1. Which of the following may elect the installment basis of reporting?

I. Dealers in Personal Property

II.Casual seller of personal property
III. Seller of real property
IV. Individual sellers of real property considered as capital asset

a. I only
b. II & IV
c. III only
d. I & III
e. I, II, III & IV

2. the process of transferring tax burden to other taxpayers – shifting

3. The following may elect the installment basis of reporting Income:

A. Those who regularly sell or otherwise dispose of personal property on the installment
plan.
B. Those who make a sale or disposition on installment if the initial payments do not
exceed 25% of the selling price.
C. Individual seller of real property considered as capital asset.
D. Those who make a casual sale or other casual disposition of personal property on
the installment plan provided the following requisites are present.
E. All of the above

Answer: E. All of the above

4. Activity 1 tax environment

Which of the following is/are the nature of the power of taxation?
I. It is an inherent attribute of sovereignty
II. It is legislative in character
III. It is regarded as comprehensive, unlimited, plenary & supreme
a. I only
b. II & III only
c. I & III only
d. I & II only
e. All are the nature of the power of taxation
Answer: d. I & II only

5. Police power is the most superior power of the government. Its exercise needs to
be sanctioned by the constitution – false

6. Taxpayers under the same circumstances should be taxed differently. – false

7. Regular accounting periods are calendar and fiscal – true

 8. Generally, payments are non-deductible in the current accounting period – true

9. The crop year method is an accounting metgod – true

10. Under the percentage of completion method gross income is reported based on
the cash collection from the contract price. – false

11. It is essentially a legislative function. Even in the absence of any constitutional

provision, taxation power falls to Congress as part of the general power of law-
making
(a) True, true
12. Mrs. Julian started business on july 15 2016. What should be the coverage of her
2016 income tax return. July 15,2016 to December 31, 2016
13. Effective may 15, 2017 tabuk inc changed its fiscal year ending every april 30 to
calendar year. Adjustment return shall be filed covering the period: May 1 to
December 31 2017.
14. Tax account concepts
Q: It is the amount which the purchaser contracts to pay the seller in cash.

a. Initial payment
b. Selling price
c. Contract price
d. Full payment
e. None of these

A: c. Contract price

15. Eminent domain involves classification of prohibited commodities to protect the

well bwing of the people. – false
16. The following may elect the installment baisis of eporting income – all of the
above.
17. Indirect double taxation is unconstitutional - false
18. Taxation is subject to inherent and constitutional limitations – true
19. There should be direct receipt of benefit before one could be compelled to pay
taxes – false
20. In terms of financial measures which of the ff threshold for qualification as a large
taxpayer is incorrect? – gross sales exceeding 1.5B
21. Gross sales of goods manufactured and sold by the taxpayer within the Ph is
subject to tax. – within the PH only
22. Whisch statement is incorrect – only those who are able to pay tax can enjoy the
previledge and protection of the government
23. The constitutional limitation of religious charitable and non profit cementeries -
false
24. The accounting period of a decreased taxpayer shall be terminated in dec. 31 in
the year of death – false
 25. All of these are constitutional limitations of taxation except – exemption of the
government
26. Taxes can be offset against claims that the taxpayer has against the government
– false
27. Both manual filing and filing through e-BIR forms makes use of manual payment-
true
28. In gratuitous transfer of property, situs is the taxpayer residence – true
29. Which statement is true II. Accounting period is the taxable yeaqr which consists
of 12 months. III. Taxpayer cannot adopt an accounting system that has
judjement suits has need and purpose – STATEMENT 1 ONLY
30. Which winning is taxable to final tax?
31. The following are examples of tax avoidance except? Hiding income from
taxation?
32. There are 3 types of gross income for taxation purposes. – true
33. The provision in the constitution regarding taxation grant are: limitation to the
power to tax
34. Jenina – yes because it is within the territorial jurisdiction of the PH.
35. The first accounting period of a starting business will more likely to be less than
12 months – true
36. What is the final tax of interest income on a 6 year deposit … - 20%
37. Statement 1: Taxation is the rule, exemption is the exception.
Statement 2: Each state is sovereign to itself.
Statement 3: Double taxation is legal but discouraged and minimized.
Statement 4: Government-owned and controlled corporation is exempted from
paying taxes.

a. Only statements 1, 2, and 3 are correct

b. Only statements 2, 3, and 4 are correct
c. Only statements 1, 3, and 4 are correct
d. Only statements 1, 2, and 4 are correct
e. All statements are correct

38. Flash elorde failed to pay – ans. 500,000

39. The scope of taxation is regarded as comprehensive,plenary, unlimited, and
supreme – true
40. No one shall be imprisoned for non payment of tax – false
41. This does not result to loss of government revenue that pertains to the
elimination of wastes or losses by the taxpayer to form savings to compensate
for the tax imposition or increase in taxes.

