317,000

43. Mr. Pineda earned total gross receipts of 800,000 and paid 300,000 in expenses in his
accounting practice . During the same year , he also earned a total of 60,000 net gain from the
sale of domestic stocks directly to a buyer. He also disposed a vacant lot of net gain of 140,000 .
What is the taxable income of Mr. Pineda?
a. 400,000
b. 460,000
c. 500,000
d. 600,000

44. Mr. Montoya earned a gross compensation income of 200,000 , exclusive of 20,000 non taxable
compensation income and gross business income of 500,000 before expenses of 200,000 . He
also earned book royalties of 10,000 and 8,000 interest income from clients promissory notes .
Mr. Montoya has personal expenses of 170,000 during the year. What is Mr. Montoya’s taxable
compensation income?
a. 30,000
b. 180,000
c. 200,000
d. 220,000

45. What is Mr. Montoya’s net income from business?

a. 300,000
b. ]308,000
c. 310,000
d. 518,000

46. What is Mr. MONTOYA’S taxable income?

a. 508,000
b. 450,000
 c. 558,000
d. 468,000

47. MR. Bautista earned a compensation income of 120,000 and net income from business of
300,000. He also earned 8,000 prizes from a dancing competition and 45,000 royalties from his
musical composition. Mr. Bautista has 150,000 personal expenses . compute the taxable
income .
a. 473,000
b. 465,000
c. 428,000
d. 420,000

48. In 2020, Mr. David, earned 450,000 compensation income but incurred 120,000 net loss in the
business . what is her taxable income assuming the incurred personal expenses of 100,000?
a. 450,000
b. 550,000
c. 330,000
d. 450.000

49. Mr. Gomez with a 75,000 personal exemption , had the following data in 2020

PHILIPPINES ABROAD

Gross income from sales 4,000,000 6,000,000

Interest income on deposits 40,000 80,000

Less: deductions 2,000,000 3,600,000

Compute the taxable income of MR. Gomez is a resident citizen

a. 4,480,000
b. 4,520,000
c. 2,040,000
d. 2,000,000
50. In the immediately preceding problem, compute the taxable income if Mr. Gomez is a non
resident citizen
a. 4,520,000
b. 4,480,000
c. 2,040,000
d. 2,000,000

51. Statement 1 Items of passive income from abroad are subject to regular income tax
Statement 2 Items of passive income from the Philippines are generally subject to final income
tax

Which statement is generally correct?

a. Statement 1
b. Statement 2
c. Both statements
d. Neither statement

52. Which is true with the regular income tax?

a. Certain items of income are subject to final withholding tax
b. Tax is payable at regular intervals
c. Income tax returns are not required
d. All of these

53. Which is not a feature of regular income tax?

a. It generally applies to all items of gross income not subject to final tax
b. Creditable withholding tax
c. Gross income tax
d. Accounting period

54. Statement 1 capital gains are generally subject to capital gains tax
Statement 2 ; items of passive income in the Philippines are generally subject to regular income
tax

a. Statement 1 is true
 b. Statement 2 is true
c. Both statements 1 and 2 are true
d. Both statements 1 nor 2 is true

55. Deductions from gross income are

a. Personal expenses
b. Business expenses
c. Either a or b
d. Neither a nor b

56. Which of the following statement best distinguishes deductions from exclusions from gross
income
a. Deductions can be claimed by citizens while 250,000 income exemption cannot be claimed by
aliens
b. Deductions are outflows from gross income while exclusions are not outflows from gross income
c. Both deductions and exclusions are deducted from gross income
d. All of these

57. Progressive income tax does not apply to a

a. Non resident alien
b. Resident alien
c. Non resident citizen
d. Resident citizen

58. Mr. Bautista collected the 1,000,000 insurance proceeds of Mr. PINEDA which he bought from
the latter for 400,000. Before the death of MR. Pineda , Mr. Bautista paid total premiums of
200,000. Determine respectively the exclusion in gross income and the inclusion in gross income

a. 1,000,000 ; 0
b. 0 ; 1,000,000
c. 400,000 ; 600,000
d. 600,000 ; 400,000
59. Mr. Castro surrendered his life insurance policy and received a cash surrender value of 800,000
after contributing 700,000 in annual premiums. Determine respectively the total exclusion in
gross income and the inclusion in gross income
a. 800,000 ; 0
b. 0 ; 800,000
c. 100,000 ; 700,000
d. 700,000 ; 100,000

60. Mr. Tolentino died. His heirs collected the 2,000,000 proceeds of his life insurance policy. Mr.
Tolentino previously paid a total payment of 500,000 in premiums. Determine respectively the
exclusion in gross income and the inclusion in gross income.

a. 2,000,000 ; 0
b. 500,000 ; 1,500,000
c. 2,000,000 ; 0
d. 0 ; 2,000,000

61. A non resident foreign corporation is taxable on

a. World taxable income
b. World gross income
c. Philippine taxable income
d. Philippine gross income

62. The resident and non resident classifications does not apply to
a. Domestic corporation
b. Foreign corporation
c. Both domestic and foreign corporations
d. Neither domestic nor foreign corporations

63. Which of these is a special corporate taxpayer?

a. A private school
b. A private hospital
c. A business partnership
d. A trading corporation
64. As a rule a non profit , non stock corporations are exempt from income tax. Which of these non
profit entities is subject to income tax?
a. Association
b. School
c. Farmers cooperative
d. Hospital

65. The exemption of non profit corporation specifically pertains to income from
a. Related parties
b. Unrelated activities
c. Related activities
d. Both related and unrelated activities