Q1: A citizen of the Philippines residing therein is taxable on all income derived from

sources within and without Philippines.

True
False

Q2: Bryan sold the following shares of stocks of domestic corporations which he
bought for the investment purposes.

Answer: 9,000

Q3: No laws are necessary to confer the inherent powers of the state upon any
government exercising sovereignty.

True
False

Q4: Tax avoidance and tax evasion is prohibited by law.

True
False

Q5: Aira had the following data for the taxable year 2018 (exchange rate $1=40)

Answer: 45,960

Q6: The police power by the government may be exercised through taxation.

True
False

Q7: Which of the Following transaction is subject to 6% capital gains tax?

Sale of condominium units by real estate dealer.

Sale of real property utilized for office use.

Sale of apartment houses

Sale of vacant lot by an employee

Q8: Ryan and Jovy formed a joint venture. They agreed to share profit or loss in the
ratio of 7:3, respectively. The regular corporate income tax ratio is 30%. the results of
operations for 2018 taxable year were provided below.

Answer: 232,000

Q9: Queen jasmine, an american singer, was engaged to sing for one week at the
Western Philippine Plaza after which she returned to USA. For income tax purposes,
she shall be classified as:

Resident Alien
 Non Resident Alien engaged in trade or business

Non Resident Alien not engaged in trade or business

Special Alien Employee

Q10: Aira had the following data for the taxable year 2018 (exchange rate $1=40)

Answer: 243,000

Q11: Tax rate where the rate increases as the tax base increases

Progressive

Proportional

Regressive

Indirect

Q12: Other income, for income tax purposes, is included in an individual taxpayer’s
taxable/returnable income.

True
False

Q13: A non-resident citizen is taxable on income derived from sources within the
Philippines only.

True
False

Q14: The power to tax is subject to inherent and constitutional limitations.

True
False

Q15:

Statement 1: The constitution is the source of the state’s taxing power

Statement 2: The police power of the government may be exercised through taxation.

Only statement 1 is correct

Only statement 2 is correct

Both Statements are correct

Both statements are incorrect

Q16: Cardo is a florist, with gross receipts of 2,500,000. his cost of direct services and
operating expenses are 1,000,000 and 600,000 respectively and with non operating
income of 200,000. how much is the income tax due for the year?

Answer: 220,000

Q17: Fixing the tax rate to be imposed is best described as a/an

Administrative Function

Legislative function

Executive function

Judicial function

Q18: Mr. And Mrs. Cabuyaw, both CPA’s residents of the Philippines, with 5 minor
children had the following data for taxable year 2018:

Answer: 684,000

Q19: The power of Taxation may be exercised by the government, its political
subdivisions and public utilities.

True
False

Q20: The provisions of the tax code which allows 8% income tax gross sales/receipts
and other non-operating income in excess of 250,000 is available only to mixed
income earners.

True
False

Q21: The constitution is the source of the State’s taxing power.

True
False

Q22: Jane, a non resident citizen, supporting her thirteen minor children had the
following data for the current taxable year (exchange rate $1=50)

Answer:295,000

Q23: Mr. And Mrs, Cabuyaw, both CPA’s residents of the Philippines, with 5 minor
children had the following data for the taxable year 2018:

Answer:1,870,000

Q24: There is no constitutional prohibition on double taxation.

True
False
Q25:

Statement 1: people pay taxes which their government uses to expand its powers and
territorial domination.

Statement 2: People demand from their government certain responsibilities and then
provide the government with the means to carry them out.

Only statement 1 is correct

Only statement 2 is correct

Both statements are correct

Both statements are incorrect

Q26:

Statement 1: the amount of money raised for the government in the exercise of its
power to tax and police power is based on the needs of the government.

Statement 2: the amount of money raised by the government in the exercise of its
power of eminent domain is based on the cost of processing the transfer of property
from private entities and/or individuals to the government.

Only statement 1 is correct

Only statement 2 is correct

Both statements are correct

Both statements are incorrect

Q27: Passive income are subject to both regular and final tax rates.

True
False

Q28: the 250,000 exemption on 8% income tax on gross sales/receipts and other non
operating income is not applicable to mixed income earners since is already
incorporated in the first tier of the graduated income tax rates applicable to
compensation income.

True
False

Q29: Ryan and Jovy, formed a joint venture. They agreed to share profit or loss in the
ratio 7:3, respectively. The regular corporate income tax rate is 30%. the results of
operations for 2018 taxable year were provided below:

Answer: 1,000,000
Q30: Susan, a self-employed resident citizen engaged in general trading provided the
following data for 2018 taxable year. … How much is the total income tax expense of
Susan for the year?

