Bukidnon State University

IncomeTaxation
Final Examination

SET A KEY ANSWER

A. Select a word from the box that the statement below best describes it.

Interest Income Retirement pay Annuities Capital Business

Pension Profession Scrip dividend Royalty income Prize
Overtime pay Salary Embezzled funds Passive Income Cash method
Accrual method Hazard pay Capital Gain Trust fund Commission
Deposit substitute Honoraria Cost of goods sold Dividend income Rental Income

1. Funds are income without consent with an obligation to repay. Embezzled funds
2. Are installment payments received for life insurance sold by insurance companies. Annuities
3. Is a reward for a contest or a competition which represents renumeration for an effort reflecting one’s superiority. Prize
4. Is issued in the form of promissory note and is taxable to the extent of its market value. Scrip dividend
5 Is a form of earnings derived from the distribution made by a corporation out of its earnings or profits and payable to its stockholders,
whether in money or in other property. Dividend income
6. Is a payment or portion of proceeds paid to the owner of a right, such as an oil right or a patent for the use of it. Royalty income
7. Is an earning derived from depositing or lending of money, goods, or credits. Interest Income
8. Is a debt instrument issued by the bank to borrow money from the public other than from the client’s deposit. Deposit substitute
9. Is any estate,especially stock, securities, or money which is held in trust by a person in behalf of another person. Trust fund
10. Refers to earnings derived from leasing real estate as well as personal property. Rental Income
11. Refers to the invoice cost of the goods sold, plus import duties and freight incurred in transporting the goods to the place where they
are actually sold. Cost of goods sold
12. Is primarily any endeavor or work requiring specialized training in the field of learning, art, or science engaged in as a means of
livelihood or profit of an individual or group of individuals. Profession
13. Any commercial activity engaged in as a means of livelihood or profit of an individual or group of individuals. Business
14. This refers to premium payment received for working beyond regular hours of work which is included in the computation of gross
salary of employee. Overtime pay
15. This is a stated allowance paid regularly to aperson on his retirement or to his dependents on his death, in consideration of past
services, meritorious work, age ,loss, or injury. Pension
16. It refers to a lump sum payment received by an employee who has served a company for a considerable period of time and has
decided to withdraw from work into privacy. Retirement pay
17. This is an additional payment received due to workers exposure to danger or harm while working. Hazard pay
18. Is usually a percentage of total sales or on certain quota of sales volume attained as part of incentive. Commission
19. Are payments given in recognition for services performed for which established practice discourages charging aa fixed fee.
Honoraria
20. Refers to earnings received periodically for a regular work other than manual labor. Salary
21. Generally reports income when earned and reports expense when incurred. Accrual method
22. Generally reports income upon cash collection and reports expenses upon payment. Cash method
23. An income derived from sale of assets not used in trade or business. Capital Gain
24. An income in which the taxpayer merely waits for the amount to come in. Passive Income
25. It denotes the original investment or fund used in order to generate earnings. Capital

B. Multiple Choice. Write the letter of your choice that contains the best answer.

1. 1. Which of the following nature of laws describes tax laws?

b. remedial b. political c. criminal d. civil
2. The following restrictions are inherent on the exercise of taxation power, except
b. Rule of uniformity b. for public purposes c. territorial jurisdiction d. international comity
3 Tax affects the area or nation as a community rather than as individuals. This is a specific explanation of
b. International comity b. public purpose c. supreme power d. reciprocity
4. Which of the following tax escape is permissible under Tax Code?
b. Tax avoidance b. Tax evasion c. Tax dodging d. Overstatement of expenses
5. It is achieved through the passage of tax law that defines the tax system of a nation.
b. Tax legislation b. Tax Administration c. Tax policy d. Tax assessment
6. A fundamental rule in taxation is that the property of one country may not be taxed by another. This is known as
b. International law b. International comity c. Reciprocity d. International inhibition
7. The following are business taxes except
b. Value-added tax b. Percentage tax c. excise tax d. custom duties
8. Which of the following tax rates behaves in the same direction with the taxable value
a. Proportionate b. progressive c. regressive d. digressive
9. All of the following are National taxes as to collecting authority except
a. Income tax b. real property tax c. estate tax d. value-added tax
10. It is a scheme of reducing payment of taxes through legally permissible means
a. Tax evasion b. tax avoidance c. tax remission d. tax amnesty
11. This refers to the process of taxation to determine the amount of tax based on existing tax law
a. Levying b. Imposition c. Assessment d. collection
12. Which of the following defines the country’s tax policy?
a. Philippine constitution b. National Internal revenue law c. Pari Materia Principle d. Tax transformation
13. Taxation co-exist with four elements of the state which includes all except
a. Government b. property c. sovereignty d. territory
14. All of the following are administrative functions of taxation except
a. Selection of object of tax b. valuation of property for taxation c. equalization of assessment d. collection of taxes
15. All of the following are not taxes except
a. Surcharge b. special assessment c. custom duties d. license fee
 Bukidnon State University
IncomeTaxation
Final Examination

