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2. The process by which the sovereign raises income to defray the expenses of the government is
called
a. Subsidy c. Taxation
b. Tariff d. Tribute
4. In case of conflict between tax laws and generally accepted accounting principles (GAAP)
a. Both tax laws and GAAP shall be enforced c. GAAP shall prevail over tax laws
b. Tax laws shall prevail over GAAP d. The issue shall be resolved by the court
7. A tax reform at any given time underscores the fact that taxation is a/an
a. Inherent power of the state c. Essentially a legislative power
b. Power that is very broad d. State can and should adopt progressive taxation
8. The legislative body can impose a tax at any amount underscores the legal truism that taxation is
a. An inherent power of the tax c. very broad power of the state
b. Essentially a legislative power d. for public purpose
10. A feasibility study needs or need to look into the taxes of different political subdivisions of
government which may be alternative sites of the business
a. Provinces, cities and municipalities must have uniform taxes between and among themselves
b. The local taxes of a political subdivision need not be uniform with the local taxes of another
political subdivision
c. Business that are subject to national taxes are exempted from local business taxes.
d. Local business taxes may be credited against national business taxes
13. All appropriation, revenue or tariffs bills, bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the
a. Office of the president c. Senate
b. House of Representative d. Supreme Court
14. A tax must be imposed for public purpose. Which of the following is not for public purpose?
a. National defense c. public education
b. Improvement of sugar industry d. none of the above
15. A fundamental rule in taxation in which the property of one country may not be taxed by another
country. This rule in known as
a. International law c. reciprocity
b. International comity d. international inhabitation
2. A manufacturing business reported the following for its first year of operation:
Purchases of raw materials P540,000
Freight in 20,000
Raw materials, ending inventory 10,000
Direct labor 400,000
Factory Overhead 200,000
Work-in process, ending inventory 100,000
Finished goods, ending inventory 50,000
Sales 1,275,000
Freight out 12,000
Sales return 25,000
On March 1, 200A, Claudette leases a portion of its commercial building to Mark with the following
terms:
Advance deposit P40,000
Monthly rental 20,000
Annual insurance premium to be paid by the lessee 6,000
Portion (10 mos.) of real estate tax to be paid by lessee 3,000/yr
The lease contract also stipulates that a 5% of Mark’s net revenue will be credited to Claudette as
commission. Mark’s net revenue during the year is P2,000,000.