ACCOUNTING 601 – Integrated Course on Taxation ​October 24,

2019
Multiple Choice. Identify the letter of the choice that best completes the statement or answers the question.

1. ​
1. Which of the following donors is taxable only on gifts of property within the Philippines? [A] Resident citizen donor.
[B] Non-resident citizen donor. [C] Resident alien donor. [D] Non-resident alien donor.
2. Which of the following statements relative to donor's tax is not correct? (TRAIN LAW) [A] The spouses shall file
separate donor's tax returns where the thing donated is common property. [B] Each parent shall be entitled to the
P10,000 exemption on account of marriage of a child. [C]Exemptions and deductions cannot be claimed where the
6% tax rate on stranger is applicable.[D] None of the foregoing.
3. X donated a motorbike valued at P100,000 to Y, son of X's first cousin. What is the tax consequence of the foregoing
donation? (TRAIN LAW) [A]X is liable to pay donor's tax in the amount of P30,000. [B] X is liable to pay donor's tax
in the amount of P2,000 per the graduated donor's tax rates. [C] X is liable to pay capital gains tax in the amount of
P6,000. [D] X is not liable to pay any tax on the transfer.
4. Gifts are to be computed on a cumulative basis provided the said gifts are given during the same[A]calendar year. [B]
fiscal year. [C] calendar quarter. [D] calendar month.
5. X (unmarried) made the following donations to his legally adopted son on account of the latter's marriage on June 1,
2012:
(1) on January 10, 2012 ​ 50,000
(2) on June 1, 2012 ​ 60,000
(3) on December 1, 2012 50,000
Which gifts or gifts shall be liable to pay donor's tax? [A] All the 3 gifts. [B] 2nd gift. [C]3rd gift. [D] None of the
gifts.
6. (OLD NIRC) A gift that is given to one of the following donees shall be subject to the 30% gift tax rate on strangers
[A] Grandchild. [B] Aunt. [C]Sister-in-law. [D] Brother.
7. Husband (H) and wife (W) gave a used car as birthday gift to X, a legitimate child of W from her former marriage to Z
who is now deceased. This vehicle, valued at P100,000, was inherited by W from her parents during her marriage to
Z. Who shall be liable to pay donor's tax on the foregoing gift? [A] Husband and Wife. [B] Husband. [C] Wife.
[D]Neither H nor W.
8. The donor's tax return, as well as the donor's tax due thereon, shall be filed and paid not later than [A] 1 month from the
date of the gift. [B]30 days from the date of the gift. [C] 3 months from the date of the gift. [D] 90 days from the date
of the gift.
9. Which of the following taxpayers is not subject to the 3% Percentage Tax on VAT-exempt persons?[A]Cooperatives.
[B] Business partnership with annual gross receipts of P1,900,000. [C] Exporter who is not VAT-registered. [D]
Retailer expecting his gross sales to reach P1,600,000 for the next 12-month period.
10. Which of the following transportation providers is not subject to the 3% percentage tax on domestic carriers? [A]
School bus operators. [B]Cargo truck operators. [C] Passenger jeepney operators. [D] Car rental business.
11. Which of the following persons is subject to the 3% percentage tax on Domestic carriers? [A] owners of bancas. [B]
owners of animal-drawn two-wheeled vehicles. [C]keepers of garage. [D] none of the foregoing.
12. Which of the following franchises is not subject to the 3% Percentage Tax on franchises? [A] Franchise of gas and
water utilities. [B] Radio and television broadcasting companies with annual gross sales of more than P10,000,000.
[C]Both A and B. [D] Neither A nor B.
13. The 10% Percentage Tax on Overseas Communications covers [A] Telephone, telegraph, wireless and other
communication equipment services from the Philippines to a foreign country. [B]Telephone, telegraph, wireless and
other communication equipment services from a foreign country to the Philippines. [C] Both A and B. [D] Neither A
nor B.
14. The Percentage Tax on Banks and Non-bank financial intermediaries with different tax rates is imposed on the gross
receipts derived from [A] interest from lending. [B] rentals of property. [C] dividend and equity shares. [D]all of the
foregoing.
15. The Percentage Tax on Amusements imposed under the National Internal Revenue Code covers the gross receipts of
the amusement places derived from [A]Gross receipts of a canteen within the amusement place where the owners or
operators of the canteen and the amusement place are one and the same person. [B] Gross receipts of a canteen within
the amusement place where the owners or operators of the canteen and the amusement place are different persons. [C]
Both A and B. [D] Neither A nor B.
16. The amusement tax which is imposable by the Local Government Units (LGUs) under the Local Government Code
covers the gross receipts of the amusement places derived from[A]admission fees. [B] rentals of property. [C]
television and motion picture rights. [D] all of the foregoing.
17. Which of the following amusement places is not subject to VAT nor any amusement tax by the national government?
[A]cinema houses. [B] racetracks. [C] cockpits. [D] cabarets.
18. A boxing exhibition, in order to be exempt from the percentage tax on amusements must be [A] a titled or non-titled
bout involving at least one Filipino boxer. [B]Promoted by a Filipino citizen or a corporation where at least 60% of

