A self-employed individual or mixed income earner availing of 8% income tax rate may choose either itemized deductions or optional standard deduction as his or her allowable deduction.

Group of answer choices

True

False

Question 212 pts

Which of the following will not form part of the gross income subject to regular income tax rates?

Group of answer choices

Capital gain on the sale of real property.

Ordinary gain on the sale of shares of stock in a domestic corporation

Ordinary gain on the sale of office equipment.

Capital gain on the sale of personal car.

Flag question: Question 22

Question 222 pts

Which of the following is generally not subject to income tax?

Group of answer choices

Stock dividend

Cash dividend

Property dividend

Liquidating dividend

Flag question: Question 23

Question 232 pts

Which of the following is taxable if earned by a minimum wage earner?

Group of answer choices

Commission

Minimum wage

Night shift differential

Hazard pay

Flag question: Question 24

Question 242 pts

The value of the property inherited is

Group of answer choices

Not subject to income tax.

Subject to donor's tax.

Not subject to estate tax.

Not subject to any tax.

Flag question: Question 25

Question 252 pts

Prizes and award in recognition of great achievement are exempt from income tax provided:

Group of answer choices

Both conditions must present.

The recipient was selected without any action on his part to enter the contest or proceeding.

The recipient is not required to render substantial future services as a condition to receiving the prize or award.

Either one of the conditions is sufficient.

Flag question: Question 26

Question 262 pts

The following are tax-exempt benefits with the exception of:

Group of answer choices

Retirement benefits received from the employer by a 48-year-old retiree.

Employment benefits from SSS , given to a 40-year-old employee.

Separation pay given to a 35 year-old employee due to his serious illness.

Employment benefits from GSIS, given to 65-year-old retiree.

Flag question: Question 27

Question 272 pts

Which is not a requisite for deductibility of expenses?

Group of answer choices

Must be connected with taxpayer's business or practice of profession.

Must incurred during the taxable.

Must be supported by adequate proof, whether legal or illegal.

Must be ordinary, necessary and reasonable.

Flag question: Question 28

Question 282 pts

Which of the following will form part of the itemized deductions of a taxpayer?

Group of answer choices

Raw materials used

Direct labor

Factory overhead

Selling expenses

Flag question: Question 29

Question 292 pts

Which of the following is deductible from the gross income of a taxpayer?

Group of answer choices

Cost of merchandise sold

Transportation charges incurred when the goods were purchased

Cost of electricity in a factory.

Depreciation of an office building.

Flag question: Question 30

Question 302 pts

When is the deadline to file the 2^nd quarterly income tax return of an individual taxpayer?

Group of answer choices

August 15

July 15

July 31

August 31

Flag question: Question 31

Question 312 pts

For failure to pay the percentage tax on time, the taxpayer was made to pay the following:

Percentage tax due	P1,000,000
Surcharge	250,000
12% Interest	120,000
Compromise penalty	50,000

How much can be deducted from the gross income of the taxpayer?

Group of answer choices

P1,420,000

P1,000,000

P1,120,000

P1,370,000

Flag question: Question 32

Question 322 pts

Which of the following may avail of the optional standard deduction?

Group of answer choices

Non-resident alien engaged in trade or business

Employee

Self-employed individual

Non-resident not engaged in trade or business

Flag question: Question 33

Question 332 pts

Mr. Y offers accounting and auditing services. For taxable 2019, he generated gross receipts amounted to P5,000,000. His cost of services and operating expenses were P2,500,000 and P800,000, respectively.

How much is his income tax due if he did not avail of the optional standard deduction?

Group of answer choices

P400,000

P380,000

P810,000

P340,000

Flag question: Question 34

Question 342 pts

Mr. Y offers accounting and auditing services. For taxable 2019, he generated gross receipts amounted to P5,000,000. His cost of services and operating expenses were P2,500,000 and P800,000, respectively.

How much is his income tax due if he previously signified his intention to avail of the optional standard deduction?

Group of answer choices

P810,000

P340,000

P380,000

P400,000

Flag question: Question 35

Question 352 pts

Which is subject to creditable withholding tax if received by an individual income earner?

