Tax1 FINAL EXAM REVIEWER

1. Which of the following sales by VAT-Registered persons shall be subject to 10%?

a. Export sales made directly by VAT-registered persons
b. Sales to persons whose exemption effectively subjects sales to zero rate
c. Both a and b
d. Neither a nor b
2. They are enforcing proportional contributions form persons and levied by the law-
making body of the state for the support of the government and all public needs.
a. Taxes
b. Money
c. Bribes
d. Property
3. Tax application to certain specified goods or article manufacture or produced in the
Philippines for domestic sale or consumption, or for any other disposition and to do
things imported into the Philippines.
a. Income tax
b. Excise tax
c. Percentage tax
d. VAT
4. When Tax is of a fixed proportion of the value of property with respect to which the tax is
assessed.
a. Ad Valorem
b. Specific
c. Indirect
d. Direct

5. The similarities between the power of taxation, Eminent Domain and police power
a. All of the choices
b. All rest upon necessity
c. All exist independently of the constitution
d. All legislative in nature and character
6. Which of the following films are not subject to tax?
a. All of the choices
b. Films banned from public distribution by the board of censors
c. Reversal films used is amateur photography of 16mm or less
d. Films on sex education
7. How much would be the total personal exemptions of MS. Kris Moran, single, supporting a
sister niece, 5 years old and a cousin 18years old; all living with her?
a. P27,00 as head of the family
b. P36,000 as head of the family
 c. P12,000 as head of the family
d. None of the choices
8. In the classification of income taxpayers, under which condition can one be consider a non-
a. All of the choices
b. Not residing in the country but engaged in business
c. Residing in the country but not engaged in business
d. Residing in the country and engaged in business
9. What will happen to the input tax if the taxpayer is engaged in different type of business
and the tax cannot be directly attribute to any business?
a. No cash payment is required
b. He should file a debit memo
c. He should register each business separately
d. It shall be apportioned between taxable and exempt operation
10. Consideration for the use of a road, bridge, etc. collected by private individual or
government.
a. Toll
b. License
c. All of the choices
d. penalty
11. The purpose of the requirement for keeping books of accounts and other records.
a. In order to lower the tax due
b. In order that all taxes due may be readily and ascertained and determined anytime of
the year
c. Both a and b
d. Neither a nor b
12. Joseph is an Operator of 2 passenger jeepneys in Bacolod city. For the first quarter of 1997,
he received the following: jeep A = P5, 00 and Jeep B = P6, 000. How much is his common
carrier tax due?
a. P1150.00
b. P345.00
c. P575.00
d. P805.00

