1.

ABC Learning Institute, an educational non-profit institution provided the following data for 2019
taxable year: P3,500,000 Income from tuition fees P1,500,000 School miscellaneous fees P2,000,000
Dividend income from domestic corporation P2,000,000 Dividend income from resident foreign
corporation P2,000,000 Rent income P4,000,000 Operating expenses The income tax payable of the
school in 2019 was:

(2 Points)

P 1,750,000

P 1,650,000

P 500,000

P 400,000 P 400,000 400000400000

2.First Statement: The employer of senior citizens can claim additional deductions equivalent to 25% of

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the compensation paid to senior citizens who have income above the poverty line. Second Statement:

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Persons with disability are mandatorily allowed a discount of 20% from certain establishments

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(1 Point)
Both statements are true.

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Both statements are false. rs e
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First Statement is true and Second Statement is false

First Statement is false and Second Statement is true FALSE TRUEFALSE TRUE
o
aC s

3.A retailer of goods, whose accounting method is under the accrual basis, has for taxable year 2020
vi y re

gross sales of P1,000,000 and cost of sales amounting to P800,000. How much is the OSD if the taxpayer
is an Individual / a corporation:

(2 Points)
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P 400,000 ; P 400,000
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P 400,000 ; P 80,000 P 400,000 ; P 80,000 P 400,000 ; P 80,000

P 100,000 ; P 80,000
is

P 80,000 ; P 80,000
Th

4.ABC, a domestic corporation had the following data: 2018: P2,000,000 Gross income; P100,000 Taxable
Income 2019: P1,500,000 Gross income; P250,000 Taxable Income How much is the income tax due for
the taxable year 2019 if the corporation is a proprietary educational institution?
sh

(2 Points)

P 75,000

P 25,000 P 25,000

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 P 30,000

P 40,000

5.A partnership of lawyers renders 500 hours of pro bono legal assistance to indigent litigants. The 500
hours do not include the 60 hours mandatory legal aid required by Supreme Court. The partnership
charges P10,000 per hour to paying clients. The partnership's gross income during the year amounts to
P80,000,000. How much is the allowable special deduction that the firm can deduct from its gross
professional fees?(2 Points)

P 26,000,000

P 16,500,000

P 6,000,000

P 500,000

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6.First Statement: Local water districts are exempt from income tax. Second Statement: Gross Philippine

er as
Billings of international carriers includes receipts from outgoing voyage or flights which must be billed in

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the Philippines.Required to answer. Single choice.

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o.
(1 Point)

Both statements are true. rs e

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Both statements are false.

First Statement is true and Second Statement is false

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First Statement is false and Second Statement is true

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7.The following corporate taxpayers are allowed to claim OSD, except:Required to answer. Single choice.

(1 Point)
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Proprietary educational institution

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Domestic corporation

Resident foreign corporation

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Non-resident foreign corporation

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8.The optional standard deduction for individuals is

(1 Point)
sh

10% of the gross income

10% of the gross sales/receipts

40% of the gross income

40% of the gross sales/receipts

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 9.First Statement: If the gross income from unrelated activity exceeds 50% of the total gross income
derived by any private educational institution, the normal corporate income tax rate shall be applied on
the entire taxable income. Second Statement: The profit remittance tax is fifteen percent (15%) final tax
of the amount of profit for remittance, as applied for with the bank.

(1 Point)

Both statements are true.

Both statements are false.

First Statement is true and Second Statement is false

First Statement is false and Second Statement is truefalse/true

10.Which of the following is not subject to tax as a separate income taxpayers?

(1 Point)

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Estates under judicial settlement

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Irrevocable trust

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Unregistered partnerships

Revocable trust rs e
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11.The optional standard deduction for corporations is
o

(1 Point)
aC s

10% of the gross income

vi y re

10% of the gross sales/receipts

40% of the gross income

ed d

40% of the gross sales/receipts

ar stu

12.Which of the following shall be considered related income of proprietary educational institutions? I.
Income from tuition fees and miscellaneous school fees II. Income from hospital where medical
graduates are trained for residency III. Income from canteen situated within the school campus IV.
is

Income from bookstore situated within the school campus

Th

(1 Point)

I only
sh

I and II only

I, II, and IV only

I, II, III and IVSAME

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 13.ABC Company is an International Shipping Carrier doing business in the Philippines. Its tax base for
income tax purposes is

(1 Point)

Gross Philippine Billings

Gross Philippine Billings minus deductible expenses

Regular rates of 30% of its net taxable income

Allocation of income from sources within and without the Philippines, as well as expense.

