ACT 153 - Diagnostic Exam in Taxation Anydesk Attempt Review

3/12/22, 12:02 PM ACT 153 - Diagnostic Exam in Taxation (Anydesk): Attempt review
ACT 153 - Special Topics and Updates: Taxation
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Started on Saturday, 12 March 2022, 9:05 AM

State Finished
Completed on Saturday, 12 March 2022, 12:02 PM
Time taken 2 hours 56 mins
Question 1
Complete
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In 2021, Levi sold his car for PhP 1M to his friend, Villa. The fair market value of the car at the time of sale was PhP 3M. How much is the
donor’s tax due, if there is any?
a. PhP 105,000
b. PhP 0
c. PhP 120,000
d. PhP 200,000
Question 2
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Mr. Sua Bee operates a convenience store while he offers bookkeeping services to his clients. In 2021, his gross sales amounted to PhP
800,000, in addition to her receipts from bookkeeping services of PhP 300,000 and incurred costs and expenses of PhP 300,000 and PhP
100,000, respectively. Compute the tax due using the 8% tax rate?
a.
PhP 220,000
b. PhP 105,000
c. PhP 68,000
d. PhP 0
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https://online.msuiit.edu.ph/moodle/mod/quiz/review.php?attempt=176721&cmid=107205&showall=1 1/30
Question 3
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Among the nature of taxation is that it is an inherent power being an attribute of sovereignty. Which of the following is not among its
manifestation as an inherent power?
a. Taxes may be imposed even without a constitutional grant.
b. Courts do not issue an injunction to enjoin the collection of taxes.
c. There should be no improper delegation of the power to tax.
d. The State has the right to select the subjects and objects of taxation.
Question 4
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The rate of discount available to senior citizens on the basic necessities and prime commodities is:
a. Fifteen (15) percent
b. Twenty (20) percent
c. Five (5) percent
d. Ten (10) percent
Question 5
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Sinigang Company, a domestic corporation, is a dealer of various goods imported from Thailand and Taiwan. What is the proper supporting
document to allow the input VAT on importations to be claimed as tax credits by Sinigang Company?
a. Single administrative document
b. Deed of sale
c. Official receipt
d. Sales invoice
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Question 6
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Consider the following statements:
1. There’s no Constitutional prohibition on double taxation in the Philippines.

2. The Senate can draft versions of tax bills from the Congress but cannot be delegated with the legislative function.
3. The Taxation aims to promote general welfare and reduce social inequality.
4. The Commissioner of the Bureau of Internal Revenue (BIR) is authorized to interpret tax laws, decide tax cases and make
assessments and prescribe additional requirements for Tax Administration and Enforcement.
a. Only one of these statements is correct.
b. All of the statements are correct.
c. All of the statements are correct.
d. Only one of these statements is incorrect.
Question 7
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Katsu Company had taxable income amounting to PhP 650,000 before considering the following information for taxable year 2021:
Net operating loss carry-over – PhP 100,000

Excess MCIT carry-over – PhP 8,000
Creditable Withheld Taxes at Source – PhP 15,000
Quarterly Tax Payments – PhP 40,000
Excess Prior Year Tax Credits – PhP 5,000
Compute the income tax payable or due of Katsu Company.
a. PhP 69,500
b. PhP 74,500
c.
PhP 80,300
d. PhP 0
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Question 8
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When is the deadline for the payment of VAT liability to the BIR of Coffee Crumble, Inc. for the month ended February 28, 2022? Coffee
Crumble, Inc. is an entity belonging to Group C under the staggered filing.
a. March 23, 2022
b. March 24, 2022
c. March 25, 2022
d. March 22, 2022
Question 9
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Which of the following is true regarding barangay micro-business enterprise (BMBE)?
a. A BMBE is exempt from the payment of documentary stamp tax.

