Taxation Accountancy
Taxation Accountancy
Taxation Accountancy
6. All of these are items of gross income subject to regular tax except one. Select the exception.
a. Compensation income
b. Interest income from long-term bank deposits
c. Ordinary gain on sale of properties
d. Interest on notes receivables
11. Which is included in the gross income subject to regular tax of a resident alien?
a. Gross income from the sale of goods abroad
b. Interest income from promissory notes to resident clients
c. Interest income from relatives abroad
d. Gain from the sale of domestic stocks directly to a buyer
12. Which of the following deductions from gross compensation income is included as part of gross income subject
to regular tax?
a. Pag-ibig contribution c. Philhealth contribution
b. Contribution to union d. withholding tax dues
15. Statement 1: all prizes earned abroad are subject to regular tax
Statement 2: all prizes in the Philippines are subject to final tax
Which statement is generally correct?
a. Statement 1 c. both statements
b. Statement 2 d. neither of the statements
17. Which of the following is not subject to regular tax of a domestic corporation or resident citizen?
a. Deposit interest income from abroad
b. Prize not exceeding P10,000 from Philippines
c. Income from abroad exempt under treaty
d. Royalties from abroad
18. Which is subject to regular tax to a non-resident foreign corporation or non-resident alien not engaged in trade
or business?
a. Business income from the Philippines
b. Capital gain from the sale of stocks directly to a buyer in the Philippines
c. Dividends from domestic corporation
d. None of these
19. The proceeds of life insurance received by the wife of the insured is:
a. Exempt from income tax
b. Subject to final tax
c. Part of taxable income
d. Partly exempt and partly taxable
22. A policy holder who outlived the policy and received a cash surrender value in excess of premiums paid is
exempt upon:
a. The amount representing a return of premiums
b. The entire amount received
c. The excess of the amount received over the premiums paid
d. None of these
23. The assignment of an insurance policy at an amount in excess of the premiums paid on the policy is subject to:
a. Donor’s tax c. estate tax
b. Income tax d. any of these
24. A widow who collected the life insurance proceeds of her deceased husband is:
a. Exempt to the entire amount of the proceeds
b. Taxable to the excess of the proceeds over the premiums paid by the husband
c. Taxable to the excess of the proceeds over the premiums paid by the widow
d. Exempt with respect to the portion of the proceeds representing returns of premium
25. The policy holder of a life insurance contract outlived his insurance policy. He was paid P300,000 upon
maturity of the policy. He paid P250,000 total premium. What is the inclusion in gross income?
a. P300,000 c. P50,000
b. P250,000 d. P0
27. The termination benefits are exempt from income tax provided that the reason for termination is:
a. Beyond the employee’s control
b. Within the employer’s control
c. Within the employee’s control
d. Beyond the employer’s control
35. Which of the following when sold may be exempted from the 6% capital gains tax?
a. Unused land to the government
b. Residential lot
c. Developed residential properties for sale
d. Principal residence
36. Binata Reyes won the international Billiard Championship held in Madrid, Spain. The tournament was
sanctioned by a national sports association which is recognized by the Philippine Olympic Committee. He was
awarded $60,000 by the sponsor of the tournament. He was also given a cash prize of P250,000 by San Miguel
Corporation.
In the same year, he entered into a contract with the same company to advertise their product for
P1,500,000.
If the exchange rate of every $1 is P50, Binata Reyes would report an income of:
a. P4,750,000 c. P1,750,000
b. P1,500,000 d. P3,370,000
37. An accident attributed to the negligence of the driver of Super Lines resulted in the death of Richard’s wife,
physical injuries to Richard that prevented him from working for 2 months, and the total wreck of his brand new
car which he had bought for P1,650,000.
In an action for damages, the court awarded to Richard the following:
P140,000 Injuries to Richard consisting mainly in the loss of his left leg
80,000 Two month’s salary of Richard
120,000 For the death of his wife
100,000 Moral damages for the physical suffering and mental anguish
1,800,000 For the loss of his car, the value of which had increased
Based on the foregoing, Richard should report income of –
a. P190,000 c. P230,000
b. P680,000 d. P240,000
39. The gross income if Sharon is a non-resident alien ETB, married with five dependent children
a. P106,000 c. P74,000
b. P56,000 d. none
40. The final tax on Sharon assuming she is a nonresident alien NETB, single is:
a. P83,500 c. P18,500
b. P88,500 d. P334,000