A. Shifting
B. Capitalization
C. Transformation
D. Tax evasion
E. None of the above
Answer: C. Transformation

42. Contract price is synonymous with selling price – false.

43. Rich guy corporation – 42904 interest penalty
44. Rich guy corp – 980,404
45. Which of the ff powers of is inherent or co existent with the creation of the
government – all of the above
46. A tax law may impose taxes retroactively – true
47. The government should tax itself – false
48. An alien whou stayed less than one year in the PH is classified as non resident
alien not engaed in trade business ifhe stayed in the Philippines for less than 180
days
49. Prepayments are deductible but the future period they expire orare consumed in
the business or trade of the taxpayers - true
50. To limit the production of an environmentally harmful commodity – this is local tax
51. Individuals file their income tax returns on or before april 15 of the following
calendar year – true
52. Which of the following docrtrine describles the power to tax involves the power to
destry – marshall doctrine
53. Advanced income is an item of gross incomen for accrual basis taxpayer – true
54. The withheld taxes on the income payment by the taxpayers are tax credit
against their income tax due – true
55. Dividends declared by a resident corporation is
56. There are only two types of assets for purposes of taxation – true
57. There are two kinds of double taxation – ec=vation and avoidance – false
58. The technique used to measure income is referred to – true

125. the levying of tax is essentially an administrative function.

-False
124. both active income do not require direct participation of the taxpayer in earning the
income
- False
123.Only large taxpayers shall file under eFPS.
- False
122. collection of taxes in the absence of a law is violative of the constitutional
requirement for due proess.
-True
121.Intial paymnt includes downpaymnt an installmnts in the year of sale
-True
120. All inherent Powers presuppose an equivalent form of compensation
-True
119. capital gains arise from the sale,exchange and other disposition of any issues
- False
118. I. calendar acctng period is any 12 month perio that ends on any day other than
dec 31
II.Fiscal acctng period is available toboth corporate taxpayers and individual
taxpayers
III. Acctng perio is the length of time over which income is measured and
reported
- Only statement 1

117. the reciprocal duty of support between the government and people underscores
the basis of taxation
- true
116.The exercise of taxation power requires constitutional grant
- False
115. taxation is a mode of appointment of government costs to the people
-Tru
114. It is issued in the form of a promissory note an is taxable at the same rate as cash
dividen
-Scrip dividend
113.It is the process or means by which the sovereign, through its lawmaking body,
raises income to defray the necessary expensesof the government
-
112.Tax authorities have a mandate to collect taxes for and at whatever cost to the
government
- False
111. An ordinary asset is defined to include all other assets other than apital assets
- False
110. It is taxable year and it is a fixed period of time, consisting of twelve months, upon
the basis of which the taxable income is computed and the income tax imposed
-Accounting period
109.Which of thes categories does not result a loss to government revenue?
i. Transformation
ii. tax evasion
iii. Shifting
iv. capitalization
v. Tax avoidance
-I,III IV only
108. Which is an incorrect statement regarding situs income
-
107.A non-resident citizen is an international finanier who earned P600,000 interest
income from resident debtors an P500,000 foreign debtors. Howmuch is subject to
Philippine incme tax?
-
106. Horizontal equity requires consideration of the circumstances of the taxpayer
-True
105.Non-filling and/or non-payment of tax is subject to penalties such as surcharges,
interest, compromise an imprisonment
- False
104.Accrual basis an cash basis are the most common accntng methods used in
practice
-True
103. can international country/ tax treaties the harshness of international double
taxation
-
102.two-thirds of all members of congress is required to pass a tax exemption law
- False
101. All taxpayers can change their accntng period when there is a charge in the nature
of their business but the BIR must be notified in all cases
- False
100. Which limitation of taxation is the concept of situs of taxation based?
-territoriality
99.eFPS may file manually when there is a BIR system downtime
-true
98. eFPS is fully electronic tax compliance
-True
97. This payment includes the downpaymnt plus all othr payments received by the seller
during the taxable year of sale
-initial payment
96. This refers to any act or trik that reduces or toally escapes taxes by any legally
permissible mean
-
95. Goms received P50,000 interest from short-term deposits. Compute the final tax
withhel on interest.
-
94. Which of these tax exemption is irrevocable?
-
9 3. The technique used to measure inome is reffered to as an accounting method the
length of time over which income is reported is reffered to as an accounting period
-True
92. There are two kinds of double taxation- evasion and avoidance
- False