b. A BMBE is exempt from the payment of excise tax.
c. A BMBE shall always be a non-VAT registered taxpayer.
d. A BMBE is exempt from the coverage of the minimum wage law.
Question 10
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Which of the following is classified as a conjugal property under the conjugal partnership of gains (CPG) relations?
a. Property acquired through onerous title using common fund
b. Property acquired through gratuitous transfer
c. Properties owned before marriage

d. Property acquired using exclusive fund
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Question 11
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Tom received a car as a gift from Carla on January 1, 2019. The value of the car at the time it was donated to Tom was PhP 1,000,000.
However, Tom assumed a PhP 200,000 mortgage on the car. The corresponding donor’s tax was paid by Carla. Tom paid a total of PhP
100,000 on the mortgage in 2019 and 2020.
On November 1, 2021, Tom died due to complications after contracting COVID-19. His gross estate at the time of his death amounted to PhP
5,000,000 including the car received from Tom valued at PhP 700,000.
The following deductions where also claimed by his beneficiaries:
Compute the allowable vanishing deduction.
a. PhP 292,500
b. PhP 295,500
c. PhP 0
d. PhP 295,200
Question 12
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Scottie, an employee of the City Mayor’s office in Iligan City, has the following compensation income for the calendar year (CY) 2020:
During the celebration of Araw ng Iligan, Scottie was awarded PhP 20,000 for rendering 10 years of service in the city. In addition, he also
received 13th to 15th month pays equivalent to his basic monthly pay. Scottie has three (3) qualified dependents during the covered period.
Finally, he has no income other than those mentioned above.
Compute the non-taxable compensation income of Scottie.
a. PhP 165,150
b. PhP 71,550
c. PhP 90,000
d. PhP 151,100
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Question 13
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Which of the following documents issued to the taxpayers should merit a provision for deficiency taxes in the books of the taxpayer?
a. Final Assessment Notice
b. Letter of Authority
c. Preliminary Assessment Notice
d. Letter of Notice
Question 14
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When Vladimir requested to meet Putin, the latter already know that the former will only ask for another loan. Which of the following is
incorrect regarding the requisites for deductibility of interest for income tax purposes?
a.
The indebtedness must be connected with the taxpayer’s trade, business or exercise of profession.
b. The interest must have been stipulated in an oral or a written contract.
c. In case of interest incurred to acquire property used in trade, business or exercise of profession, the same was not treated as a
capital expenditure.
d.
The interest payment arrangement must not be between related taxpayers as mandated in Section 34(B)(2), in relation to Section
36(B), both of the Tax Code of 1997, as amended.
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Question 15
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Paula Lamove, a resident decedent left the following upon her death:
Cash in bank (from various peso accounts) – PhP 8,000,000
Cash in bank (from various FCDU accounts) – PhP 9,600,000
Real property, Philippines – PhP 10,000,000
Real property abroad – PhP 10,000,00
The real property located in the Philippines was mortgaged for PhP 8,000,000. Determine the gross estate of Paula Lamove.
a.
PhP 27,600,000
b.
PhP 28,000,000
c. PhP 37,600,000
d.
PhP 17,600,000
Question 16
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Which of the following is considered as an exempt transaction for VAT purposes?
a. Lease of a commercial unit with a monthly rental of PhP 15,000
b. Sale of coveralls for COVID-19 prevention, the raw materials are locally available
c. Association dues collected by condominium corporations
d. Sale of a personal effect belonging to a resident of the Philippines returning from abroad
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Question 17
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Which of the following is false regarding the compliance requirements in filing the Annual Income Tax Return (ITR) of a domestic
corporation?
a.
The AFS to be submitted to the BIR needs a Statement of Management’s Responsibility (SMR) for the Annual ITR as attachment.
b. The tax credits claimed as reduction against the income liability are disclosed on a per vendor and per ATC basis in the Summary
Alphalist of Withholding Taxes (SAWT) to be electronically submitted to the BIR.
c.
The audited financial statements (AFS) supporting the Annual ITR shall be submitted through eAFS.
d.
The tax credits claimed as reduction against the income liability should be supported by CWT Certificates (BIR Form No. 2307). The
certificates are not required to be submitted to the BIR as long as archived properly by the taxpayers.
Question 18
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Consider the following statements:
1. The power of taxation involves the promulgation of rules.

