BUSINESS LAW & TAXATION 11.

A with violence in her eyes intimidated her

EASY ROUND husband B to sell his exclusive property to
her. The contract of sale is
1. Which of the following individuals shall not be Rescissible Unenforceable
subject to the income tax under Section 24 (A)? b. Voidable d. Void
2.
D a. Individual citizen of the Philippines residing AVERAGE ROUND
therein;
b. Individual citizen of the Philippines who residing 1. Which of the above will be subject to a 25%
outside the Philippines including overseas contract civil penalty of the tax or of the deficiency
workers;
tax?
c. Individual alien who is a resident of the
D a. Willful neglect to file the return within the period
Philippines;
prescribed by the Tax Code or rules and
d. Individual alien who is not a resident of the
regulations
Philippines.
b. A false or fraudulent return is willfully made
c. A person who is not VAT-registered issues an
3. Which of the following income is not from a invoice or receipt showing his TIN, followed by
related trade, business or activity of a the word "VAT"
domestic proprietary educational institution? d. Failure to file any return and pay the tax due
A a. Income from rent of available office spaces in one thereon as required under the provisions of the
of the school buildings Tax Code or rules and regulations on the date
b. Income from the hospital where medical prescribed
graduates are trained for residency
c. Income from the canteen situated within the 2. Which of the following statements is
school campus INCORRECT?
d. Income from bookstore situated within the school D a. The amount of “de minimis” benefits conforming
campus to the ceiling prescribed in the Tax Code shall not
be considered in determining the P30,000 ceiling
4. How much is the annual community tax for of “other benefits” included in the exempt 13th
individuals? month and other benefits;
D a. P 25 c. P 10 b. If the employer pays more than the ceiling
b. P 20 d. P5 prescribed for “de minimis” benefits, the excess
shall be taxable to the employee receiving the
5. Under this system there is a merger of all the benefits only if such excess is beyond the P30,000
properties of the husband and the wife ceiling.
owned by them at the time of the celebration c. Any amount given by the employer as benefits to
of the marriage, or those acquired thereafter. its employees, whether classified as de minimis or
B a. Conjugal partnership of gains fringe benefits, shall constitute as deduction upon
b. Absolute community of properties such employer;
c. Complete separation of properties d. Representation and transportation allowance
d. None of the choices which are fixed in amounts and regularly received
by the employees as part of their monthly
compensation shall be treated as taxable fringe
6. Which is not an essential characteristic of
benefits if received by managerial and supervisory
tax? employees.
A a. Limited as to amount
b. Proportionate in character
3. Jose Josue qualified as head of a household
c. Payable in money
d. Regular payment for 2007 tax purposes. Mr. Josue’s 2008
gross income was P200,000 inclusive of
7. A contract of sale is not a P10,000 short term capital gain. Mr. Josue
D a. Principal contract c. Consensual contract had a long-term loss of P8,000 in 2008.
b. Nominate contract d. Real contract What amount of this capital loss could Mr.
Josue deduct in 2008?
8. “I promise to pay P or his order the sum of P C a. Zero c. P4,000
10,000.00 30 days after the death of X.” This is an b. P3,000 d. P8,000
instrument payable:
A a. At a determinable future time 4. Penalties and/or interest imposed on the
b. On Demand
taxpayer may be abated or cancelled on the
c. Upon the fulfillment of a condition
d. At an indefinite time, hence, non-negotiable
ground that the imposition thereof is unjust
and excessive, except when:
9. A corporation acquires juridical personality A a. The taxpayer is declared insolvent or bankrupt.
C a. Upon the filing of the articles of incorporation b. The filing of the return or payment of the tax is
b. Upon the filing of the by-laws made at the wrong venue.
c. Upon the issuance of the certificate of c. The taxpayer’s mistake in payment of his tax is
incorporation due to erroneous written official advice of a
d. Within 30 days from receipt of notice of the revenue officer.
issuance of the certificate of incorporation d. The assessment is brought about or a result of the
taxpayer’s non-compliance with the law due to a
10. It is the right of the mortgagor to redeem the difficult interpretation of the said law.
property that was mortgaged after it was sold.
B a. Equity of redemption c. Right of subrogation 5. The actual residential home of the decedent
b. Right of redemption d. Right of pre-emption and his family at the time of his death, as
certified by the Barangay Captain of the
locality where the family home is situated,
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has a fair market value of P3,000,000. The

family home is part of the common property All the three (3) were not qualified to retire under the BIR-
of the spouses. How much is the family home approved pension plan of the corporation.
deduction?
D a. I, II and III c. I only
B a. P1,500,000 c. P750,000
b. I AND II d. II AND III ONLY
b. P1,000,000 d. P500,000
3. This refers to the control number issued by
6. A negotiable instrument that is not dated will be
authorized agent bank (AAB) to the taxpayer and
considered dated as at the time of
BIR to acknowledge that the taxpayer's account
D a. Acceptance c. Last endorsement
has been successfully debited electronically in
b. First endorsement d. Issuance
payment of his tax liability.

