LA CONSOLACION COLLEGE TAX EXAMS AND ANSWERS

LA CONSOLACION COLLEGE
Bacolod City Date:  
FINAL Exams TAX 2
Name/course/year: Score: Rating:

 

  1. TRUE OR FALSE. ANALYZE the following statements and write TRUE if the statement is correct and write FALSE if it is wrong. AVOID ERASURES.
  • A small business enterprise with gross receipts of not exceeding P1.5 million may be taxed at 12% (VAT) or 3% (Non-VAT) at the option of the taxpayer.
  • Clubs and caterers are subject to Amusement tax.
  • A radio station with an annual gross receipts of P2,000,000 but voluntarily subjects itself to VAT can never cancel its registration and revert back to Franchise Tax even it later on decides to abandon VAT.
  • Taxpayers which are subject to Other Percentage Taxes are generally required to file its tax return within 20 days after the end of each month.
  • The sale of listed and traded shares of stocks after the initial public offering is exempt from business tax.
  • The gross sales of a bar inside a passenger ship is subject to Amusement Tax of 18%
  • Service charge which nightclubs collect from their customers, and represented as charges in lieu of cash tip to the employees are included in the term “gross receipts” which are subject to Amusement Tax
  • If there are vending machines installed by Coca-cola inside the premises of race tracks, the sales effected in the vending machines shall be subject to Amusement Tax of 30%.
  • The gross receipts of a bank which operates a canteen where foods are served at subsidized prices exclusively to its employees is subject to Tax on Banks notwithstanding the fact that the canteen is operated on a non-profit basis.
  • A private carrier which undertakes to deliver goods at a particular place without being bound in law to undertake such transportation and does not bind himself out to the public is subject to 3% Common Carrier’s Tax.
  • The filing of quarterly income tax returns and payment of quarterly income tax by corporations are mere instalments and therefore, not the basis in computing the 2 year prescriptive period for refund.
  • If the tax has been withheld from source (withholding on wages), the prescriptive period for refund is counted from the date it falls due at the end of the taxable year.
  • The power of the Commissioner of Internal Revenue to inquire into the bank deposits of the taxpayer is in conflict with the Secrecy of Bank Deposits Law.
  • The Commissioner of Internal Revenue may authorize an examiner to inquire into the bank deposits of a taxpayer who is suspected to have committed fraud in declaring his income.
  • The decision of one division of the Court of Tax Appeals may be reviewed on appeal by the court en banc.
  • The Court of Tax Appeals is inferior to the Court of Appeals but it is in the same level with the Supreme Court.
  • When the justices of the Court of Tax Appeals sit in two (2) divisions, each division shall be composed if three (3) justices; the presence of two (2) will constitute a quorum and the vote of the two are required to render a decision.
  • When the justices of the Court of Tax Appeals sit en banc, the presence of four (4) constitute a quorum and the vote of four (4) justices are required to render a decision.
  • Ambassadors of foreign countries are required to pay the community tax
  • If a person loses the benefit of exemption on June 20 of the current year, he shall be liable for the community tax on that same day.
  • Resident aliens are exempt from the payment of community tax
  • The provisions of law governing the imposition of community tax is found in the National Internal Revenue Code (NIRC)
  • For purposes of community tax, a general professional partnership is taxable as a corporation
  • Aliens who have stayed in the Philippines most of the time during the taxable year are required to pay community tax in the Philippines.
  • Barangay treasurers can be deputized to collect the community tax in their respective jurisdictions.

 

MULTIPLE CHOICE.  EVALUATE each statement and the choices, then, APPLY your knowledge by selecting the best answer and write the letter only on the space provided before each number.  AVOID ERASURES.

 

  • One of the following is subject to 3% percentage tax.
A.     Establishments whose annual gross sales or receipts exceed P1,500,000 and who are VAT registered

B.      Businesses whose annual gross receipts or sales exceed P1,500,000 and who are not VAT registered

C.      VAT registered establishments whose annual gross receipts do not exceed P1,500,000

D.     Establishments whose annual gross sales do not exceed P1,500,000 and who are not VAT registered

 

  • Rustic owns a small eatery near a trimobile parking area. Its annual gross receipts range from P400,000 to P450,000. In January, the gross receipts amounted to P27,500 while purchases of goods subject to VAT is P6,000 and not subject to VAT, P13,000. If Rustico is not a VAT registered taxpayer, his percentage tax due for the month is –
A.     12,000

B.      1,900

C.      825

D.     2,500

 
  • Using the data in No. 2, assume that Rustico is a VAT registered taxpayer and the amounts indicated are exclusive of VAT, the value added tax due is
A.     12,000

