Basic

Principles
Multiple Choice
Assignment
November 18, 2014

1. The following are national

internal revenue taxes. Which
one is not?

A.

Excise Tax

B.

Import Duty

C.

Documentary Stamp Tax

D.

Value-added Tax

2. One of the characteristics of

internal revenue laws is that
they are

A.

Generally prospective in application

B.

Criminal in nature

C.

Penal in nature

D.

Political in nature

3. Which statement is false?

Income Tax

A.

Is always based on gross amount.

Is a tax on all yearly profits arising from

property, profession, trade or business.
Is a tax on persons income, emoluments or
C.
profits.
B.

D.

Is always a direct tax.

4. Percentage tax is an example

of

A.

Graduated Tax

B.

Proportional Tax

C.

Progressive Tax

D.

Regressive Tax

5. As to object, taxes may be classified

according to the following except one.
Which one is the exception?

A.

personal, poll or capitation

B.

property

C.

excise

D.

specific

6. The following are sources of

tax laws. Which is not a source?

A.

Barangay resolutions

B.

Supreme Court Decisions

C.

Revenue Regulations by the Department of

Finance

D.

Treaties or international agreements

7. Provincial, city, municipal and barangay

ordinances may impose taxes subject to limitations
by the LGC. Which is not a tax thereunder?
A.

Professional Tax

B.

Community Tax

C.

Travel Tax

D.

Real Property Tax

8. Which of the following

statements is true? The Bureau of
Internal Revenue shall have the
Commissioner of
Commissioners
Commissioner of
B.
Commissioners
Commissioner of
C.
Commissioners
Commissioner of
D.
Commissioners
A.

IR and 2 Deputy
IR and 3 Deputy
IR and 5 Deputy
IR and 7 Deputy

9. In case of conflict between

tax laws and GAAP

A.

Both tax laws shall prevail over GAAP

B.

GAAP shall prevail over tax laws

C.

The issue shall be resolved by the courts

D.

Tax laws shall prevail over GAAP

10. The following are authorized

to administer oaths and take
testimony. Who is not?
A.

BIR Commissioner

B.

BIR Deputy Commissioner

C.

BIR Service Chief

D.

BIR rank-and-file employee

11. The distinction of a tax from

permit or license fee is that a
tax is

A.

Imposed for regulation

One which involves an exercise of police

power
One in which there is generally no limit on
C.
the amount that may be imposed
B.

D.

None of the above

12. Which is not a valid

definition of income?

A.

Income is a fund at one distinct point of time

Income is the return from capital invested

Income means all wealth which flows into
C. the taxpayer other than a mere return of
capital
D. Income means cash or its equivalent unless
otherwise specified
B.

13. Tax as distinguished from

license fee

A.

A regulatory measure

B.

Imposed in the exercise of police power

C.

Non-payment does not necessarily render

the business illegal

D.

Limited to cover cost of regulation

14. Taxation is a means by

which the national government
attempts to

A.

Shift wealth from the rich to the poor

B.

Maintain price stability

C.

Encourage full employment

D.

All of the above

15. The following statements

are correct except one. Which
one?

A.
B.
C.
D.

The provisions of taxation in the Constitution

are grants of power not limitations on taxing
powers.
Taxes may be imposed to raise revenues or to
provide disincentives to certain activities within
the
The state.
State can have the power of taxation even if
the Constitution does not expressly give it the
power to tax.
For the exercise of the power of taxation, the
State can tax anything at any time.

16. One of the following is not

among the basic principles of a
sound tax system. Which one is it?
A.

Fiscal Adequacy

B.

Theoretical Justice

C.

Collection of Tax

D.

Administrative Feasibility

17. All of the following except

one are inherent limitations of
taxation.

A.

Taxes may be levied only for public purpose

The State may tax persons and properties

under its jurisdiction
C. The property of another State may not be
taxed by other State
Governmental agencies are exempt from
D.
taxation
B.

18. Which statement refers to

police power as distinguished
from taxation?

A. Can only be imposed on specific property

It involves the taking of property by the

government
The amount imposed depends on whether
C.
the activity is useful or not
B.

D.

The amount imposed has no limit

19. One characteristic of a tax is

that

A.

It is generally based on contract.

B.

It is generally payable in money.

C.

It is generally assignable.

D.

None of the above.

20. Whis is not an example of

excise tax

A.

Real property tax

B.

Transfer tax

C.

Value-added tax

D.

Income tax

21. Which one is not a similarity

among taxation, eminent
domain, and police power?
A.

Are necessary attributes of sovereignty

B.

Affect all persons or the public

C.

Interfere with private rights and property

D.

Are legislative in implementation

22. Tax of a fixed proportion of

the value of the property with
respect to which the tax is
assessed.
A.

Specific

B.

Special or regulatory

C.

Ad valorem

D.

None of the above

23. When BIR and taxpayers are unable to

agree as to the correct application of tax
statutes,
A.

BIR decision prevails.

B.

Taxpayers decision prevails.

C.

Court decision prevails.

D.

All of the above.

24. Situs is the place of

taxation. Which is not true?

A.

Citizenship is not a factor to consider.

B.

Situs of persons is the residence of the

taxpayer.

C.

Subject matter is a must to determine situs.

D.

None of the above.

25. Which is not a nature of

taxation?
Means by which the government raises
A.
income.
B.

The government solely benefits from it.

C.

It is inherent in sovereignty.

D.

The citizenry benefits from it.

26. The proportional contribution by

persons and property by the State by
virtue of its sovereignty for the support
of the government and all public needs.
A.

License fees

B.

Special assessment

C.

Taxes

D.

None of the above

Assignment
I. Classification of Individual Income
Taxpayers
o Citizen
o Alien

II. Personal Exemptions

Basic Personal Exemptions
Additional Exemption

III.Taxable Income
Net Compensation Income
Gross Compensation Income