2. The government has the power to impose taxes even without a constitutional grant.
3. Taxes are imposed based upon the lifeblood theory.
4. There should be no improper delegation of the power to tax.
a. Statements 2 and 4 are both manifestations of taxation being legislative in nature.
b. Statements 1 and 4 are both manifestations of taxation being inherent in nature.
c.
Statements 2 and 3 are both manifestations of inherent nature of taxation.
d. Statements 1 and 2 are both manifestations of taxation being legislative in nature.
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Question 19
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Dr. Mike, a senior citizen, is engaged by East Medical Center as its visiting consultant. Dr. Mike receives his professional fees from East
Medical Center net of 10% withholding tax on professionals. Dr. Mike questioned such, contending that he is a senior citizen and therefore,
he is entitled to exemptions under the law, or any form of discount on tax. You were asked to intervene. Decide.
a. Dr. Mike is correct. He is exempted from income tax and is therefore exempted from the requirements of withholding.
b. Dr. Mike is correct. He is entitled to a discount in his taxes paid. Therefore, the withholding tax should be 8% only.
c. East Medical Center is correct. Dr. Mike enjoys no exemption from income taxes and is therefore subject to withholding tax on
professionals.
d. Neither are correct. East Medical Center should have applied the withholding tax applicable to employees against Dr. Mike’s
salaries.
Question 20
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A CPA Certification shall be required if the Gross Estate of the decedent exceeds:
a. PhP 5,000,000
b. PhP 2,000,000
c. PhP 200,000
d. PHP 500,000
Question 21
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A company employs 5 senior citizen employees and 3 PWD employees, all of which equally receive PhP1,200,000 in annual compensation
each. How much would be the company’s additional deductions for the year?
a. PhP 1,800,000
b. PhP 2,400,000
c. PhP 2,040,000
d. None of the choices
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Question 22
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If a non-VAT taxpayer issues a VAT invoice for a non-VAT sale, the total business tax due shall be:
a. 15% + 50% surcharge
b. 12% + 50% surcharge
c. 15% + 25% surcharge
d. 12% + 25% surcharge
Question 23
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Dr. Whack Wak is a VAT-registered professional plastic surgeon. Before TRAIN and CREATE Law, she normally bills her customers PhP
150,000, for a buttocks augmentation procedure, an invasive cosmetic procedure which involves altering the appearance of a person’s
buttocks, most commonly by giving it more prominence. In addition, Dr. Whack Wak likewise provides painkilling medicines in the amount of
PhP 20,000, and laboratory services for PhP 30,000.
Can Dr. Whack Wak avail of the 8% income tax option assuming her gross sales/receipts do not exceed PhP 3M?
a. Yes, but only as to the PhP 150,000 buttocks augmentation procedure.
b.
No, because the doctor is a VAT-registered doctor.
c. No, because the doctor is a purely compensation income earner.
d. Yes, but only as to the receipts from painkilling medicines and laboratory services.
Question 24
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Black Velvet Company purchased capital goods with the following details:
Assuming there are no other capital goods from previous periods, compute the total input tax on capital goods that can be claimed in the
January 2022 VAT return?
a. PhP 154,750
b. PhP 154,000
c. PhP 157,750
d. PhP 156,000
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Question 25
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McDonalds sold BTS meals amounting to PhP 1,164.80 to a senior citizen who presented a senior citizen identification card. The senior
citizen was accompanied by his three (3) Armies grandchildren.
Compute the amount billable to the senior citizen.
a.
PhP 1,164.80
b. PhP 1,133.60
c. PhP 1,106.56
d. PhP 1,081.60
Question 26
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With respect to local taxes, which agency or office primarily issues advisory tax rulings?
a. Bureau of Local Government Finance
b. Bangko Sentral ng Pilipinas