C a. Filing Reference Number

b. Acknowledgment Number
7. A delinquent stockholder is not entitled to the
c. Confirmation Number
following rights, except the right:
d. Taxpayer's Information Number
C a. To be voted
b. To vote or be represented in the meetings of
4. A taxpayer paid excessive tax on April 15, 2000.
stockholders
On December 20, 2001, she filed a written claim
c. To dividends
for refund. Her claim was denied by the BIR and
d. He is not entitled to all the rights of a stockholder
she received the denial on March 15, 2002. She
filed a motion for reconsideration with the BIR on
8. Three of the following partnership contracts are
March 31, 2002. On April 10, 2002, she received
void. Which one is not?
the final denial of the BIR. What will be the
C a. A universal partnership of present property
taxpayer’s remedy?
between husband and wife
b. A universal partnership of profits between a man
C a. File another motion for reconsideration with the
and a woman living together as husband and wife
BIR within 30 days after the receipt of the final
without the benefit of marriage
denial
c. A particular partnership between husband and
b. File an appeal with the Court of Tax Appeals on or
wife
before May 10, 2002
d. A universal partnership between a private
c. File an appeal with the Court of Tax Appeals on or
individual and a public officer
before April 15, 2002
d. The taxpayer has no more remedy against the
9. The following are modes of extinguishing an
final denial
agency, except:
D a. Death, civil interdiction, insanity or insolvency of the principal or agent
5. A VAT subject real estate dealer sold a residential
b. Accomplishment of the purpose of the agency
lot on January 15, 2007.
c. Expiration of the period for which the agency was constituted
The following information was made available on
d. Continued losses on the part of the principal or agent
the terms of the sale:
10. Three of the following instances will render an offer Gross selling price P 3,000,000
ineffective before acceptance is conveyed. Which Initial payments on January 15, 2007 750,000
one will not?
D a. Civil interdiction of c. Insanity of either Balance to be paid in equal
either party party installment, installments starting 2,250,000
b. Insolvency of either d. Intoxication of February 15, 2007
party either party
The zonal value of the residual lot was P3,500,000.
DIFFICULT ROUND
How much was the output tax on January 15, 2007 using
1. The taxpayer's 2003 percentage tax return is 12% VAT rate?
required to be filed through the authorized agent
bank under the jurisdiction of RDO East Makati. C a. P 420,000 c. P 105,000
Without prior authorization from the b. P 360,000 d. None of the choices
Commissioner, the taxpayer files the return and
pays the tax through an authorized agent bank 6. Payment made to a third person is valid to
under the jurisdiction of RDO Davao City on June extinguish the obligation of the debtor to the
30, 2004. The tax due per return is P100,000. creditor in the following cases, except:
How much is the total amount due on June 30,
2004? After payment to the creditor, the third person
acquires the creditor’s right.
A a. P 154,155.25 c. P 25,000.00 b. When the creditor ratifies the payment to the third
b. P 129,155.25 d. None of the choices person.
When through the creditor’s conduct, the debtor
2. Which of the following shall not be subject to was led to believe that the third person had
income tax? authority to receive payment.
d. When the third person is subrogated to the rights
I- Pedro Reyes, an official of Corporation X, asked of the creditor.
for an “early retirement” because he was
emigrating to Australia. He was paid P2,000,000 7. N, R and J solidarily bound themselves to deliver to
as a separation pay in recognition of his valuable S a Honda motorcycle valued at P 60,000. The
services to the corporation. obligation was not fulfilled through the fault of J.
II- Juan Cruz, another official of the same company Thereupon, S filed an action in court against N and
was separated for occupying a redundant position. the court awarded P 72,000 to S representing the
He was given P500,000 as separation pay.
III- Jose Bautista was separated due to his failing
eyesight. He was given P500,000 as separation
pay.
Business Law & Taxation Page 3 of 4