Group of answer choices

Real property rental

Royalty on musical composition

Dividend from domestic corporation

Interest from bank deposit

Flag question: Question 36

Question 362 pts

In July 2019, Pedro, as lessee, entered into a 5-year contract of lease with Juan, as lessor. He paid an annual rent of P120,000 and a security deposit of P20,000 to ensure his faithful compliance with the provisions of the contract. How much was the taxable income of Juan for taxable year 2019?

Group of answer choices

P120,000

P70,000

P170,000

P60,000

Flag question: Question 37

Question 372 pts

On December 5, 2017, an individual taxpayer received a donation of a car with a fair value of P800,000 at the time of donation, but which the donor acquired at a price of P1,000,000. On January 19, 2019, the taxpayer sold this for P500,000. The sale resulted in a deductible loss of:

Group of answer choices

P150,000

P250,000

P300,000

P500,000

Flag question: Question 38

Question 382 pts

Pedro owns and operates an engineering consulting business as a sole proprietorship. For tax reporting, Pedro uses the cash method. Last year, he provided services to a local builder, and upon completing the task he was asked to do, he sent a billing statement to the builder for P2 million. The builder never paid the bill, and recently filed for bankruptcy, so Pedro will not be able to collect the amount due. How should this bad debt be treated for income tax purposes?

Group of answer choices

Pedro may deduct P2 million from his business income.

Pedro may deduct P2 million as a short-term capital loss.

Pedro may deduct P2 million as a long-term capital loss.

No bad debt deduction is permitted.

Flag question: Question 39

Question 392 pts

Which is true regarding creditable withholding tax?

Group of answer choices

CWT is deductible from the gross income of taxpayer.

CWT is deductible from the income tax due of the taxpayer.

CWT constitutes full and final payment of the income tax.

The income earner, as withholding agent, must remit CWT to the BIR.

Flag question: Question 40

Question 402 pts

Which of the following is a deductible tax?

Group of answer choices

Percentage Tax

Donor's Tax

Final Tax on Passive Income

Capital Gains Tax

Flag question: Question 41

Question 412 pts

Mr. X, a self-employed individual, had the following expenses for taxable year 2019:

Salaries and wages of store clerks, supervisors and managers	P10,000,000
Wages of personal driver and 2 household helpers	300,000
Rentals of office and stores	1,000,000
Depreciation of 10 delivery trucks	1,500,000
Depreciation of personal car	200,000
Depreciation of principal residence	400,000
Other operating expenses (30% of which without supporting documents)	3,000,000

How much is the total amount of itemized deductions of Mr. X?

Group of answer choices

P14,600,000

P15,500,000

P16,400,000

P900,000

Flag question: Question 42

Question 422 pts

What is the tax consequence if a domestic corporation forgives or cancels the debt of an individual stockholder?

Group of answer choices

It is treated as a compensation income on the part of the stockholder subject to income tax.

The cancellation is deemed a gift subject to donor's tax. subject to

It is an indirect dividend subject to tax on dividends.

The cancellation is treated as donation mortis causa subject to estate tax.

Flag question: Question 43

Question 432 pts

Which of the following is a deductible expense?

Group of answer choices

Provision for bad debts

Real property tax on real property being used in business

Special assessment on land used in business

Depreciation of principal residence

Flag question: Question 44

Question 442 pts

Gloria, a citizen of the Philippines with a two-year-old legitimate child, had the following data in a calendar year:

Gross income from business	P1,000,000
Business expenses	900,0000
Gain on sale of capital asset held for 6 months	50,000
Gain on sale of capital asset held for 2 years	20,000
Loss on sale of capital asset held for 9 months	30,000
Loss from fire of capital asset (residential house) held for 6 months	40,000

The taxable income for the year would be:

Group of answer choices

P130,000

P0

P140,000

P100,000

Flag question: Question 45

Question 452 pts

Which is false involving optional standard deduction of an individual taxpayer?

Group of answer choices

It is 40% of the gross sales or receipts of an individual taxpayer.

The taxpayer must signify his intention to avail of OSD when he/she files his 1st quarterly income tax return.

The choice is irrevocable for the entire taxable year.

The individual taxpayer must submit audited financial statements to the BIR.