c. Office of the Local Treasurer
d. Bureau of Internal Revenue
Question 27
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Alyssa Valdez, a national athlete, purchased foods in a restaurant in Makati City amounting to PhP 4,280, inclusive of VAT. Assuming she
was able to present a Philippine National Sports Team Identification Card and a booklet, compute the total amount due from her purchase.
a. PhP 800
b. PhP 1,000
c. PhP 920
d. PhP 896
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Question 28
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Which of the following proceeds shall be included in the taxable gross estate?
a.
Amount receivable by any beneficiary, irrevocably designated in the policy by the insured
b. Insurance proceeds from Social Security System (SSS)
c.
Amount receivable by any beneficiary designated in the insurance policy
d.
Proceeds of group insurance taken out by a company for its employees
Question 29
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Gratuitous transfer of property to this institution is not subject to donor’s tax but may be subject to estate tax if transferred by succession:
a. Charitable
b. Religious
c. Cultural
d. Social Welfare
Question 30
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It speaks of the scope of power of taxation wherein taxation is considered absolute due to completeness.
a. Plenary
b. Comprehensive
c. Supreme
d. Unlimited
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Question 31
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To improve chances of finding love, Miss Menchie decided to undergo liposuction procedure and sought the services of Dr. Lee Min, a clinic
operated outside the hospital and owned by Korya Medical Group, Inc. Dr. Lee Min charged Miss Menchie the amount of PhP 262,192
[inclusive of 12% value-added tax (VAT) but exclusive of excise tax] for the service rendered.
Compute the total amount to be collected from Miss Menchie.
a. PhP 262,192.00
b. PhP 275,301.60
c. PhP 245,805.00
d. PhP 0
Question 32
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Who among the following is subject to payment of community tax?
a. Transient visitors whose stay in the country exceeds 3 months

b.
Ambassador
c. Consul
d. None of the above
Question 33
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The following are instances when penalties and/or interest imposed on the taxpayer may be abated or cancelled on the ground that the
imposition thereof is unjust and excessive, except when:
a. Filing of the return or payment of the tax is made at the wrong venue.
b. Taxpayer is declared insolvent or bankrupt.
c. Assessment is brought about by or as a result of the taxpayer’s non-compliance with the law due to a difficult interpretation of the
said law.
d. Taxpayer’s mistake in payment of his tax is due to erroneous written official advice of a revenue officer.
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Question 34
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Which of the following is false?
a. Administrative feasibility entails capability of the tax system to be effective and efficient in implementing rules and regulations.
b. Tax is unconstitutional if it operates as a prior restraint on exercise of religion.
c. The application of tax laws retroacts to the start of the taxable year when enacted in the middle of the same taxable year.
d. The rule of uniformity in taxation means that all articles of the same class are taxed at the same rate.
Question 35
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Salted Eggsperience Company is registered as a manufacturer of school supplies March 2015. During calendar year (CY) 2020, the
Company has the following data as a result of the business:
In CY 2019, Salted Eggsperience Company has excess income tax credits opted to be claimed as Tax Credit Certificate (TCC) and Net
Operating Loss Carry-Over (NOLCO) amounting to PhP 40,000 and PhP 60,000, respectively.
Assuming the revised corporate income tax rates were implemented as they are (27.5% and 1.5% are used only in the Annual ITR), compute
the income tax payable in the Annual ITR of Salted Eggsperience Company.
a. PhP 121,500
b.
PhP 580,000
c. PhP 1,512,500
d. PhP 570,500
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Question 36
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YAKINIKUDON Inc. was assessed deficiency of expanded withholding tax (EWT) and final withholding value-added tax (WVAT) for taxable
year 2003. It filed a protest against the deficiency tax assessments.
Almost three years later, or on 28 March 2011, YAKINIKUDON Inc. simultaneously received an Amended Assessment Notice (AAN),
reflecting an amended deficiency EWT after reinvestigation and a Final Decision on Disputed Assessment (FDDA) for both deficiency EWT
and WVAT.
Other dates relevant to the assessment are as follows:
April 8, 2011 – YAKINIKUDON Inc. filed a letter-reply to the AAN and FDDA, which was received by the BIR on 11 April 2011.
May 9, 2011 – The BIR sent a letter to YAKINIKUDON Inc., claiming that YAKINIKUDON Inc.’s letter-reply produced no legal effect since it
was the improper remedy, as YAKINIKUDON Inc. should have appealed the final decision of the Commissioner of Internal Revenue (CIR)
to the Court of Tax Appeals (CTA) within 30 days from receipt of the CIR’s decision; otherwise, the assessment became final, executory
and demandable.
May 27, 2011 – YAKINIKUDON Inc. filed a Petition for Relief from Judgment with the CIR arguing that it failed to file its proper appeal of
the FDDA due to its mistake and excusable negligence as it was not assisted by counsel.
June 29, 2011 – YAKINIKUDON Inc. received a Preliminary Collection Letter, which was deemed a denial of YAKINIKUDON Inc.’s Petition
for Relief from Judgment.
July 26, 2011 – YAKINIKUDON Inc. filed a Petition for Review with the CTA, which dismissed the case for lack of jurisdiction due to the
lapse of the statutory period to appeal. YAKINIKUDON Inc. appealed to the Supreme Court.
Which is of the following is false?
a. YAKINIKUDON Inc.’s reply dated April 8, 2011 to the Regional Director was a protest of both the AAN and the FDDA.
b.
None of the above
c. Since the deficiency EWT is a component of the aggregate tax due reflected in the FDDA, the FDDA cannot be considered as the
final decision of the CIR as one of its components - the amended deficiency EWT - is still under protest.
d. The AAN reflects the amended deficiency EWT after reinvestigation, while the FDDA reflects the Final Decision on the deficiency
EWT and WVAT.
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Question 37
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Mr. J died leaving behind the following:
Ms. J – Widow
Vlad and Vien – Legitimate children
Jacq, Julia and Jayes – Illegitimate children
Mr. and Mrs. J had the following properties:
Based on the net distributable estate, compute the total inheritance of Jacq, Julia and Jayes.
a. PhP 16,000,000
b. PhP 8,000,000
c. PhP 12,000,000
d. PhP 0
Question 38
Complete
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Salted Eggsperience Company is registered as a manufacturer of school supplies March 2015. During calendar year (CY) 2020, the
Company has the following data as a result of the business:
In CY 2019, Salted Eggsperience Company has excess income tax credits opted to be claimed as Tax Credit Certificate (TCC) and Net
Operating Loss Carry-Over (NOLCO) amounting to PhP 40,000 and PhP 60,000, respectively.
Assuming the revised corporate income tax rates were implemented as they are (27.5% and 1.5% are used only in the Annual ITR), determine
the following income tax payable in the first quarter.
a. PhP 30,000
b. PhP 427,400
c. PhP 402,000
d. PhP 382,000
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Question 39
Complete
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Which of the following local government units has the most comprehensive power of taxation?
a. Barangay
b.
City
c. Municipality
d. Province
Question 40
Complete
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All of the following would necessitate the imposition of 50% surcharge, except:
a. Willful neglect to file the return within the period prescribed.
b.
Failure to file with the proper internal revenue officer.
c.
Fraudulent return is willfully made.
d.
False return is willfully made.
Question 41
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Mr. and Mrs. Ssipi donated the following in 2020:

March 30
Land valued at PhP 620,000 to Reign, legitimate daughter, on account of marriage
Cash of PhP 100,000 to Raven, legitimate son, for successfully passing the CPA Licensure exam
Second hand car (capital property) valued at PhP 400,000 to Mr. Ssipi long-time friend, Romulo
May 15
Cash of PhP 200,000 to Lola, mother of Mrs. Ssipi
Jewelry (paraphernal property) worth PhP 100,000 to Emma, Mrs. Ssipi’s best friend
Compute the donor’s tax due on the May 15 donation for Mrs. Ssipi.
a. PhP 30,600
b. PhP 6,000
c. PhP 12,000
d.
PHP 6,600
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Question 42
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With no more money left, the heirs of Vina Bangko were left with no recourse but to withdraw from the bank account of Vina who died one
month ago. Vina’s bank deposits amount to PhP 2,400,000. Vina’s net taxable estate after deducting special deductions and the shares of
the surviving spouse is PhP 12,500,000, excluding the amount withdrawn. Pending the payment of estate taxes to the BIR, what is the
maximum amount that the heirs of Vina can receive from the bank in relation to Vina’s bank account?
a. PhP 2,332,000
b. PhP 2,400,000
c. PhP 2,256,000
d. PhP 2,112,999
Question 43
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Which of the following is not the remedy of the government in tax collection?
a. Forfeiture
b.
Protest
c. Tax lien
d. Compromise
Question 44
Complete
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Oreo Pancake Corporation, a manufacturer, has a gross income of PhP 190,000,000 for CY 2021 on its second year of operations. Its total
assets amounted to PhP 50,000,000, net of the value of the land amounting to PhP 6,000,000 where its manufacturing plant and business
operations are situated. Its cost of sales and allowable expenses amounted to PhP 100,000,000 and PhP 50,000,000, respectively. Compute
for its income tax due in CY 2021.
a. PhP 0
b. PhP 28,000,000
c. PhP 10,000,000
d. PhP 35,000,000
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Question 45
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The following taxes apply to BOI-registered enterprises but not to a PEZA-registered enterprise:
a. All of the above

