TAXATION MISCELLANEOUS

EXERCISE

1. Which of the following is not considered as an example of constructive receipt of

income?
a. Partners distributive share in the profit of the partnership
b. Interest credited to the account of the taxpayer which he may draw anytime
c. Interest coupon which have matured
d. Corporate income accumulated as retained earnings

2. Records of Miss Molo for the year 2013 show the following:
Rent income received during the year:
Applicable for year 2013 P 9,000
Applicable for year 2014 27,000
Total Collections P36,000
The income to be reported for year 2013 under cash and accrual basis would be:
a. P36,000 and P-0-, respectively
b. P 9,000 and P27,000, respectively
c. P36,000 and P 9,000, respectively
d. P 9,000 and P-0-, respectively

3. Which of the following accounting period is acceptable as basis for reporting the annual
taxable income of a taxpayer?
a. Fiscal year
b. Calendar year
c. That which the Commissioner prescribes for a particular circumstance
d. All of the above

4. Which of the following income is considered earned within a fiscal year?

a. Income reported earned for the period June 1 of the previous year to June 30 of
the current year.
b. Income reported earned for the period January 1 to December 31 of the previous
year.
c. Income reported earned for the period October 1 to December 31 of the previous
year.
d. Income reported earned for the period June 1 to December 31 of the current year.

5. Which of the following will not require reporting of taxpayers income on a calendar
basis?
a. If the taxpayer is a corporation operating in a fiscal year
b. If the taxpayer does not keep books of accounts
c. If the taxpayer has no annual accounting period
d. All of the above

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6. Which of the following expenses is allowable as deduction from the gross business
income reported for the year?
a. Paid or accrued under cash basis of accounting
b. Paid, incurred and accrued under cash basis of accounting
c. Prepaid or accrued under accrual basis of accounting
d. Incurred and accrued under accrual basis of accounting

7. Which of the following individuals is not required to file and annual income tax return?
a. Filipino citizen not-residing in the Philippines with respect to his income earned in
the Philippines
b. Filipino citizen residing in the Philippines whose sole income has been subjected
to final withholding income tax
c. Non-resident alien engaged in trade or business in the Philippines
d. Resident alien deriving business income in the Philippines

8. The annual income tax return of an individual taxpayer should be filed with any of the
following, except:
a. The authorized collection agent in the place where the taxpayer has his legal
residence.
b. The office of the commissioner, if the taxpayer has no legal residence or place of
business in the Philippines.
c. Authorized treasurer of the municipality where the taxpayers principal place of
business is located.
d. Revenue District Office where the legal residence of the employer which is other
than the place of business and residence of taxpayer is located.

9. Which of the following income should be filed with annual income tax return on or before
April 15 of the year following the taxable year when the income is earned?
a. Compensation income that was fully deducted with withholding tax.
b. Capital gains which was taxed with final withholding tax.
c. Gain from sale of shares inside the stock exchange.
d. Interest income withheld with 20% tax on passive income.

10. Which of the following statements is not correct?

a. The income tax is paid at the time the income tax return is filed.
b. When the tax due is in excess of P2,000, the corporate taxpayer may elect to pay
the tax in 2 equal installments.
c. The first installment payment of income tax under installment basis is payable at
the time the ITR is filed.
d. The second installment payment of income tax under installment basis is payable
on or before July 15 following the close of taxable year.

11. Which of the following is not required to keep book of accounts?

a. Corporations
b. Partnerships
c. Individual engaged in trade or business
d. Employee receiving purely compensation income

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12. The book of accounts must be kept by the taxpayer engaged in business. Which of
the following languages is a prohibited entry in the book of accounts?
a. a. Native language c. Spanish
b. b. English d. Latin

13. The annual registration fee of a person subject to internal revenue tax is P500 per
year. Which of the following is not liable to this annual registration fee?
a. Individuals receiving purely compensation income
b. Individual with VAT and percentage tax business
c. Individual engaged in business
d. Facility where sales transactions occur

14. Which of the following is not required to register even once with the appropriate
Revenue District Office?
a. Individuals receiving purely compensation income
b. Individual engaged in business
c. Facility where sales transactions occur
d. None

15. All persons subject to an internal revenue tax is required to issue a duly registered
receipts or sales or commercial invoices. Which of the following statements is not
correct?
a. The sales or commercial invoice shall be issued at least in duplicate.
b. The original copy of the invoice is issued to the purchaser
c. The duplicate copy shall be kept and preserved by the issuer for 3 years from the
close of the year when such was issued.
d. A copy must be kept and preserved for same period as in letter (c) by the customer
who is not engaged in any business.

