1.

Gross income from within the Philippines of a resident alien subject to final withholding tax at
source
a. Dividend income from a resident foreign corporation
b. Share from the net income after tax of a domestic general partnership in trade
c. Interest income form investment in bonds
d. Gain from sale of capital assets
2. One of the following compensation income of an individual taxpayer is not an exclusion form
gross income
a. Monetized vacation leave not exceeding 10 days a year
b. Separation pay of an employee who resigned from his employment
c. Retirement benefits of an employee who has worked for an employer at least 10 years,
who at the time of retirement is not less than 50 years of age, and who avails of the
retirement for the first time
d. De minimis benefits
3. A substantial under declaration of taxable sales, receipts or income or of substantial
overstatement of deduction shall constitute a presumption of false or fraudulent return. This
presumption is
a. Conclusive
b. Absolute
c. Prima facie
d. Irrevocable
4. Which of the following statements is not correct?
a. Income from a general professional partnership is constructively received by a partner
when his share in the net income is credited to his capital account
b. Income from a taxable partnership is constructively received by a partner in the same
taxable year that the partnership determined its net income after tax
c. Any distribution of dividend made to individual shareholders of a corporation shall be
considered divided and income of the taxpayer subject to final tax in the year received
d. Any distribution of dividend made to corporate shareholders of a corporation shall be
deemed to have been made from the most recently accumulated earnings or surplus
exempt from income tax
5. In which of the following instances may a tax payer include his income as part of gross income
subject to basic tax at his option?
a. When it involves a gain from sale of shares of stock held as capital assets and is not
traded in the stock exchange and the gain does not exceed P100,000
b. When a real property held as capital asset is sold to the government or any of its
political subs division
c. When it involves a gain from sale of shares of stock held as capital assets and its traded
in the stock exchange
d. When the sale invoices a personal property held as capital assets
6. ABC has an authorized capital stock of P5,000,000 dividend into 50,000 shares with a par value
of P100 per share. Of the 25,000 shares subscribed, 13,000 will belong to A because of
 additional subscription of 9,500 shares, and to pay his additional subscription amounting to
P950,000. A transferred to the corporation a parcel of land that he owns, the investigation
conducted by the BIR revealed that A acquired the property for only P500,000. As taxable gain
is
a. P450,000
b. P950,000
c. P500,000
d. P0
7. M married to K. Left the Philippines in the middle of the year on July 1, 2009 to go to USA and
work there as a contract worker for two years. The following income were provided as of
December 31, 2009:
PHILIPPINES USA
January 1 to June 30 P300,000 $10,000
July 1 to December 31 P100,000 $20,000

His net taxable income is (1$=P56)

a. P910,000
b. P350,000
c. P810,000
d. P250,000
8. A created an irrevocable trust in favor of his 2 minor children. The trust provides that 50% of the
net income should be distributed yearly to the children, share and share alike, the balance to
accumulate for eventual distribution to the children at age 25. The net income for 2010 was
P500,000
The taxable income of the trust is
a. P480,000
b. P500,000
c. P230,000
d. P0
9. In 2010, NBC Corporation paid for the annual rental of the residential house used by its general
manager amounting to P136,000. The deductible amount for the rental and tax paid is
a. P100,000
b. P132,000
c. P168,000
d. P200,000
10. The deduction allowed for the payment on health and hospitalization insurance of a qualified
resident citizen during the taxable year amounting to P300.00 a month. For the months from
April to December is
a. P2,700
b. P2,400
c. P1,800
d. P900
11. Acting on the information given by A, the BIR seized and confiscated smuggled goods with a
FMV of P15M. As reward will be subject to a final tax of
a. P1.5M
b. P1M
c. P150,000
d. P100,000
12. A common carrier by land is engaged in the transport of passengers goods and cargoes. As
gross receipts amounted to P3M. 50% of which came from transport of passengers. He is not
VAT registered. What business taxes will A pay?
a. 12% value added tax
b. 3% common carrier tax
c. 3% tax on VAT exempt persons on gross receipts from transport of goods and cargoes
and 3% common carriers tax on gross receipts from transport of passengers
d. 12% VAT on gross receipts from transport of goods and cargoes and 3% common
carriers and 3% on gross receipts from transport of passengers
13. Which of the following shall not be exempt from value added tax?
a. Sales by agricultural cooperatives duly registered with the Cooperative Development
Authority to their members as well as sale of their products, whether in its original state
or processes form, to non-members
b. Gross receipts from lending activities by credit or multi-purpose cooperatives duly
registered with the Cooperative Development Authority whose lending operating is
limited to their members
c. Sales of non-agricultural non electric and non-credit cooperatives duly registered with
the Cooperative Development Authority if the capital contribution of each member does
not exceed P15,000
d. Sales of electric cooperatives duly registered with Cooperative Development Authority
relative to the generation and distribution of electricity
14. Mr. and Mrs. A donated a conjugal agricultural land to their son who is getting married with ten
(10) months after the date of donation. The fair market value at the time of marriages was
P800,000 but its fair value market value at the time of donation was P600,000. The donated
property was subject to P100,000 mortgages which was assumed by the donors. The taxable
net gift of Mr. A is:
a. P240,000
b. P290,000
c. P390,000
d. P340,000
15. Which of the following properties owned by non-resident alien decedent is not subject to the
rule of reciprocity?
a. Shares of stock in a Philippine domestic corporation
b. Investment in stock in a US corporation, 80% of the business of which is in the
Philippines
 c. Investment in bonds in a US corporation that have acquired business situs in the
Philippines
d. 40% share in a Philippine partnership
16. Which of the following accounting concepts best justifies the use of accruals and deferrals?
a. Cost benefit constraint
b. Unit-measure assumption
c. Continuity assumption
d. Materiality constraint
17. On July 1, 2013, Roxy Company obtained finance at an annual premium of 72,000 payable on
July 1 each year. The first premium payments made July 1, 2013. On October 1, 2013, the entity
paid 24,000 for real estate taxes to cover the period ending September 30, 2014. On December
31, 2013, what amount should be reported as prepaid expenses?
a. 60,000
b. 54,000
c. 48,000
d. 36,000
18. Ding Dong Corporation, a domestic corporation now on its 5th year of operation, provided the
following data:

Gross sales P1,100,000

Sales return and allowances P200,000
Cost of goods sold P300,000
Gain on sale of capital asset held for 11 months P10,000
Loss on sale of capital asset held for 20 months P5,000
Royalty Income P20,000
Allowable business expenses P580,000

Income tax due is:

a. P9,625
b. P8,800
c. P7,500
d. P12,000
19. ABC Corporation, a VAT registered enterprise has the following sales for the month:
Sale of private entities P2,000,000
Sale of exempt goods P1,000,000
Sale to the government P1,000,000
Total sales for the month P4,000,000

The following input taxes were passed on by its VAT suppliers:

Input tax on taxable goods 80,000
Input tax on sale of exempt goods 20,000
Input tax on sale to the government 40,000
 Input tax on depreciable capital goods not directly attributable
To any specific activity (monthly amortization for 60 months) 160,000
The VAT due for the month is
a. P80,000
b. P160,000
c. P40,000
d. P0
20. A resident citizen received a prize of P40,000 which of the following statements is correct in
connection with the imposition of final tax on the prize?
a. The first P10,000 is part of taxable income while, the remaining P30,000 is subject to
20% final tax
b. The whole amount is part of taxable income
c. The whole amount of P40,000 shall be subject to 20% final tax
d. The first P10,000 shall be exempt from tax, the remaining P30,000 is subject to 20%
final tax
21. Lito, an official of ABC Corporation, asked for an earlier retirement because he was emigrating to
Canada. He was paid P2M separation pay in recognition of his valuable to the corporation plus
P200,000, 13th month pay. Nelson, another official, was separated for his failing eyesight. He was given
P1M separation pay. Rico was separated for violating company rules but was given P300,000 separation
pay. Ben opted to retire at 55 years old after working for 10 years in the same company. He received
P1M. The total income subject to withholding tax on the above payments is:
a. P2,600,000
b. P2,470,000
c. P3,300,000
d. P2,500,000
22. A sold his residential lot, a capital assets for P2,000,000. The said lot was acquired in 2010 at a cost
of P1,700,000. The fair market value of the property as determined by the BIR is P2,200,000 but the fair
market value as shown in the schedule of values of the city assessors is P1,950,000. The entire proceeds
were authorized for the acquisition of As principal residence. The final tax due is
a. P120,000
b. P132,000
c. P117,000
d. P0
23. Miramars income tax of 2009 was P75,000 as shown in her income tax return (ITR). She filed her
return only on July 15, 2011 and paid the total amount upon filling the return. The total amount
payable, if assuming she filed with the wrong RDO is:
a. P113,750
b. P131,250
c. P108,750
d. P97,500
24. XYZ Corporation filed its income tax return and paid the tax due for calendar year 2008, showing a
tax liability of P175,000. However, upon audit, it was discovered that its income tax return was false or
fraudulent because it did not report other taxable income Per investigation, the correct income tax due
is P350,000, the corporation was duly informed of this finding through a preliminary assessment notice.
Failing to protest on time against he preliminary assessment notice, a formal letter of demand and
assessment notice was issued on May 31, 2010, calling for payment of the deficiency income tax on or
before July 15, 2010. The amount due on July 15, 2011 is
a. P306,250
b. P437,500
c. P240,625
d. P612,500
25. The gross receipts of A, a less or from his residential units for the year, show
Monthly rent/unit No. of units Total
10,000 20 2,400,000
12,000 10 1,440,000
14,000 6 840,000
16,000 10 1,920,000

The output Vat is

a. P792,000
b. P504,000
c. P230,400
d. P518,400

26. Which of the following are elements of impact of taxation?

I. Levy
II. Imposition
III. Assessment
IV. Collection
a. I and II
b. I, II, and III
c. II and IV
d. I, II, III, and IV
st
27. 1 statement the power of taxation must first be expressly granted, either by law or by the
constitution before the state may validity exercise it
2nd statement the Philippine government may subject the land where embassies of foreign
governments are located to real property taxes
a. Both statements are false
b. 1st statement is false while 2nd statement is true
c. 1st statement is true while 2nd statement is false
d. Both statements are true
28. A, a rank and file employee receiving the statutory minimum wage and supporting an illegitimate
child and the following during the taxable year:
a. Salary gross 120,000
 b. Midyear bonus 10,000
th
c. 13 month pay 10,000
d. Christmas bonus 10,000
e. Overtime pay 10,000
f. Fringe benefits (paid in cash)
a. Rice subsidy 18,000
b. Actual and clothing benefits 4,000
c. Actual medical benefits 10,000
d. Christmas cash gift 5,000
e. Achievement award (10 years service) 10,000
f. Monetized unused leave credits (10 days) 5,000
g. Deductions made by the employer:
a. SSS premiums contributions 2,000
b. Philhealth premiums contributions 1,800
c. Pag-ibig premiums contributions 1,200
d. SSS loan 3,600
e. Pag-ibig loan 2,400
f. Premiums on health and hospitalization insurance 2,000
The net taxable income of A is
a. P0
b. P38,000
c. P48,000
d. P58,000
29.