b. 5% gross income tax
c. Improperly accumulated earnings tax
d. Branch profit remittance tax
Question 46
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When does the local business tax accrue?
a. April 15
b. March 1
c. January 1
d. Evenly throughout the year
Question 47
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The valuation of real property to be included in the gross estate is:
a. The zonal value
b. Fair market value as determined by the local assessor
c. The zonal value, fair market value as determined by the local assessor, fair market value per independent assessor, whichever is
highest.
d. The zonal value, fair market value as determined by the local assessor, whichever is higher.
Question 48
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This issuance of the Bureau of Internal Revenue (BIR) is aimed to provide clarifications of previous regulations.
a. Revenue Memorandum Order

b. Revenue Audit Memorandum Order
c. Revenue Regulation
d. Revenue Memorandum Circular
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Question 49
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The transport of passengers by air within the Philippines is:
a. Subject to 12% value-added tax
b. Subject to 0% value added-tax
c. Subject to 3% common carrier’s tax
d. Exempt from both common carrier’s tax and value-added tax
Question 50
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Which of the following is false with regard to the situs or territoriality of taxation?
a. Land ABC, a real property, will be taxed in the location of the property.
b. A car sold to Burrito Company is taxable in the place the car is originally purchased.
c. Shares of stocks of Hashbrown Company, a domestic corporation, owned by a non-resident alien is taxable in the Philippines.
d. Bank deposits are taxable in the location of the depository bank.
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Question 51
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During calendar year (CY) ended December 31, 2018, All Too Well Corporation has the following information after the completion of the
yearly audit:
After considering all the transactions that transpired during the year, the reconciling items are as follows:
In addition, based on the filed quarterly income tax returns (ITRs) for the CY ended December 31, 2018, the Company has no income tax
payments but has creditable withholding taxes (CWTs) amounting to PhP 50,004,270. Also, the Company is in excess tax credits position
amounting to PhP 18,982,010 in its filed annual ITR for CY 2017.
Given the above information, compute the Company’s excess MCIT over RCIT credits in CY 2017, if there are any, which would result to an
increase its excess tax credits by PhP 4,986,139 at the end of CY 2018.
a.
PhP 0
b.
PhP 2,029,830.80
c. PhP 3,405,500.80
d. PhP 2,025,560.80
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Question 52
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Which of the following is false in the imposition of excise tax?
a. The excise tax collected from the buyer shall be reflected separately in the invoice issued by the producer covering the coal sold
and shall not form part of the selling price of the coal.
b. To be exempt from excise tax, automobile manufacturers shall present Certificate of Non-Coverage (CONC).
c. The excise tax imposed on non-essential services shall not apply to procedures necessary to ameliorate a deformity arising from or
directly related to a congenital or developmental defect or abnormality.
d. The excise tax on locally produced coal shall be collected from the first buyer/possessor if not paid by the producer of product.
Question 53
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Ms. Pao Loo, a writer of Kwello series in Twitter, earned the following passive income for the taxable year 2020:
The foreign corporation earned 60% of its income from within the Philippines in the last three (3) years prior to declaration of dividends. How
much is the final tax due on the above income of Ms. Pao Loo if she is a non-resident alien engaged in trade or business?
a.
PhP 192,000
b. PhP 196,000
c. PhP 199,500
d.
PhP 190,000
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Question 54
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Which of the following benefits is not subject to fringe benefits tax (FBT)?
a. Fixed monthly vehicle maintenance allowance of PhP 5,000 granted to expatriates holding supervisory and managerial positions of
Company A.
b. Home personal computers granted to NRF employees by Company C (ownership is transferred to the employees) in consonance
with the objective to develop, improve internet, e-business and PC skills, and likewise advance company products to the said
employees and their families.
c. Residential and condominium units not adjacent to the business premises leased by Company B for its Japanese non-rank and file
(NRF) employees.
d. Tuition fee shouldered by Company D for the child of its Japanese expatriate.
Question 55
Complete
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A fraudulent return for 2009 income was filed on April 12, 2010. The fraudulent return was discovered on June 10, 2014. When is the last day
to send valid assessment?
a. June 10, 2017
b. June 10, 2024
c. April 15, 2023
d. April 15, 2013
Question 56
Complete
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Which of the following charges is not considered as part of the landed cost of an importation?
a. Excise tax
b. Bank charge
c. Super green lane fee
d. Import processing fee
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Question 57
Complete
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Big Banks, a banking institution, had the following transactions for the taxable month:
Compute the bank’s gross receipts tax.
a. PhP 180,089
b. PhP 175,440
c.
PhP 164,640
d. PhP 173,200
Question 58
Complete
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Which of the following is not an essential of an acceptable accounting method for tax purposes?
a. There should be a distinction between revenue and capital expenditures.
b.
In all cases in which production, purchase or sale of merchandise is an income producing factor, inventories at the beginning and at
the end of the accounting period should be considered.
c.
The accounting method should adhere strictly to generally accepted accounting principles.
d. Expenses to restore the property or prolong its useful life should be added to the property account or charged against depreciation.
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Question 59
Complete
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Radio Balita Company is a radio company granted franchise by the government. Radio Balita had the following gross receipts related to its
radio operations for three years. Radio Balita has been properly registered with the BIR annually.
Compute the franchise tax in 2021.
a. PhP 525,000
b. PhP 210,000
c. PhP 0
d. PhP 315,000
Question 60
Complete
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Who shall have the main authority to grant tax incentives under the CREATE Act?
a. Fiscal Incentives Review Board