value of the motorcycle plus damages. Which of

the following situation is valid? C a. Contracts entered into during a hypnotic spell
b. Contracts entered into in a state of drunkenness
If N pays S the P 72,000, N can collect R and J P c. Contracts entered into to defraud creditors when
24,000 each the latter cannot collect the claims due them
b. S has to collect P 24,000 each from N, R and J to d. Contracts where both parties are incapable of
satisfy the court’s award of P 72,000 giving consent
N can refuse to pay the penalty because it should
be charged against J, the guilty party 4. Which among the following contracts is void?
d. If S succeeds in collecting the P 72,000 from N, N
in turn can collect from R P 20,000 and from J P D a. A contract of barter between S, insane, and B, 17
32,000 years old
b. A contract of sale where B, the buyer, twisted the
8. P authorized A, a minor, to sell his car for P arm of S, the seller, so that S would sign the deed
1,000,000 in cash. A sold the said car to X on of sale
installment at a lesser price of P 900,000. P is now c. A contract of sale where B, the buyer, aimed a
repudiating the contact with X on the ground that gun at the wife of S, so that S would sign the
he is not bound to since X contracted with a minor deed of sale
who exceeded his authority. Decide. d. A contract for the sale of a cow which is suffering
from a contagious disease
P is liable under the contract because it is enough
that the principal is capacitated since he is the one 5. Who among the following is the holder of a
entering into the contract. negotiable instrument originally payable to order?
b. P is not liable for the sale on installments since it
is unenforceable because his agent acted beyond B a. The original payee who has negotiated the
his powers. instrument
P is not liable because the agent is a minor with b. The endorsee who is in possession of the
whom X contracted instrument
d. P is liable provided the sale is in cash for P c. The possessor of the instrument to whom the
1,000,000. instrument was delivered without any
endorsement
9. A gets a loan of P 1,000,000 from B which d. The endorsee who has negotiated the instrument
becomes due on October 1, 2008 and mortgaged
his house as security for the debt. On June 30, 6. An instrument payable to bearer may be
2008, the mortgaged house completely destroyed negotiated through any of the following means,
the fire through the fault of C. A week later, B except:
demanded payment from A. Is B’s demand valid?
D a. Special endorsement plus delivery
No, the destruction of the house was not thru the b. Mere delivery
fault of A. c. Blank endorsement plus delivery
b. No, the obligation is one with a definite period d. No delivery is required as long as there is an
which is deemed intended for the benefit of both endorsement, whether blank or special
the debtor and creditor
Yes, the debt becomes demandable unless A can 7. One of the following is not a characteristic of
give another security equally satisfactory contract of partnership.
d. Yes, the debt becomes demandable even if A can
give another security equally satisfactory A a. Real, in that the partners must deliver their
contributions in order for the partnership contract
10. One of the following characteristics of dacion en to be perfected
pago is also a characteristic of a contract of sale. b. Principal, because it can stand by itself
Which is it? c. Preparatory, because it a means by which other
contracts will be entered into
D a. There is a pre-existing credit d. Onerous, because the parties contribute money,
b. Obligations are extinguished property, industry to the common fund
c. There is less freedom in fixing the price
d. Ownership of the object transferred to the other 8. Recording in the Registry of Property in the
party appropriate book is required for the validity of the
contract of:
TIE-BREAKER QUESTIONS
A a. Chattel mortgage c. Conventional pledge
1. An obligation where various prestations are due b. Real mortgage d. Antichresis
but the performance of all of them is required in
order to extinguish the obligation is known as: 9. A, B, C and D, joint debtors, are obliged to give V,
W, X, Y and Z, solidary creditors, P 20,000.00
C a. Alternative obligation c. Conjunctive obligation
b. Facultative obligation d. Simple obligation C a. V may collect from B c. V may collect from B
P 20,000 P 5,000
2. It is an affirmation of fact or any promise by the b. V may collect from B d. V may collect from B
seller relating to the thing which has a natural P 4,000 P 1,000
tendency to induce the buyer to purchase the
same, relying on such promise or affirmation. 10. The following are modes of extinguishing an
agency, except:
C a. Condition c. Warranty
b. False representation d. Seller’s talk D a. Death, civil interdiction, insanity or insolvency of
the principal or agent
3. Which of the following contacts is rescissible? b. Accomplishment of the purpose of the agency
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c. Expiration of the period for which the agency was

constituted
d. Continued losses on the part of the principal or
agent