SET B

A. Select a word from the box that the statement below best describes it.

Interest Income Retirement pay Annuities Capital Business

Pension Profession Scrip dividend Royalty income Prize
Overtime pay Salary Embezzled funds Passive Income Cash method
Accrual method Hazard pay Capital Gain Trust fund Commission
Deposit substitute Honoraria Cost of goods sold Dividend income Rental Income
1. Generally reports income when earned and reports expense when incurred.
2. Generally reports income upon cash collection and reports expenses upon payment.
3. An income derived from sale of assets not used in trade or business.
4. An income in which the taxpayer merely waits for the amount to come in.
5. It denotes the original investment or fund used in order to generate earnings.
6. Refers to the invoice cost of the goods sold, plus import duties and freight incurred in transporting the goods to the place where they
are actually sold.
7. Is primarily any endeavor or work requiring specialized training in the field of learning, art, or science engaged in as a means of
livelihood or profit of an individual or group of individuals.
8. Any commercial activity engaged in as a means of livelihood or profit of an individual or group of individuals.
9. This refers to premium payment received for working beyond regular hours of work which is included in the computation of gross
salary of employee.
10. This is a stated allowance paid regularly to a person on his retirement or to his dependents on his death, in consideration of past
services, meritorious work, age ,loss, or injury.
11. Is a payment or portion of proceeds paid to the owner of a right, such as an oil right or a patent for the use of it.
12. Is an earning derived from depositing or lending of money, goods, or credits.
13. Is a debt instrument issued by the bank to borrow money from the public other than from the client’s deposit.
14. Is any estate,especially stock, securities, or money which is held in trust by a person in behalf of another person.
15. Refers to earnings derived from leasing real estate as well as personal property.
16. It refers to a lump sum payment received by an employee who has served a company for a considerable period of time and has
decided to withdraw from work into privacy.
17. This is an additional payment received due to workers exposure to danger or harm while working.
18. Is usually a percentage of total sales or on certain quota of sales volume attained as part of incentive.
19. Are payments given in recognition for services performed for which established practice discourages charging a fixed fee.
20. Refers to earnings received periodically for a regular work other than manual labor.
21. Funds are income without consent with an obligation to repay.
22. Are installment payments received for life insurance sold by insurance companies.
23. Is a reward for a contest or a competition which represents renumeration for an effort reflecting one’s superiority.
24. Is issued in the form of promissory note and is taxable to the extent of its market value.
25 Is a form of earnings derived from the distribution made by a corporation out of its earnings or profits and payable to its
stockholders, whether in money or in other property.

B. Multiple Choice. Write the letter of your choice that contains the best answer.
1. 1. Which of the following nature of laws describes tax laws?
c. remedial b. political c. criminal d. civil
2. The following restrictions are inherent on the exercise of taxation power, except
c. Rule of uniformity b. for public purposes c. territorial jurisdiction d. international comity
3 Tax affects the area or nation as a community rather than as individuals. This is a specific explanation of
c. International comity b. public purpose c. supreme power d. reciprocity
4. Which of the following tax escape is permissible under Tax Code?
c. Tax avoidance b. Tax evasion c. Tax dodging d. Overstatement of expenses
5. It is achieved through the passage of tax law that defines the tax system of a nation.
c. Tax legislation b. Tax Administration c. Tax policy d. Tax assessment
6. A fundamental rule in taxation is that the property of one country may not be taxed by another. This is known as
c. International law b. International comity c. Reciprocity d. International inhibition
7. The following are business taxes except
c. Value-added tax b. Percentage tax c. excise tax d. custom duties
8. Which of the following tax rates behaves in the same direction with the taxable value
a. Proportionate b. progressive c. regressive d. digressive
9. All of the following are National taxes as to collecting authority except
a. Income tax b. real property tax c. estate tax d. value-added tax
10. It is a scheme of reducing payment of taxes through legally permissible means
a. Tax evasion b. tax avoidance c. tax remission d. tax amnesty
11. This refers to the process of taxation to determine the amount of tax based on existing tax law
a. Levying b. Imposition c. Assessment d. collection
12. Which of the following defines the country’s tax policy?
a. Philippine constitution b. National Internal revenue law c. Pari Materia Principle d. Tax transformation
13. Taxation co-exist with four elements of the state which includes all except
a. Government b. property c. sovereignty d. territory
14. All of the following are administrative functions of taxation except
a. Selection of object of tax b. valuation of property for taxation c. equalization of assessment d. collection of taxes
15. All of the following are not taxes except
a. Surcharge b. special assessment c. custom duties d. license fee
 Bukidnon State University
IncomeTaxation
Final Examination