B.      1,900

C.      2,580

D.     2,500

 
  • Malakas Wesley owns two passenger buses. Each bus has a seating capacity of 45 passengers. The buses only ply route Naga City to Legaspi City, and vice versa. During the month, he decided to stop the operation of one unit to undergo two weeks engine overhaul. Thus, his total gross receipts during the month amounted to P110,000 only. Malakas Wesley is –
A.     Subject to income tax but exempt from percentage tax

B.      Subject to value added tax if the gross annual receipts exceed P1,500,000

C.      A marginal income earner and therefore, exempt from common carrier’s tax and value added tax

D.     Subject to common carrier’s tax of P3,300.

 

  • The franchise tax on grantees of radio and television broadcasting companies whose annual gross receipts in any year do not exceed P10,000,000 shall be
A.     1% of gross receipts

B.      2% of gross receipts

C.     3% of gross receipts

D.     4% of gross receipts

  • Junjun M. operates the Peacock Nightclub along Avenida Avenue, Manila. His gross receipts in February 2016 amounted to P126,700. The foods and drinks being served inside the night club are being delivered by Tiberio, a non-VAT taxpayer. During the month, Tiberio sold P32,400 worth of goods and drinks to Junjun M. The amusement tax payable is –
A.     19,005

B.      22,806

C.      28,638

D.     5,832

  • Which of the following is not considered as a percentage tax?
A.     ½ of 1% stock transaction tax on shares traded through the local stock exchange

B.      10%-20% tax on shares not traded through the local stock exchange

C.      10% stock overseas communications tax

D.     3% tax on keepers of garage

 

  • Bayani’s ticket (daily double) won P42,000, gross of withholding tax and cost of ticket, in a horse race in San Lazaro Hippodrome. His ticket had cost him P250. How much tax was withheld on winnings in horse races by Bayani?
A.     1,680

B.      4,200

C.     1,670

D.     4,175

  • The income tax returns must be filed in
A.     Duplicate

B.      Quadruplicate

C.      Triplicate

D.     Quintuplicate

  • A notice to the effect that the amount therein stated is due from a taxpayer as a tax with a demand for payment of the same within the stated period of time
A.     Assessment

B.      Forfeiture

C.      Audit engagement letter

D.     Institution of criminal action

  • A pre-assessment notice is required –
A.     Before a final notice of assessment is sent to the taxpayer

B.      When a discrepancy has been determined between the tax withheld and the amount actually remitted by the withholding agent

C.      When an article locally purchased or imported by an exempt person has been sold, traded or transferred to non-exempt persons

D.     When the deficiency tax is the result of mathematical errors in the computations appearing on the face of the return.

 

  • Before a formal notice of Assessment is issued, the taxpayer is required to respond to the Preliminary Assessment Notice within a period of –
A.     30days

B.      15 days

C.      45 days

D.     6 months

  • Where a return was filed, as a general rule, the prescriptive period for assessment after the date the return was due or was filed, whichever is later, is within
A.     Three years

B.      Ten years

C.      Five years

D.     Answer not given

  • Bernadette filed her 2005 Income Tax Return and paid the tax due thereon on April 1,2006. The last day for the Bureau of Internal Revenue to send an assessment is
A.     April 1, 2009

B.      April 15, 2011

C.     April 15, 2009

D.     April 15, 2016

 

  • Lacson filed an income tax return for the calendar year 2005 on March 10, 2006. The BIR assessed a deficiency income tax on April 10, 2008. When is the last day for the BIR to make an assessment?
A.     April 15, 2009

B.      April 10, 2008

C.      April 15, 2008

D.     March 10, 2009

 

  • Cosa filed a fraudulent income tax return for the year 2005 on April 11, 2006. The Bureau of Internal Revenue (BIR) discovered the fraud on February 20, 2007. The last day for the BIR to collect or send an assessment notice is
A.     April 11,2009

B.      April 15, 2009

C.      April 15,2016

D.     February 20,2017

 

  • Which of the following is not an extrajudicial remedy of the government against the taxpayer?
A.     Distraint of personal property

B.      Levy of real property

C.      Garnishment of bank accounts

D.     Filing of criminal case in court

 

  • The seizure by the government of real property and interest on rights to property of the taxpayer to enforce the payment of taxes followed by its public sale
A.     Confiscation

B.      Distraint

C.      Forfeiture

D.     Levy

 

  • The summary of remedies of distraint of personal property shall be exercised by the Commissioner of Internal Revenue of the amount involved is in excess of –
A.     10,000

B.      100,000

C.      1,000,000

D.     10,000,000

 

  • Cruzada filed an income tax return for the calendar year 2004 on March 10, 2005.the BIR issued a deficiency income tax on April 10, 2007 which has become final. When is the last day for the BIR to collect?
A.     April 10, 2012

