Question 1:

Fringe benefit tax is payable by the _______

1. Employer

2. Employee

3. Both employer and Employee

4. None of these

Question 2:

Which of the following assets cannot be depreciated?

1. None of these

2. Machineries

3. Land

4. Building

Question 3:

Which of the following statements is correct?

1. Cost of demolishing old building in an acquired land is expensed immediately.

2. Stock issuance costs are deductible expense

3. Acquisition-related costs of property are capitalized and depreciated over time.

4. None of these

Question 4:

Which is not subject to the P90,000 exemption threshold for a private employee?

1. Cash gift

2. 13th month pay

3. Profit sharing bonus

4. None of the above

Question 5:

Which of the following constitutes a long-term holding period?

1. None of these

2. Asset acquired on December 1, 2019 disposed on November 30, 2020

3. Asset acquired on October 21, 2019 disposed on April 20, 2020

4. Asset acquired on November 21, 2019 disposed on November 21, 2020

Question 6:

Which is a correct statement?

1. Losses between related parties are deductible

2. All of these

3. Gains between related parties are taxable

4. Gains between related parties are exempt from income tax

Question 7:

Which is not a characteristic of deductions from gross income?

1. Capital expenditure

2. Actual and necessary business expense

3. Ordinary and necessary business expense

4. Legitimate business expense

Question 8:

Properties allowed for use of managerial or supervisory employees are subject to FBT and depreciated by

1. None of these

2. 5% for real properties

3. 5% for personal properties

4. 20% for real properties

Question 9:

Which of the following items of entertainment, amusement, and recreation expenses can be claimed as deduction?

1. Entertainment expenses paid to government officials

2. Entertainment expenses for potential clients

3. Entertainment expenses not receipted in the name of the taxpayer

4. All of these

Question 10:

Which is not deductible from gross income?

1. Fringe benefits to rank and file employees

2. Salaries of managerial or supervisory employees

3. Compensation of minimum wage earners

4. Depreciation value of fringe benefits given to managerial employee

Question 11:

Which of the following is deductible?

1. Tuition fees of siblings of the taxpayer

2. Estimated losses

3. Selling expense of domestic stocks directly to buyer

4. None of these

Question 12:

Withholding tax on compensation are remitted

1. Semi-monthly

2. None of these

3. Quarterly

4. Monthly

Question 13:

Net capital loss carry-over is

1. Limited to the net income of the following year

2. Limited to individual taxpayers

3. Limited to three years

4. None of these

Question 14:

For individual taxpayers, what percentage of the capital gain or loss is considered for capital asset held for 12 months?

1. 50%

2. 100%

3. 25%

4. None of these

Question 15:

Which is not a supplemental compensation income?

1. De minimis benefits

2. Honoraria

3. Allowances

4. Bonuses

Question 16:

Which of the following is not a characteristic of fringe benefits?

1. FBT is a grossed-up tax

2. None of these

3. FBT is a creditable withholding tax

4. FBT is due quarterly

Question 17:

Fixed allowances are part of:

1. Regular compensation income

2. None of these

3. 13th month and other benefits

4. Supplemental compensation income

Question 18

Which of the following is a benefit subject to fringe benefit tax?

1. Business class ticket of the employee on foreign business travel

2. Inland travel expenses of the employee while on vacation

3. Up to $300 per day lodging cost of employee on foreign business travel

4. None of these

Question 19:

Foreign income taxes paid abroad can be claimed as

1. None of these

2. Deduction from gross income subject to limit

3. Deduction from gross income in half

4. Deduction from gross income in full

Question 20:

Which of the following statements is correct?

1. Wages of laborers may be deductible as cost of sales

2. Only the salaries of administrative employees are deductible

3. None of these

Question 21:

Wagering losses are deductible in

1. Up to the extent of wagering transactions

2. To the extent of capital gains

3. Treated as deferred charge and amortized over 5 years

4. Full

Question 22:

Which of the following are proper valuation of monetary value?

1. For all benefits received in cash, the monetary value is the amount paid for in cash

2. Benefits that are given in the form of free use are depreciated over 5 years

3. The monetary value of benefit received in kind is the fair value or assessed value of the thing given, whichever is higher

4. None of these

Question 23:

Which is a correct de minimis benefit?

1. CBA of P12,000

2. None of these

3. Rice subsidy of P30,000 a year

4. Laundry allowance of P3,600 a year

Question 24:

Holding period

1. None of the above

2. Applies to both capital and ordinary gains

3. Applies to neither capital nor ordinary loss

4. Applies to capital losses only

Question 25:

Which is a capital asset?

1. Inventory of securities

2. Office building

3. None of these

4. Parking lot