SET B KEY ANSWER

A. Select a word from the box that the statement below best describes it.

Interest Income Retirement pay Annuities Capital Business

Pension Profession Scrip dividend Royalty income Prize
Overtime pay Salary Embezzled funds Passive Income Cash method
Accrual method Hazard pay Capital Gain Trust fund Commission
Deposit substitute Honoraria Cost of goods sold Dividend income Rental Income
1. Generally reports income when earned and reports expense when incurred. Accrual method
2. Generally reports income upon cash collection and reports expenses upon payment. Cash method
3. An income derived from sale of assets not used in trade or business. Capital Gain
4. An income in which the taxpayer merely waits for the amount to come in. Passive Income
5. It denotes the original investment or fund used in order to generate earnings. Capital
6. Refers to the invoice cost of the goods sold, plus import duties and freight incurred in transporting the goods to the place where they
are actually sold. Cost of goods sold
7. Is primarily any endeavor or work requiring specialized training in the field of learning, art, or science engaged in as a means of
livelihood or profit of an individual or group of individuals. Profession
8. Any commercial activity engaged in as a means of livelihood or profit of an individual or group of individuals. Business
9. This refers to premium payment received for working beyond regular hours of work which is included in the computation of gross
salary of employee. Overtime pay
10. This is a stated allowance paid regularly to aperson on his retirement or to his dependents on his death, in consideration of past
services, meritorious work, age ,loss, or injury. Pension
11. Is a payment or portion of proceeds paid to the owner of a right, such as an oil right or a patent for the use of it. Royalty income
12. Is an earning derived from depositing or lending of money, goods, or credits. Interest Income
13. Is a debt instrument issued by the bank to borrow money from the public other than from the client’s deposit. Deposit substitute
14. Is any estate,especially stock, securities, or money which is held in trust by a person in behalf of another person. Trust fund
15. Refers to earnings derived from leasing real estate as well as personal property. Rental Income
16. It refers to a lump sum payment received by an employee who has served a company for a considerable period of time and has
decided to withdraw from work into privacy. Retirement pay
17. This is an additional payment received due to workers exposure to danger or harm while working. Hazard pay
18. Is usually a percentage of total sales or on certain quota of sales volume attained as part of incentive. Commission
19. Are payments given in recognition for services performed for which established practice discourages charging aa fixed fee.
Honoraria
20. Refers to earnings received periodically for a regular work other than manual labor. Salary
21. Funds are income without consent with an obligation to repay. Embezzled funds
22. Are installment payments received for life insurance sold by insurance companies. Annuities
23. Is a reward for a contest or a competition which represents renumeration for an effort reflecting one’s superiority. Prize
24. Is issued in the form of promissory note and is taxable to the extent of its market value. Scrip dividend
25 Is a form of earnings derived from the distribution made by a corporation out of its earnings or profits and payable to its
stockholders, whether in money or in other property. Dividend income

B. Multiple Choice. Write the letter of your choice that contains the best answer.

1. 1. Which of the following nature of laws describes tax laws?

d. remedial b. political c. criminal d. civil
2. The following restrictions are inherent on the exercise of taxation power, except
d. Rule of uniformity b. for public purposes c. territorial jurisdiction d. international comity
3 Tax affects the area or nation as a community rather than as individuals. This is a specific explanation of
d. International comity b. public purpose c. supreme power d. reciprocity
4. Which of the following tax escape is permissible under Tax Code?
d. Tax avoidance b. Tax evasion c. Tax dodging d. Overstatement of expenses
5. It is achieved through the passage of tax law that defines the tax system of a nation.
d. Tax legislation b. Tax Administration c. Tax policy d. Tax assessment
6. A fundamental rule in taxation is that the property of one country may not be taxed by another. This is known as
d. International law b. International comity c. Reciprocity d. International inhibition
7. The following are business taxes except
d. Value-added tax b. Percentage tax c. excise tax d. custom duties
8. Which of the following tax rates behaves in the same direction with the taxable value
a. Proportionate b. progressive c. regressive d. digressive
9. All of the following are National taxes as to collecting authority except
a. Income tax b. real property tax c. estate tax d. value-added tax
10. It is a scheme of reducing payment of taxes through legally permissible means
a. Tax evasion b. tax avoidance c. tax remission d. tax amnesty
11. This refers to the process of taxation to determine the amount of tax based on existing tax law
a. Levying b. Imposition c. Assessment d. collection
12. Which of the following defines the country’s tax policy?
a. Philippine constitution b. National Internal revenue law c. Pari Materia Principle d. Tax transformation
13. Taxation co-exist with four elements of the state which includes all except
a. Government b. property c. sovereignty d. territory
14. All of the following are administrative functions of taxation except
a. Selection of object of tax b. valuation of property for taxation c. equalization of assessment d. collection of taxes
15. All of the following are not taxes except
a. Surcharge b. special assessment c. custom duties d. license fee