14.First Statement: A non-resident cinematographic film owner, lessor, or distributor is subject to 25%
tax on taxable income. Second Statement: A government school is not exempt from income tax

(1 Point)

Both statements are true.

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Both statements are false.

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First Statement is true and Second Statement is false TRUE FALSE

o.
First Statement is false and Second Statement is true
rs e
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15.First Statement: The transfer to the reserve fund of insurance companies is a special deduction.
Second Statement: An adopting private entity of a private school is entitled to a deduction incentive
equivalent to fifty percent (50%) of the amount donated to the private school
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(1 Point)
aC s
vi y re

Both statements are true.TRUE TRUE

Both statements are false.

ed d

First Statement is true and Second Statement is false

ar stu

First Statement is false and Second Statement is true

16.The ABC Corporation provided the following data for calendar year ended December 31, 2020
($1=P50) Philippines: P4,000,000 Gross income; P2,500,000 Deductions USA: $40,000 Gross income;
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P15,000 Deductions; P$3,000 Income Tax Paid If it is a non-resident cinematographic film owner/lessor,
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its income tax is:

(2 Points)
sh

P 1,000,000

P 100,000

P 300,000

P 128,000

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 17.One of the following statements is correct. A choice by an individual of the optional standard
deduction means that:

(1 Point)

His income tax return need not be accompanied by financial statements

He need not keep books of accounts.

He need not have records of gross sales or gross receipts.

His choice can still be changed by filing an amended return.

18.ABC Corp has a soft spot for senior citizens and PWDs. As such, it hires senior citizens and PWDs to
word in the company for at least six (6) months. The following data are provided by ABC Corp: P
15,000,000 Gross sales P 5,000,000 Cost of sales P 3,000,000 Operating expenses (including salaries of
P500,000 given to senior citizens and P200,000 given to PWDs) How much is the special itemized
deductions allowed in connection with the salary of senior citizen employees and PWDs?

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(2 Points)

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P 26,000,000

o.
P 16,500,000
rs e
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P 6,000,000

P 500,000
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19.The gross sales of ABC Corporation for 2018 amounted to P6,000,000, with cost of sales amounting to
aC s

P4,000,000. It incurred. operating expenses amounting to P1,000,000, and on the filing of its First
vi y re

Quarter Income Tax Return, it signified its intention to avail of the OSD. How much is the OSD, if any

(1 Point)
ed d

P0
ar stu

P 2,400,000

P 800,000 800000800k
is

P 480,000
Th

20.ABC Corp, a domestic corporation, adopted Tarlac State University, a school operated by the
government and accredited by CHED. It entered into a Memorandum of Agreement (MOA) with the
provincial school and CHED. ABC Corp provided the following assistance: P 500,000 Cash to improve
school facilities P 500,000 Computers (acquisition cost) The following data were taken from the books of
sh

Rosales Corporation for the current year: P 10,000,000 Gross income P 3,000,000 Operating expenses
(excluding the assistance) How much is the amount deductible by ABC Corp as far as the assistance to
public school is concerned?

(2 Points)

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 P 26,000,000

P 16,500,000

P 6,000,000

P 500,000

21.A domestic corporation had the following cumulative data in 2020: 1st Quarter: P400,000 Gross
income; P200,000 Expenses and Losses 2nd Quarter: P800,000 Gross income; P420,000 Expenses and
Losses 3rd Quarter: P1,000,000 Gross income; P600,000 Expenses and Losses Year: P1,200,000 Gross
income; P720,000 Expenses and Losses How much is the 2nd Quarter taxable income if the corporation
chose the Optional Standard Deduction?