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 the capital stock is owned by a Filipino citizen or citizens. [C] Both A and B. [D] Neither A nor B.
19. The Percentage Tax on Winnings is imposed on the winnings of bettors in [A] cockfighting. [B]horse race. [C] jai-alai.
[D] boxing.
20. Determine which of the following taxes is a final percentage tax [A]Tax on the sale or exchange of listed or traded
shares of stock. [B] Tax on the sale or exchange of unlisted or untraded shares of stock. [C] Both A and B. [D] Neither
A nor B.
21. (OLD NIRC) The Percentage Tax Return shall be filed not later than [A] 30th day following the close of the taxable
year. [B] 25th day following the close of the taxable quarter. [C] 20th day following the close of the taxable quarter.
[D]20th day following the close of the taxable month.

22. The books of accounts of X Corporation revealed the following during the taxable year:
Gross income from ordinary operation ​P ​3,300,000
Cost of sales ​
2,170,000
Operating expenses, including estimated bad debts of
P50,000 and income tax of P300,000 ​950,000
Miscellaneous income – sale of scrap materials ​30,000
Interest income, net of final tax 8,000 ​
How much is the amount subject to business tax?[A] P6,100,000. [B]P5,500,000. [C] P5,470,000. [D] P3,300,000.
23. Baguio Water District obtained water franchise from the Philippine Government to supply water to Baguio City. Its
total gross receipts during the amounted to P11,200,000 inclusive of VAT. How much is the total amount of business
taxes including surcharges to be imposed to Baguio Water District?[A] P300,000. [B] P1,200,000. [C] P2,000,000.
[D] P2,100,000.
24. Philippine Airlines (PAL) transports passengers within and outside the Philippines. PAL reported the following gross
receipts during the taxable year:
Gross receipts from transport of ​
​Within ​ ​ Without
Passengers ​ P ​20,000,000 ​P ​15,000,000
Cargoes ​ ​ 0,000,000 ​
1 ​
5,000,000
If PAL has a total input VAT of P2,400,000 for its entire operation within and outside the Philippines, how much is the
net VAT payable?[A] P3,600,000. [B] P2,640,000. [C] P2,260,000. [D]P1,200,000.
25. On February 25, 2018 Mr. and Mrs. ABC donated their conjugal land worth P500,000 to their three sons, on account of
marriage to one of them who got married 5 months ago. On June 9, 2018, they also donated to the child of Mrs. ABC
by first marriage, jewelry worth P75,000 on account of marriage more than a month after the donation. Finally on
December 25, 2018, they donated to the nephew of Mr. ABC a building worth P750,000, 40% of which was co-owned
by their Kumpare who agreed to the donation and executed the necessary documents donating his share. Compute the
total donor’s tax due and payable on the December 25, 2018 [A] 31,500 [B] 34,500 [C] 30,000 [D]-0-
26. Banco De Baguio, has the following data for the first month of the current year: Interest income (remaining maturity is
5 years) P5,000,000; Interest income from financial leasing (remaining maturity is more than 5 years) P3,000,000;
Dividends and equity shares in net income of subsidiaries P1,000,000; Rentals of properties P500,000; Net trading
gains within the taxable year on foreign currency P300,000. Compute for the gross receipt tax. [A] 490,0000 [B]
400,000 [C] 336,000 [D] 290,000
27. In a recently completed race, ABC noted the following winning tickets: Straight bets P 40,000, 20 tickets at P100 per
ticket; Combination bets P20,000, 2 tickets at P200 per ticket. Compute the percentage tax to be withheld on the
winnings [A] -0- [B] 3,800 [C] 4,584 [D] 5,760
28. ABC Co. is conducting an initial public offering of 2,000,000 shares. ABC Co. already had 4,000,000 issued and
outstanding shares. The new IPO shares shall be sold at P3 per share. What is the tax on the initial public offering. [A]
-0- [B] 60,000 [C] 120,000 [D] 240,000
29. Using information on item 28, assuming that XYZ have acquired 500,000 shares during IPO and decided to sell half of
the shares for P3.50, compute for the documentary stamp tax (TRAIN LAW) [A] 6,563 [B] 7,500 [C] 8,750 [D]
11,250 ([(250x3)/200]x2)x1.5)
30. ABC a resident of Baguio City, disposed a residential lot located in the Municipality of San Carlos, Pangasinan with a
zonal value of P4,000,000 and a fair value per tax declaration of P2,500,000. The property is currently appraised at
P6,000,000 and was sold for P3,000,000. Compute for the total annual realty tax of the buyer [A] 20,000 [B] 10,000
[C] 5,000 [D] 2,500 (2.5Mx 20%x 1%)
2 | Set A

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