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Saint Paul School of Business and LawPalo, 6501, Leyte, Philippines

ACCOUNTANCY DEPARTMENT

Preboard Examination in TAXATION 

Name: _______________________________________________ 

Score: _____________ Schedule: ____________________________________________ 

Instructions: Read each question carefully. On the answer sheet given, shades the

corresponding letter of your answers.

1. The US embassy donated vehicle to the Department of Forein !"airs of thePhilippines. #hich of the followin statements is correct$

a. This transaction is e%empted from payment of donor&s ta% only.b. This transaction is e%empted only from payment of documentary stamp ta%.c. This transaction is e%empted from payment of both donor&s ta% and

documentary stamp ta%.d. This transaction is sub'ect to both donor&s ta% and documentary stamp ta%.

(. ! ta%payer ives the followin reasons in refusin to pay a ta%. #hich of hisreasons is not acceptable for leally refusin to pay the ta%$

a. That he has been deprived of due process of law.

b. That there is lac) of territorial 'urisdiction.c. That he drives no bene*t from the ta%.d. That the prescriptive period for the ta% has elapsed.

+. #hich statement refers to police power as distinuished from ta%ation$a. ,t is restricted by -onstitutional provision.b. ,t is superior to the nonimpairment clause of the constitution.c. ,t involves the ta)in of property by the overnment.d. The amount imposed has no limit.

/. #hich of the followin is a correct nature of restriction to e%ercise ta%ationpower$

  -onstitutional Limitation,nherent Limitation

a. Territorial 'urisdiction 0es 0esb. ,nternational comity 0es

oc. 2ule of uniformity and e3uity o

  od. Due process of law 0es

o

4. #hich of the followin is not true$ Ta%ation Power Police Power 5minent

Domaina. ,nherent to the e%istence 0es 0es

 0esof the overnment

b. ot leislative in nature o o

o

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c. Superior to the non 0es 0es

o,mpairment clause

d. 2estricted by 'ust o o

 0escompensation

6. #hich of the followin statements is correct$a. ,ndirect double ta%ation is leal as lon as there is no violation e3ual

protection and uniformity clauses of the -onstitution.b. ,ndirect double ta%ation violates the -onstitutional provision of uniformity

and e3ual protection.c. There is direct double ta%ation in ta%in the income of corporation and

aain sub'ect the portion of that income declared as dividend to *nal ta%.d. Direct double ta%ation is prohibited by the -onstitution.

7. #hich of the followin is not correct$a. ,n the absence of speci*c ta% provision8 ta%es in eneral are not

cancelable.b. Prescriptive period for assessment and collection is applicable to

returnable ta%es.c. The law on prescription bein a remedial measure should be interpreted

liberally in order to protect the ta%payer.d. The prescriptive period should be the shorter between the re3uired *lin

date and the actual date of *lin.

9. To spread the burden of ta%ation8 the correspondin estimated ta% is collected at

once every payroll period so that at the end of ta%able year8 the amount of ta%withheld will be e3ual or appro%imate to the actual ta% for the year. This ta%ationsystem of collection at source is based on what ta% principle$

a. Fiscal ade3uacy c. !dministrative feasibilityb. Theoretical 'ustice d. Due process of law

:. ;ne of the followin situs of ta%ation is not true.

Located or 5arned

#ithin ;utside

a. Ta%able income of nonresident 0es o-iti

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-haritable contributions 148=== 1874= 6(=Drawins by A and 2 from the  partnership durin the year +:8=== (/8===148===

19. The ta%able net income of A8 if he opted for itemi

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  Statement (> Both domestic and resident forein corporations are sub'ect toimproperly accumulated earnin ta%.

a. ;nly statement 1 is correctb. ;nly statement ( is correctc. Both statements are correct

d. Both statements are incorrect

(7. !dobo -orporation8 a domestic corporation8 shows the followin data for theta%able year (=16>

ross Sales P +8===8===-ost of Sales 18/==8===-apital ains on sale of paintins :/=8===Dividend income GdomesticH (==8===;peratin e%penses includin charitable contribution

9==8===-haritable contribution

1==8===

 The income ta% due would be>a. P4(/8/== c. P(/=8===b. P4((8=== d. P(4684==

(9. San Iiuel -orporation8 a domestic corporation8 has earned the followinpassive income within the Philippines for the ta%able year (=1!>

,nterest from savins deposits P+8===8===

2oyalty ,ncome

18===8===,nterest from depository ban) under e%panded forein currencydeposit GP+=8=== at P 4= per US DollarH

184==8===Dividends from Aollibee8 a domestic corporation

(==8===Dividends from Iicrosoft8 a nonresident forein corporation

9==8===

#hat is the total amount of *nal ta%es on passive income$a. P 9==8=== c. P :1(84==b. P 99=8=== d. P ::(84==

(:+=> The SPSPS8 a private educational institution8 provided the followin incomeand e%penses for the year (=14 and (=16>

5ducational income> (=14 (=16 Tuition and miscellaneous fees P/8===8=== P68===8===Sales of canteen 7==8=== 186==8===Sales of boo)store +==8=== /==8===

oneducational income>2ent income8 net of -#T /8:/=8=== 48((48===Sale of scrap materials 6=8=== (=8===

-osts and e%penses>-ost of sales C canteen /==8=== 9==8===

-osts of boo)s sold (/=8=== +(=8===;peratin e%penses (8===8=== +8===8===Purchase of library boo)s 18===8=== 184==8===-osts of classroom construction 4==8===Purchase of school furniture (==8===

 The operatin e%penses do not yet include the cost of capital e%penditures. The*%ed assets are estimated to be useful for 1= years.

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(:. #hat would be the (=14 income ta% still due and payable per ,T2 of SPSPS usinta% minimi

a. There can be an input ta% on purchases he made when not yet a !Tta%payer

b. Ee must use a !T invoice on the sale of the oods purchased when not yet a!T ta%payer

c. Ee must still use the on!T invoice in use when he was not yet a !Tta%payer on the sale of oods on hand on the transition date

d. There will be an ad'ustment on the inventory valuation on the transition date

+4. Iitch ,nc.8 a Philippine -orporation8 sold throuh the local stoc) e%chane1=8=== lobe shares that it brouht ( years ao. Iitch sold the shares forP(8===8=== and reali

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+6. Butt8 !T reistered8 made the followin purchases durin the month of Aanuary 8 (=16>

oods for sale8 inclusive of !T P(/68/==Supplies8 e%clusive of !T (=8===;Jce airconditioner8 total invoice price

Gestimated life is + yearsH 468===

Eome appliance for residence8 ross of !T 178:(=Service for store repair8 contractor not !T reistered8

  total invoice amount ++8===Service for repaintin of store8 total invoice amount

evidenced by ordinary receipt issued by contractor /8/9=

Eow much was the total allowable input ta%es of Butt for the month usin 1(@ !Trate$

a. P+98699 c. P+/89==b. P+48++7.6= d. P+/84/(.96

+7. #hich of the followin statements is incorrect$

a. !

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Iortae payable8 forein country19=8===

Losses8 Philippines 1==8===

Deduction from the Philippine ross estate isa. P18(4=8=== c. P1876=8===

b. P1844=8=== d. P1816=8===

/=. #hen is the ta% on horse race winnins under Section 1(6 payable$a. Thirty G+=H days after the end of the monthb. Twenty G(=H days after the end of the monthc. Twenty G(=H days from the date the ta% was deducted and withheldd. Five G4H days after the end of the 3uarter

_fn_

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