Select the correct answer among the choices.

1. Special deductions are actual business expenses.

a. YES

b. NO

2. Special deductions are claimable against gross sales or gross revenue.

a. YES

b. NO

3. The senior citizen discount of 20% is reported as a deduction from gross sales or gross revenue.

a. YES

b. NO

4. Sales discount granted to customers which is deducted from the gross sales to arrive at net sales is different from the sales discount of 20% granted to senior citizens or qualified PWDs.

a. yes

b. no

5. A revocable trust fund is a separate person for taxation purposes.

a. YES

b. NO

6. In a revocable trust fund, the trustor remains the owner of the properties transferred to the fund. As such, any income on the property is the taxable income of the grantor and not the trust fund.

a. YES

b. NO

7. If the business grants an actual 25% discount to senior citizens and PWDs, what is the rate of discount which the business may claim as special deduction from its gross income?

a. 20%

b. 15%

c. 10%

8. If a customer is a senior citizen and at the same time a PWD, how much discount should the customer be entitled to?

a. 20%

b. 25%

c. 40%

d. 50%

9. All goods and services purchased or being availed to by a senior citizen or a qualified PWD shall be subject to 20% discount.

a. YES

b. NO

10. If a senior citizen ordered two meals from Jollibee, one for him and one for his grandchild, which meal should be entitled to the discount?

a. both meals

b. only the meal pertaining to the senior citizen

11. Special deduction for additional compensation for a senior citizen employee-

a. 10%

b. 15%

c. 20%

d. 25%

12. Special deduction incentive under the Adopt-A-School program applies only to donations granted to public schools in the poorest provinces.

a. YES

b. NO

13. An individual taxpayer donated to a public school and complied with all requirements under the Adopt-a-School program. This program is identified as a priority program of the government. The taxpayer shall recognize his ACTUAL donation as-

a. a regular itemized deduction from gross income

b. a special itemized deduction from gross income

14. An individual taxpayer donated to a public school and complied with all requirements under the Adopt-a-School program. This program is identified as a priority program of the government. The taxpayer is entitled to an ADDITIONAL tax deduction incentive of-

a. 100% of the actual donation

b. 50% of the actual donation

c. 25% of the actual donation

15. In the previous question, the additional tax deduction incentive shall be presented as-

a. a regular itemized deduction from gross income

b. a special deduction from gross income

16. It pertains to the excess of allowable deductions over the gross income from business or profession.

a. Net operating loss

b. NOLCO

17. It pertains to the amount of operating loss allowed by law to be carried over as deduction against available net income in the following 3 years.

a. Net operating loss

b. NOLCO

18. Who may avail of NOLCO as a deduction from gross income?

a. individuals only

b. corporate taxpayers only

c. both individual and corporate taxpayers

19. Which is the formula in computing NOLCO

a. gross income less regular itemized deductions

b. gross income less allowable deductions excluding special deduction incentives under special c. c. laws and NOLCO from prior years

20. A taxpayer which is enjoying a tax holiday (tax exemption) in the year it incurred the operating loss cannot avail of the benefit of NOLCO.

a. yes

b. no

21. If there is a substantial change in the ownership of the business, the net operating losses in prior years cannot be carried over in the current year when there is a substantial change in ownership of the business.

a. YES

b. NO

22. Net operating loss may only be carried over as NOLCO for 3 consecutive years after the year of loss.

a. YES

b. NO

23. During the pandemic brought by the COVID virus, net operating loss sustained in taxable years 2020 and 2021 was allowed by law to be carried over as NOLCO for -

a. 3 years

b. 4 years

c. 5 years