b. President of the Philippines
c. National Economic Development Authority
d. Board of Investments
Question 61
Complete
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If a non-resident foreign corporation would invoke an applicable tax treaty to his royalty income earner in the Philippines, it would be filing:
a.
A Tax Treaty Relief Application with the International Tax Affairs Division of the BIR
b. A Tax Treaty Relief Application with the International Tax Affairs Division and RDO 39 of the BIR
c. A Certificate of Residency for Tax Treaty Relief with the International Tax Affairs Division of the BIR
d. A Certificate of Residency for Tax Treaty Relief with the International Tax Affairs Division and RDO 39 of the BIR
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Question 62
Complete
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Pad Thai Corporation has the following transactions for the month of January 2020:
Donation of real property amounting to PhP 100,000 to the city government of Wuhan;
Issued a bill of exchange with face value of PhP 50,000 to Aaron Waters; and
Issued 200 warehouse receipts.
Assuming that Pad Thai shoulders all related taxes on the above transactions, compute the documentary stamp tax (DST) that Pad Thai
should remit to the Bureau of Internal Revenue (BIR) for the month of January 2020.
Use the below DST rates:
a.
PhP 6,150
b. PhP 3,000
c.
PhP 180
d.
PhP 30
Question 63
Complete
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French Toast Company entered into a lease contract with an individual. The term is 1 year with a monthly minimum guaranteed rate of PhP
50,000 or 10% of monthly sales. CUSA was agreed to be at 4.5% of the monthly rental payments.
DST rate for leases and other hiring agreements is PhP 6.00 for the first PhP 2,000 and PhP 2.00 for every PhP 1,000 or fractional thereof in
excess of the first PhP 2,000 for each year of the term of the said contract.
Compute the DST due of French Toast Company, if there is any.
a. PhP 0
b. PhP 1,196
c. PhP 1,202
d. PhP 1,256
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Question 64
Complete
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The Daily Publisher is a publishing house, and it has several publications. The following are the publications, their descriptions, and their
corresponding sales for the taxable quarter ending September 30, 2018.
How much is output VAT?
a. PhP 0
b. PhP 3,600,000
c. PhP 9,000,000
d. PhP 5,760,000
Question 65
Complete
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For export enterprises, the period of enjoyment of the Special Corporate Income Tax is:
a. 10 years
b. 7 years
c. 6 years
d. 5 years
Question 66
Complete
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Which of the following is not a remedy of the taxpayers before payment?
a. Administrative protest
b. Claim for tax credit
c.
Request for reinvestigation
d. Judicial protest
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Question 67
Complete
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Which of the following statements is not correct in determining the tax exemption of non-stock, non-profit corporations?
a. In determining entitlement to exemptions, Organization Test is used to ensure that the regular activities of the corporation or
association are exclusively devoted to the accomplishment of purposes specified in Section 30 of the 1997 Tax Code, as amended.
b. The tax exemption granted under Section 30 does not cover withholding taxes on compensation income of the employees of the
corporation, or the withholding tax on income payments to persons subject to tax pursuant to Section 57 of the 1997 Tax Code, as
amended.
c. If the corporation is engaged in the sale of goods or services in the course of a business pursuit, including transactions incidental
thereto, its revenues derived shall also be subject to 12% value-added tax (VAT).
d. Corporations falling under Section 30 must be non-profit and must also demonstrate that its earnings or assets do not inure to the
benefit of any of its trustees, organizers, officers, members or any specific person.
Question 68
Complete
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Which of the following is true with regard to the request for reconsideration and request for reinvestigation?
a. If the request for reinvestigation is granted, the 180 days of inaction shall be counted from the date of filing the protest or letter.
b. The request for reconsideration shall suspend the 3-year prescription period while the request for reinvestigation shall not.
c. The request for reinvestigation can be availed right away even without the approval of the BIR Commissioner.
d. The request for reconsideration seeks to re-evaluate assessment based on existing records without the need of submitting
additional documents.
Question 69
Complete
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Which of the following is true?
a. Tax that operates as a prior restraint of press freedom is unconstitutional.
b. The determination of the correct taxes to be remitted by taxpayers is part of the payment stage of taxation.
c. Tax avoidance connotes fraud through the use of pretenses or forbidden devised to lessen or defeat taxes.
d. For any tax obligation, a taxpayer can settle liabilities in kind as long as it is levied for public purpose.
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Question 70
Complete
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Tom received a car as a gift from Carla on January 1, 2019. The value of the car at the time it was donated to Tom was PhP 1,000,000.
However, Tom assumed a PhP 200,000 mortgage on the car. The corresponding donor’s tax was paid by Carla. Tom paid a total of PhP
100,000 on the mortgage in 2019 and 2020.
On November 1, 2021, Tom died due to complications after contracting COVID-19. His gross estate at the time of his death amounted to PhP
5,000,000 including the car received from Tom valued at PhP 700,000.
The following deductions where also claimed by his beneficiaries:
Assuming the corresponding donor’s tax was not paid by Juan upon donation, how much is the allowable vanishing deduction?
a. PhP 0
b. PhP 295,200
c. PhP 295,500
d. PhP 292,500
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3/12/22, 12:02 PM ACT 153 - Diagnostic Exam in Taxation (Anydesk): Attempt review

