1.The following are taxable income. Which income is exempted by law?

a.Income from illegal gambling

b.Minimum wage

c.Unrealized gain

d.All of the choices

2.Final tax is normally applied to?

a.Sale of ordinary assets

b.Passive income

c.Sale of capital assets

d.Active income

3.Which of the following is subject to income tax?

a.receipt of cash from a deceased ancestor.

b.Cancellation of indebtedness in exchange for professional services received from the debtor

c.receipt of goods without any consideration from a relative

d.cancellation of debt out of kindness

4.Mr. Smith is an American living in the Philippines for two years to date. He received following:

P400,000 income as company management consultant

P300,000 rent income from the US

P150,000 sick benefit from SSS

How much should Mr. Smith report as taxable income?

a.0

b.400,000

c.950,000

d.700,000

5.An American citizen born in Hawaii and living in the Philippines applied for a Naturalization in the Philippines. if approved, this American by birth is a?

a.resident citizen

b.nonresident alien

c.nonresident citizen

d.resident alien

6.A foreign corporation which is not authorized to conduct business in the Philippines is a?

a.De jure corporation

b.nonresident corporation

c.domestic corporation

d.resident corporation

7.X sold his goods for an amount equal to the prevailing cost. this is considered as?

a.return of capital

b.increase in net worth

c.one of the choices

d.return on capital

8.Which of the following is an example of a capital asset?

a.House used as a residence

b.inventory for sale

c.Car used for delivery of goods

d.office building

9.The following are income subject to tax, except?

a.collection for service rendered

b.donation

c.advance collection of service to be rendered

d.collection of goods sold

10.A Japanese went to the Philippines on June 15, 2020 and left the Philippines on December 25, 2020. The Japanese for taxation purposes is considered as?

a.a nonresident alien engaged in trade or business

b.a nonresident alien not engage in trade or business

c.a resident alien

d.a nonresident citizen

11.The following were received by the taxpayer during the year:

P40,000 - as reimbursement for the office supplies he purchased using his own money

P30,000 - as payment for his professional fees rendered to clients

P100,000 - as salaries as part time accountant

P20,000 - as sickness benefit from SSS

How much of the above is not subject to tax?

a.70,000

b.60,000

c.90,000

d.40,000

12.A taxpayer is an individual providing services. The taxable period is a?

a.neither a calendar year nor fiscal year

b.fiscal year only

c.either a calendar or fiscal year

d.calendar year only

13.A taxpayer started its business on October 1, 2019. the period for its income tax for 2019 is?

a.Oct. 1-Dec.31. 2019

b.January 1. 2020-Dec. 31. 2020

c.Oct. 1. 2019-Dcc. 31. 2020

d.January 1.2019-Dcc. 31, 2019

14.X sold his goods for an amount equal to the prevailing cost. this is considered as?

a.Return on capital

b.One of the choices

c.Return of capital

d.Increase in net worth

15.the following during the taxable year:

P80,000 cash sales

P60.000 credit sales

P30,000 advances for future sales Under the accrual basis,

how much is the gross income if the taxpayer is selling services?

a.80,000

b.170,000

c.110,000

d.140,000