13. The power of taxation that can only be exercised by the law –making, body , not by the
executive or judicial branch except when delegated by the national legislative body to a
local legislative body, subject of limitations as maybe provided by law.
a. Inherent in sovereignty
b. None of the choices
c. Constitutional and inherent limitations
d. legislative
14. which of the following statement is true?
 a. The income of a non-profit, non-stock education institution, used actually, directly and
exclusively for educational purposes is exempt from income tax.
b. A Filipino citizen working and earning a living in Saudi Arabia is exempt from Philippines
income tax.
c. Equality in taxation can be attained by imposing the same rate of tax on all taxpayers.
d. All of the choices
15. Which of the following are remedies of a taxpayer where the tax has been paid?
a. Filling of claim for tax refund
b. Filing of claim for tax credit
c. Both a and b
d. Neither a nor b
16. The point at which the tax is originally imposed.
a. Impact of taxation
b. All of the choices
c. Suites of taxation
d. Incidence of taxation
17. In computing the income tax of a non-resident alien not engaged in business in the
Philippines, his gross from with the country his passive income is multiplied by what
percent?
a. 10%
b. 20%
c. 40%
d. 30%
18. The excise tax for sparkling wines regardless of proof is P26.00 whilestill wine containing
more than 14% 0f alcohol by volume is
a. P8.00
b. P7.00
c. P9.00
d. P6.00
19. What is the percentage tax for an automobile with an engine displacement of up to 1600 in
gasoline and up to 1800 in diesel?
a. 35%
b. 100%
c. 15%
d. 50%
20. Power of the state to take private property for public use upon payment of just
compensation.
a. All of the choices
b. Police power
c. Power of taxation
d. Power of eminent domain
21. Which of the following statement is true regarding percentage tax?
a. It is measured by certain percentage of the goods based on their manufacture,
b. It is based on a given ratio between the gross sales and the burden imposed upon the
taxpayer
c. Both a and b
d. Neither a nor b
22. It is a legal claim or charge on property either real or personal established by law as a
security in default of payment of taxes.
a. levy
b. Distrait
c. Forfeiture
d. Tax lien
23. Which of the following statement is true regarding estate tax?
a. As to time of transmission of property; it should be done upon the death of the
decedent
b. Rates are higher than that of donors tax rates
c. Both a and b
d. Neither a nor b
24. Which of the following statement is correct when it comes to married person?
a. They should file only one consolidated return to cover the income of both
b. All of the choices
c. They should file separately in order to lessen the tax burden
d. They are exempt from payment of tax
25. The kinds of deductions allowed to be subtracted form gross income to arrive at the
taxable income
a. Itemized deductions under the tax code
b. Special deduction
c. Optional standard deduction
d. All of the choices
26. The principle methods of accounting expressly recognized by the tax code and the BIR
regulations.
a. Hybrid method
b. Accrual basis
c. All of the choices
d. Cash basic
27. An individual whose gross income does not exceed his total personal and additional
exceptions for dept.
a. Is required to increase his income pursuant to other provisions of the tax code
b. Need not file an income tax return
c. None of the choices
d. Will file and pay the corresponding tax due
28. If an alcohol product is produced from sap of nipa, coconut, cassava, camote or buri palm or
from the juice, syrup or sugar of the cane, how much excise tax is charges per liter?
a. P5.00/Proof liter
b. P10.00/proof liter
c. P4.00/proof liter
d. P6.00/proof liter
29. Which of the following id true with regards to gross income?
a. Compensation income & business income
b. It refers to all income from wherever source derived during a taxable year.
c. Royalties, annuities, prizes and winnings
d. All of the choices
30. It is percentage tax imposed at every stage of the distribution Proses on the sale, barter, or
exchange and similar transactions as sale, importation of goods, or sale of services, based
on the gross selling price.
a. VAT
b. Excise tax
c. Sales tax
d. None of the choices
31. Which of the following statement is incorrect with regards to tax law?
a. When the taxpayer acted in bad faith, modification of BIR rules shall be given retroactive
effect.
b. Taxes must be given reasonable interpretation consistent of purpose and intent
c. In case of doubt, tax laws must be literally construed in favor of the taxpayer and
against the government
d. Tax laws are not political in nature.
32. Which of the following donations is required gift taxes?
a. Wife donates P10,000 to her manicurist as a birthday gift
b. Wife donates P25,00 to mother during Christmas
c. Husband & wife donate P50,,00 to daughter as a graduation gift
d. Husband donates P100,000 to son on account of his marriage
33. It is the seizure by the government of personal property, tangible or intangible,to enforce
the payment of taxes to be followed by its public sale if the taxes are not voluntary paid.
a. Assessment
b. Distraint
c. Forteiture
d. levy
34. Which of the following is an important feature of the VAT?
a. A VAT- registered person in entitled to credit input tax payable
b. All of the choices
c. Filing of returns and payment of the tax shall made monthly and directly to duly
accredited banks
 d. All person liable to the VAT shall register with the appropriate Revenue District Officer.

35. Which of the following is not taxable?

a. Gain on sale of shares of stock to a sister
b. Cost of living allowance received by an employer
c. Recovery of damaged property
d. Gifts received from an aunt worth P60,000.00
36. The kinds of privilege taxes on business
a. Excise tax & other percentage taxes
b. All of the above
c. Documentary stamp taxes
d. Value-added taxes
37. These are taxes imposed on gratuitous transfer of properties from the decedent to his heirs,
or from the donate the done
a. Transfer tax
b. Income tax
c. National tax
d. Ad valorem tax
38. Which among the following may use the installment method?
a. Those who make a sale on cash basis
b. Those who do not dispose properties
c. All of the choices
d. Those who regularly sell or dispose property on the installment plan
39. An income received or earned but is not taxable as income because it is exempted by law or
by treaty.
a. Honorarium
b. Exclusions
c. All of the choices
d. Bonus
40. Which of the following is exempt from percentage taxes?
a. Sales of liquor
b. Messages transmitted by any embassy and consular offices of a foreign government
c. All of the choices
d. Sales of cigarettes
41. When should a donor’s tax be filed?
a. Not later than 30 days from date of donation
b. Not later than 180 days from date of death
c. Not later than 30 days from date of death
d. Not later than 180 days from date of donation
42. How much is the specific tax due for sober liquor shop which imported 10,000 cases of
sparkling wine with each case containing 12 bottles of 1 liter per bottle?
a. P3,320,000.00
b. P3,220,000.00
c. P3,120,000.00
d. P3,330,000.00
43. Cockpits, cabarets, day and night clubs
a. 25% on gross tax receipts
b. 18% on gross tax receipts
c. 20% on gross receipts
d. 14% on gross tax receipts
44. Which of the following is not deductible?
a. All of the choices
b. Contributions given directly to typhoon victims
c. Losses on gambling
d. Damages to residential house on account of an earthquake
45. One of these in not an essential characteristics of tax, which is it?
a. It is an enforce contribution
b. It is usually base on ability to pay
c. It is levied for public purposes
d. It is a nuisance to people