1.
Items of gross income subject to regular income tax and capital gains tax are reportable to the
government
True
2. Rent is a passive income but is not subject to final tax.
True
3. The interest income from bonds issued by banks is subject to final tax.
False
4. Gains from dealings in capital assets are generally subject to the regular income tax.
True
5. The gross income from operations enjoying a tax holiday are included in gross income subject to
regular tax, but are presented as deductions in the income tax.
False
6. The share in a business partnership is subject to final tax, but the share in a general professional
partnership is subject to regular income tax.
True
7. Gains from dealings in ordinary assets are subject to regular income tax.
True
8. Items of passive royalty income are subject to final income tax while items of active royalty
income are subject to regular income tax.
True
9. Compensation income is an inclusion in gross income subject to regular income tax except
compensation income of special aliens.
True
10. The reportable gross income from business or the exercise of a profession is net of the cost of
goods sold or cost of services.
True
11. Rank and file employees may be subject to fringe benefit tax
False
12. Fringe benefits are always subject to fringe benefit tax
False
13. The personal expenses of employees shouldered by the employer are fringe benefits.
True
14. Managerial or supervisory employees are subject to fringe benefits tax
True
15. The tax base of the fringe benefit tax is the grossed-up monetary of the fringe benefit.
True
16. The fringe benefit tax is a creditable withholding tax presumed to have been withheld at source
by the employer from the fringe benefits of supervisory and managerial employees.
False
17. The taxable fringe benefit subject to the fringe benefit tax is the excess of the de minimis
benefits over P90,000.
False
18. Half of the benefits that are necessary to the trade of the employer’s business are subject to
fringe benefits tax.
False
19. Benefits in the form of properties transferred to the name of the employee are subject to fringe
benefit tax in full.
True
20. Benefits provided by the employer for his convenience are exempt from fringe benefits tax.
True
21. Mr. Cords owns 20% interest in a joint venture engaged in construction projects. In 2015, the
joint venture reported profits of P500,000, inclusive of P20,000 from time deposits. Compute
the total income to be reported in gross income of Mr. Cords.
*a. P0
b. P4,000
c. 96,000
d. P100,000
22. Mr. Buan, with 14 dependent children, had the following data for his income tax return in 2018:
Sales P490,000; Gross Compensation Income 120,000; Cost of Sales 200,000; Non-taxable
compensation income 30,000; Administrative and selling 120,000; Personal expenses 70,000.
Compute the taxable compensation income.
a. P150,000
b. P30,000
c. P90,000
*d. P120,000
23. Mr. Buan, with 14 dependent children, had the following data for his income tax return in 2018:
Sales P490,000; Gross Compensation Income 120,000; Cost of Sales 200,000; Non-taxable
compensation income 30,000; Administrative and selling 120,000; Personal expenses 70,000.
Compute the taxable compensation income.
a. P150,000
b. P30,000
c. P90,000
*d. P120,000
24. Which is not part of de minimis benefits?
a. Clothing allowance
b. Actual medical benefits
c. Monetized unused vacation leave
*d. 13th month pay
25. The de minimis benefits not exceeding their thresholds are
*a. Exempt from Fringe benefit tax
b. Subject to Fringe benefit tax
c. Subject to regular tax
d. Deductions from gross income
26. Select the answer which more accurately completes the statement. The taxable fringe benefit of
a supervisory employee is
*a. Subject to fringe benefit tax
b. subject to regular income tax as compensation income
c. the total of 13th month pay and other benefit not exceeding P90,000
d. the total of 13th month pay and other benefits exceeding P90,000
27. Who is subject to the fringe benefit tax?
a. An employer of rank and file
*b. Managerial or Supervisory employee
c. An employer of managerial or supervisory employees
d. Rank and file employees
28. Which of these items is subject to fringe benefit tax?
a. Compensation income of rank and file employees.
b. Fringe benefit of rank and file employees
*c. Fringe benefit of managerial of managerial or supervisory employees
d. Compensation income of managerial or supervisory employees
29. The fringe benefit tax by nature is a
a. Tax on passive income expense of the employer
*b. Final tax
c. tax to the employer of managerial or supervisory employee
d. tax to all employee on their fringe benefits
30. Which is a correct statement?
a. The fringe benefit tax is a tax upon the expense of the employer.
b. The personal expenses of any employees paid by the employer are subject to fringe benefit
tax.
c. The personal expenses of rank and file employees paid by the employer are subject to fringe
benefit tax.
*d. The personal expenses of managerial or supervisory employee shouldered by the employer
are subject to fringe benefit tax.