(2 Points)

P 380,000

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P 480,000 P 480,000

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P 240,000

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P 180,000

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rs e
22.The ABC Corporation provided the following data for calendar year ended December 31, 2020
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($1=P50) Philippines: P4,000,000 Gross income; P2,500,000 Deductions USA: $40,000 Gross income;
P15,000 Deductions; P$3,000 Income Tax Paid If it is a resident international carrier, assuming the gross
income from the Philippines is the gross Philippine billing, its income tax is:
o

(2 Points)
aC s
vi y re

P 100,000

P 10,000
ed d

P 37,000
ar stu

P 125,000

23.The following income taxpayers are allowed to claim Optional Standard Deduction (OSD) under RA
9504 in lieu of the itemized deductions, except:
is

(1 Point)
Th

Domestic corporation

Resident foreign corporation

sh

General professional partnership

Non-resident foreign corporation

24.The optional standard deduction is forty percent (40%) of the gross income for corporations. For
purposes of the optional standard deduction gross income means:

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 (1 Point)

If a trading concern, gross profit from sales.

If a service concern, gross receipts less direct cost of services

Gross profit from sales, or gross receipts or revenues less direct cost of services, plus all other items of
gross income.Same metoo

Includes the net capital gain of an individual.

25.A resident international carrier has the following data for the current year: Philippines: P700,000
Gross income; P200,000 Expenses Hongkong: P500,000 Gross income; P100,000 Expenses How much is
the tax payable of the corporation?

(2 Points)

P 288,000

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P 17,500

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P 160,000

o.
P 30,000

rs e
26.A proprietary educational institution, in its third year of operations, had the following income and
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expenses in 2020: P 5,000,000 Gross Income, Tuition P 1,900,000 Rent Income, net of 5% withholding tax
P 4,500,000 Operating Expenses Applying the predominance test, the percentage of unrelated income is:
o

(2 Points)
aC s
vi y re

27.54%

79.17%

71.43%
ed d
ar stu

28.57%

27.The ABC Corporation provided the following data for calendar year ended December 31, 2020
($1=P50) Philippines: P4,000,000 Gross income; P2,500,000 Deductions USA: $40,000 Gross income;
is

P15,000 Deductions; P$3,000 Income Tax Paid If it is a resident foreign corporation and it remitted 60%
of its net profit to its head office abroad, its total tax liability is:
Th

(2 Points)

P 480,000
sh

P 571,800

P 544,500

P 612,750

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 28.An employer paid a total of P800,000 productivity incentive bonus to its production workers. What is
the additional productivity incentive bonus expense?

(2 Points)

P0

P 80,000

P 400,000

P 200,000

29.For purposes of income taxation, which of the following is not considered as corporation?

(1 Point)

General professional partnership

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Business partnership

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Unregistered partnership

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Joint stock companies

o.
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30.First Statement: The expenses incurred in complying with the rooming-in and breastfeeding practices,
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under the Expanded Breastfeeding Promotion Act, shall be deductible expense up to twice the actual
amount incurred for income tax purposes. Second Statement: Lawyers are entitled to the value of their
pro-bono services to indigent clients as a deduction from gross income but only to a maximum value of
o

10% of their should be gross income from all clients (paying and pro-bono).
aC s
vi y re

(1 Point)

Both statements are true.

Both statements are false.

ed d
ar stu

First Statement is true and Second Statement is false (NOT SURE)

First Statement is false and Second Statement is true

31.First Statement: Taxpayers who installed improvements in their facilities to accommodate persons
is

with disability are allowed an additional 15% deduction incentive based on based on the total actual cost
Th

of improvements. Second Statement: The transfers to all reserve fund of cooperatives including
mandatory and optional funds are deductible from the gross income of the cooperatives.

(1 Point)
sh

Both statements are true.

Both statements are false.

First Statement is true and Second Statement is false

First Statement is false and Second Statement is true

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 32.One of the general principles of income taxation:

(1 Point)

A foreign corporation engaged in business in the Philippines is taxable on all income derived from
sources within and without the Philippines.

A foreign corporation engaged in business in the Philippines is taxable on all income derived from
sources within the Philippines only

A domestic corporation is taxable on income derived from sources within the Philippines only.

A domestic corporation is taxable on income derived from sources without the Philippines only.

33.Non-resident lessors of aircraft, machineries and other equipment are taxed on gross rentals, charter
and other fees at

(1 Point)

m
er as
2.50%

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4.50%

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7.50% 7.507.5

10.00% rs e
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o
aC s
vi y re
ed d
ar stu
is
Th
sh

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