16. When would the name, business style, and address of the client or customer not
required to be indicated in the receipt?
a. When the sale or services are valued at P25 or more
b. Regardless of the amount, when the receipts are issued to cover payment for
rentals, commissions, compensations or fees
c. Regardless of amount, when the sale is made by manufacturers, producers,
importers or wholesalers
d. Regardless of amount, if the seller is and the buyer are both VAT-registered

17. All the books of account of the taxpayer shall be preserved for the period of
a. 3 years from date of last entry
b. 5 years from filing of income tax return
c. 3 years from date of filing of income tax return
d. 5 years from date of last entry

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18. A certain taxpayer filed and paid his tax for 2013 income in May 15, 2014. The basic
tax due is P5,000. His total additional charges on top of his basic tax would be
a. a. P1,250 c. P1,333
b. b. P1,354 d. P1,271
19. Income tax return for the calendar year 2013 was due for filing on April 15, 2014 but
the taxpayer voluntarily filed his return, without notice from the BIR only on June 30,
2014. The tax due per return amounts to P100,000.
How much would be the total amount due inclusive of penalties and interest, but
excluding compromise penalty?
a. P125,000 c. P130,208
b. P129,167 d. P100,000

20. The taxpayers 2013 income tax return is required to be filed through authorized agent
bank under the jurisdiction of RDO Iloilo City. But without prior authorization from the
BIR, the taxpayer filed his return, and paid the tax through the authorized agent under
the jurisdiction of RDO Iligan City. The tax due and paid per return is P100,000. How
much would be the amount still due and payable to the BIR?
a. a. P 25,000 c. P100,000
b. b. P 50,000 d. P125,000

21. The taxpayer did not file his income tax return for the calendar year 2012 which was
due on April 15, 2013. He was notified by the BIR about his failure to file the tax return,
for which reason filed his tax return and paid the tax only after notice on June 30,
2014. The tax due per return is P100,000. How much would be the total amount due,
exclusive of compromise penalty?
a. a. P150,000 c. P174,167
b. b. P124,167 d. P154,167

22. The taxpayer filed his income tax return on time for the year 2012, and paid P100,000
on April 15, 2013. Upon pre-audit of his return, it was disclosed that he erroneously
computed the tax due. The correct amount of tax due is P120,000. The taxpayer is
assessed for deficiency income tax in a letter of demand and assessment notice
issued on June 30, 2014. How much would be the amount still due?
a. a. P20,000 c. P24,000
b. b. P 4,833 d. P24, 833

23. Central Corporation filed its final adjustment income tax return for the calendar year
2012 with a net income of P500,000. At the applicable income tax rate of 35% for year
2012, its income tax amounted to P175,000. However, upon investigation, it was
disclosed that its income tax return was false or fraudulent because it did not report a
taxable income of amounting to another P500,000. On its net income of P1,000,000,
per investigation, the income tax due is P350,000. Deducting its payment per return
filed, the deficiency, excluding penalties amounted to P175,000. This filing was duly
informed through preliminary assessment notice. Failure to protest against the
preliminary assessment notice on time, a formal letter of demand and assessment
was issued on May 31, 2014 calling for payment of the deficiency income tax on or
before June 30, 2014. How much would be the amount still due?
a. a. P303,792 c. P262,500
b. b. P350,000 d. P217,292

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24. Using the data in No. 23, supposing that in the calendar year 2012 deficiency income
tax assessment against Central Corporation, in the amount of P304,791.67 is not paid
by June 30,2014, the deadline for payment of the assessment, assuming further that
this assessment has already become final and collectible. In this case, such
corporation shall be considered late in the payment of the said assessment. Assuming
further that the corporation pays its tax assessment only by July 31, 2014. How much
would be the civil penalties for late payment?
a. a. P304,792 c. P386,070
b. b. P380,930 d. P309,872

25. Sandra Corporation did not file its final adjustment income tax return for the calendar
year 2013 due on April 15, 2014. The BIR informed the corporation of its failure in
filing its said tax return, and required that it should file the same, inclusive of 25%
surcharge and 20% interest per annum penalties incident to the said omission. On
May 15, 2014, it was advised that its income tax due for the year amounts to
P1,000,000, however, due to adverse financial condition at the moment it will be
unable to pay the entire amount inclusive of the delinquency penalties. Hence, on May
15, 2014, it made a partial payment of P400,000. Assuming that the BIR demanded
payment of the unpaid balance of its obligation payable by June 15, 2014, how much
would be the corporations delinquent income tax still due?
a. a. P866,667 c. P616,667
b. b. P1,266,667 d. P881,111