ACT 153 - Special Topics and Updates: Taxation

Started on Saturday, 12 March 2022, 9:05 AM

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a. Taxes may be imposed even without a constitutional grant.

b. Courts do not issue an injunction to enjoin the collection of taxes.

c. There should be no improper delegation of the power to tax.

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a. Fifteen (15) percent

b. Twenty (20) percent

c. Five (5) percent

d. Ten (10) percent

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a. Single administrative document

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Consider the following statements:

1. There’s no Constitutional prohibition on double taxation in the Philippines.

a. Only one of these statements is correct.

b. All of the statements are correct.

c. All of the statements are correct.

d. Only one of these statements is incorrect.

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Net operating loss carry-over – PhP 100,000

Compute the income tax payable or due of Katsu Company.

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a. March 23, 2022

b. March 24, 2022

c. March 25, 2022

d. March 22, 2022

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Which of the following is true regarding barangay micro-business enterprise (BMBE)?

a. A BMBE is exempt from the payment of documentary stamp tax.

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a. Property acquired through onerous title using common fund

b. Property acquired through gratuitous transfer

c. Properties owned before marriage

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Compute the allowable vanishing deduction.

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Compute the non-taxable compensation income of Scottie.

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a. Final Assessment Notice

c. Preliminary Assessment Notice

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b. The interest must have been stipulated in an oral or a written contract.

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Which of the following is considered as an exempt transaction for VAT purposes?

a. Lease of a commercial unit with a monthly rental of PhP 15,000

c. Association dues collected by condominium corporations

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Consider the following statements:

1. The power of taxation involves the promulgation of rules.

a. Statements 2 and 4 are both manifestations of taxation being legislative in nature.

b. Statements 1 and 4 are both manifestations of taxation being inherent in nature.

d. Statements 1 and 2 are both manifestations of taxation being legislative in nature.

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