1. Recognition of deferred tax liability will result in a ______ net taxable income in the year where such difference will be reversed.

a) NO CHARGE

b) LOWER

c) HIGHER

2. Which of the following is a permanent difference?

a) Dividends from an RFC

b) Fringe benefits paid to employees

c) Sale of land classified as a capital asset under Philippine tax law

d) Interest income from notes receivable from customers

3. By default, lessees should adopt the

a) Financial lease model.

b) Operating lease model.

c) Any of the two choices

4. Temporary differences were accounting income is LOWER than taxable income is

a) Deferred tax asset

b) Deferred tax liability

5. Temporary differences where accounting income is HIGHER than taxable income is

a) Deferred tax asset

b) Deferred tax liability