B.      April 15, 2008

C.      April 15, 2010

D.     March 10, 2008

 

  • Date when assessment was received 10/01/2007

Petition for reconsideration was filed with BIR                  10/09/2007

Decision of denial was received                                       07/02/2008

2nd request for reconsideration was filed with BIR             07/15/2008

Date of BIR revised final assessment was received             07/05/2009

 

Last day to appeal to the Court of Tax Appeals

A.     July 15, 2009

B.      August 4, 2009

C.      August 5, 2009

D.     September 5, 2009

 

  • For filing a false and fraudulent return, a surcharge is imposed. Which of the following is correct?
A.     50% as administrative penalty

B.      50% as criminal penalty

C.      25% plus 50%

D.     25% as criminal penalty

 

  • A contract whereby the taxpayer and the government by reciprocal concessions avoid litigation or put an end to one already commenced –
A.     Confiscation

B.      Compromise

C.      Distraint

D.     Suspension of action

 

  • The Chief Officials of the Bureau of Internal Revenue
A.     A commissioner and 3 Deputy Commissioners

B.      A commissioner and 5 Deputy Commissioners

C.      A commissioner and 4 Deputy Commissioners

D.     A commissioner and 2 Deputy Commissioners

 

  • The Chief Officials of the Bureau of Internal Revenue
A.     To interpret ax laws and to decide tax cases

B.      To summon, examine and take testimony of persons

C.      To make assessment and prescribe additional requirements to tax administration and enforcement

D.     To review on tax cases decided by the Court of Tax Appeals

 

  • This is not within the power of the Commissioner of the Internal Revenue to make an assessment –
A.     Examination of returns and determination of tax due

B.      Conduct inventory-taking and surveillance

C.     Compromise tax cases

D.     Inquire into bank deposit accounts

 

  • The power to interpret the provisions of the National Internal Revenue Code shall be under the exclusive and original jurisdiction of the –
A.     Commissioner of Internal Revenue

B.      Secretary of Justice

C.      Secretary of Finance

D.     Court of Tax Appeals

 

 

 

 

  • An exception to the non-delegation of the legislative power of Congress –
A.     Revenue Memorandum Order (RAMO)

B.      Revenue Special Order (RSO)

C.     Revenue Regulations (RR)

D.     Revenue Travel Assignment Order (RTAO)

 

  • The Commissioner of Internal Revenue or his authorized representative may order suspension or closure of a business establishment for a period of not less than 5 days for any of the following violations, except:
A.     Failure to claim presumptive input taxes

B.      Failure to issue receipts and invoices

C.      Failure to file a quarterly VAT return

D.     Understatement of taxable sales by 30% or more of his correct taxable sales for the quarter.

 

  • Which of the following cases cannot be the subject of a compromise?
A.     Those pending before the Commissioner of Internal Revenue

B.      Those filed in the Regional Trial Court

C.      Cases filed in the Office of the City Prosecutor

D.     Cases under investigation by a Revenue Examiner

 

  • Non-payment of the following is not a ground for imprisonment
A.     Income tax

B.      Value-added tax

C.     Community tax

D.     Donor’s tax

 

  • An exempt individual may secure community tax certificate by paying –
A.     P5.00

B.      P1.00

C.      P10.00

D.     None

 

  • Salariosa, a resident of Cubao, Quezon City, single owns a restaurant in CM Recto Ave., Manila and in Cubao, Quezon City. In 2015, it had the following data:
Gross Receipts Expenses
Manila 4,055,015.20 3,296,423.10
Quezon City 3,624,980.60 3,025,114.80

 

For 2016, the total basic and additional community tax payable by Salariosa is –

A.     7,074

B.      7,679

C.      1,363

D.     5,005

 

  • Using the information in No.33, the community tax for 2016 is payable on or before
A.     April 15, 2015

B.      December 31, 2016

C.     February 28, 2016

D.     January 31, 2016

 

  • Using information from No. 33, if the tax is paid on April 30, 2016, the amount payable is
A.     5,205.20

B.      6,206.20

C.      5,405.40

D.     Cannot be determined

 

 

 

Good Luck!!

Nikki G. Estores, CPA, MBA

 

 

 

 

 

 

 

 

 

 

Key Answers:

  1. True
  2. False
  3. True
  4. True
  5. False
  6. False
  7. False
  8. False
  9. False
  10. False
  11. True
  12. True
  13. False
  14. False
  15. True
  16. False
  17. True
  18. True
  19. False
  20. True
  21. False
  22. False
  23. False
  24. True
  25. True

 

True or false:

1-10 other percentage tax

11 to 12 remedies

13 to 18 BIR and CTA

19 to 25 Community Tax

 

MC

1-8 other percentage taxes

9-23 remedies

24-30 BIR and CTA

31-35 community tax