Answer: 389,000

Q31: Tax on certain passive income is a capital gains tax.

True
False

Q32: The tax collected/contributed becomes a part of a specific fund of the

government.

True
False

Q33: They exist independent of the constitution being fundamental powers of the
state, except.

Taxation Power

Police Power

Power of Eminent Domain

Power of Recall

Q34:

Statement 1: The constitution cannot take away the inherent power of the State but
may only prescribe its limitations.

Statement 2: No laws are necessary to confer the inherent powers of the state upon
any government exercising sovereignty.

Only Statement 1 is correct

Only Statement 2 is correct

Both Statements are correct

Both Statements are incorrect

Q35: An alien individual, whether a resident or not of the Philippines, is taxable on

income derived from sources within the Philippines only.

True
False

Q36: ***Aira had the following data for the taxable year 2018 (Exchange rate
$1=P40). … If Aira is a Filipina living in Sydney, Australia, her total final tax on
passive income is?
 Answer: 1,075,000

Q37:

Statement 1: Individual taxpayers are natural persons with income derived within the
territorial jurisdiction of a taxing authority.

Statement 2: Individual taxpayers are natural persons classified as citizens and

aliens.

Only Statement 1 is correct

Only Statement 2 is correct

Both Statements are correct

Both Statements are incorrect

Q38: Juan, a married resident citizen, supporting his four minor children had the
following date for the current taxable year (Exchange rate $1 = P50) … How much is
the income tax payable if he decided to use the tax paid abroad as tax credit?

Answer: 30,960

Q39: Trasfer of tax burden by one whom the tax is assessed to another.

Shifting

Capitalization

Transformation

Exemption

Q40: ***Susan, a self employed resident citizen engaged in general trading provided
the following data for 2018 taxable year. … How much is the total income tax expense
of Susan for the year assuming she opted for the 8% income tax rate?

Answer: 434,000

Q41: No person shall be imprisoned be imprisoned for non-payment of

Property Tax

Excise Tax

Poll Tax

Income Tax

Q42: ***Aira had the following data for the taxable year 2018 (Exchange rate
$1=P40) … If Aira is a Filipina and a resident of Sta. Rosa, Laguna the total final
taxes on her passive income is?

Answer: 384,000
Q43: “Tax is legislative in nature” is a constitutional limitation.

True
False

Q44: The inherent powers of the state exists independent of the constitution.

True
False

Q45: ***Ryan and Jovy formed a Joint Venture. They agreed to share profit or loss in
the ratio of 7:3, respectively. The regular corporate income tax rate is 30%. The
results of operations for 2018 taxable year were provided below: … Assume the joint
venture is nontaxable, the income tax expense of Ryan is?

Answer: 618,000

Q46: Which of the following sale transactions will be subject to capital gains tax?

Sale of shares of stock by a dealer in securities

Sale of shares of stock not through local stock exchange by a person who is a
dealer in securities.

Sale of shares of stock through local stock exchange by a person who is not a
dealer in securities.

Direct sale of shares of a non-dealer of securities

Q47: The power to demand proportionate contribution from persons and property to
defray the necessary expenses of the government

Power of Taxation

Police Power

Power of Eminent Domain

Power of Recall

Q48: The State having sovereignty can enforce tax upon its citizen even without a
specific provision in the Constitution authorizing it.

True
False

Q49: The official action of an officer authorized by law in ascertaining the amount of
tax due under the law from a taxpayer is

Assessment

Delinquency

Deficiency
 Distraint

Q50: If literally means the place of transaction

Basis of taxation

Situs of taxation

Scope of taxation

Theory of taxation

Q51: The excess of the de minimis benefits over their respective ceilings prescribed
under regulations shall be

Considered as other benefits and subjected to tax if exceeding 90,000 ceiling for
Managerial and Supervisory Employees.

Not Considered in other benefits

Both a and b

None of the Above

Q52: Due to his expertise, Engr. Pedro I. Tagarito, a Filipino Citizen, was hired by a
foreign petroleum contractor in Thailand to provide technical assistance for 2 months
from January and March. He was hired again for the months of June to July and
October to December of the same taxable year. Engr. Tagarito is a:

Resident Citizen

Nonresident Citizen

Special Filipino Employee

None of the Above

Q53: Share in the net distributable income of a general professional partnership by a

resident citizen is subject to

10% FWT

20% FWT

6% CGT

Basic Income Tax

Q54: Generally, there is no limit on the amount of tax that may be imposed.

True
False

Q55: The use of illegal or fraudulent means to defeat the payment of tax.
Exemption

Shifting

Avoidance

Evasion