NAME:

1. Statement 1 - A CPA and a Lawyer may form a general co-ownership to sell law and accounting books.
Statement 2 - Partnerships and Corporations have separate juridical personalities distinct from the owners, as such partners
and stockholders are not liable to creditors of the business.
a. True; true
b. False; false
c. False; true
d. True; false

2. Statement 1 - The general professional partnership may claim itemized deductions in computing its net income and a partner
may also claim itemized deductions in computing his net income.
Statement 2 - The general professional partnership may claim the optional standard deduction in computing its net income while
a partner may claim itemized deductions in computing his net income.
a. True; true
b. True; false
c. False; true
d. False; false

3. Statement 1 - The general professional partnership. may claim itemized deductions in computing its net income while a partner
may claim the optional standard deduction in computing his net income.
Statement 2 - The general professional partnership may claim the optional standard deduction in computing its net income and
a partner may also claim the optional standard deduction in computing his net income
a. True; true
b. True; false
c. False; true
d. False; false

4. The net share received by a partner in a general professional partnership is

a. Part of his taxable income.
b. Exempt from income tax
c. Subject to 10% creditable withholding tax
d. Subject to final tax

5. The net share received by a partner in a general co-partnership is

a. Part of his taxable income
b. Exempt from income tax
c. Subject to 10% creditable withholding lax
d. Subject to final tax

6 – AB partnership with A and B as partners (both, resident citizens') had a net-professional income amounting to P500,000 for
2018, Its other income included bank interest income of P8,000, net of final withholding tax and royalty income of P10,000, net
of the final withholding tax.

A is single and has his own separate eatery business. In 2018, his business had net sales of P1,000,000, cost of sales of
P500,000 and operating expenses of P300,000.

7. The net share of A in the income of the GPP

a. Php250,000 c. Php225,000
b. Php259,000 d. Php233,100

8. The net taxable income and income tax payable of A who shares profit and loss equally with B in their x GPP is:
a. P450,000; P16,600
b. P400,000; P10,450
c. P439,000; P9,670
d. None of the above.
9. Using the preceding number but it is a business partnership the taxable income of the partnership is
a. P518,000
b. P500,000
c. P510,000
d P508,000

10. Using the preceding number, the net distributable share of B (resident citizen) is
a. P162,500
b. P157,500
c. P165,600
d. P154,350

11. During 2018 taxable year, First Metro Pacific was able to persuade Francis to join the company as its Asst. Vice-President for
Finance which included a car plan worth P3,000,000 in its compensation package. First Metro purchased the vehicle and
registered the same in favor of Francis. Assuming further that Francis is a non-resident alien not engage in trade or business, how
much, is the fringe benefit tax?
A. P529,412
B. P1,411,765
C. P1,615,385
D. P1,000,000

12. Which of the following statements is correct?

I. Fringe benefit is a form of pay which may be in the form of property, services, cash or cash equivalent to supplement a stated
pay for the performance of services under an employee-employer relationship.
II. Fringe benefits subject to fringe benefit tax cover only those fringe benefits given or furnished to a managerial or supervisory
employee.
III. FBT is a final tax imposed on the employee withheld by the employer, computed based on the monetary value of the fringe
benefit.
IV. FBT is an income tax. Accordingly, the one liable under the law to pay the fringe benefit tax is the employee.
V. Fringe benefits subject to FBT shall be included in the income tax return of the employee.
A. I and II only
B. I, II and IV only
C. All of the above
D. None of the above

13. Mike, a resident citizen taxpayer owns a property converted into apartment units with a monthly rental of P10,000 per unit.
He subsequently sold the property to Leomar, a resident alien taxpayer. The sale shall be subject to:
A. 6% Capital gains tax
B. Basic income tax
C. 6% capital gains tax or basic income tax at the option of Mike
D. 6% capital gains tax or basic income tax at the option of Leomar

14. Statement 1: The determination of 6% capital gains tax on sale of real property is based on net capital gains realized by the
seller of real property.
Statement 2: Except for certain passive income, a nonresident alien not engaged in trade or business shall be taxed at 25% of his
gross income derived from sources within the Philippines
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect

15. Bryan sold the following shares of stock of domestic corporations which he bought for investment purposes':
Listed and Traded Not Listed and Traded
Selling price 250,000 143,680
Selling expense 12,000 3,680
Cost 118,000 80,000
Determine the capital gains tax assuming the sale was made in 2018
A. P9,000
B. P9,552
C. P21,552
D. P27,000

16. In the year 2018, Bank of Philippine Archipelago Inc. paid for the quarterly rental of a residential house of its branch manager,
Mr. Tolentino, amounting to P68,000. Hlow much is the fringe benefit tax?
A. P16,000 C. P36,615
B. Pl.l,333 D. P18,308

17. Bangko ng Ginto Inc. bought a residential property on installment for the use of its Comptroller. The total amount paid by the
Bank is P5,500,000, inclusive of 10% interest. The fair market value of the property per Tax Declaration is P6,000,000 while the
zonal value is P5,236,000. How much is the fringe benefit tax?
A. PI,294,118 C. 74,038
B. P67,308 D. P58.824

18. Based on the preceding number, assuming the ownership over the property will be transferred to the Bank's Comptroller,
how much is the fringe benefit tax?
A. P2,823,529 C. P2,464,000
B. P2,819,385 D, P2,352,941

19. In 2018, Jana Corporation purchased a residential house and lot for P2,3OO,000. The property was later sold to its General
Manager for PI,980,000. The fair market value per Assessor's Office is P2,200,000 while the zonal value Is P2,100,000. How much
is the fringe benefit tax?
A. PI03.,529 C. P118,462
B. P56.471 D. NIL

20. Mikaela Flower Shop Inc. purchased a, motor vehicle for the use of its manager, Mike. It was
registered under Mike's name. The cost of the vehicle was P400,000. The vehicle will both partly used for the benefit of the
Company. How much is the fringe benefit tax?
A. PI83.235 C. P37,647
B. P94, 118 D. 215,385

21. The aspects of taxation are

a. Legislative in character
b. Executive in character
c. Shared by the legislative and executive departments
d. Judicial in character

22. Taxation as distinguished from police power and power of eminent domain
a. Property is taken to promote the general welfare
b. May be exercised only by the government
c. Operates upon the whole citizenry
d. There is generally no limit as to the amount that may be imposed

23. I. There can only be a tax if there is a law imposing the tax.
II. The power to tax may include the power to destroy
a. True, true
b. True, false
c. False, true
d. False, false

24. The following statements correctly described the power of the State to tax, except
a. It is a power inherent in every sovereign state to imposed a charge or burden upon persons, properties or rights to raise
revenues for the use and support of the government and to enable it to discharge its functions.
b. The State can exercise the power of taxation only if it is expressly mentioned in the Constitution.
c. It passes a legislative undertaking through the enactment of laws by the Congress which will be implemented by the Executive
Branch of the government through its Bureau of Internal Revenue to raise revenue for the inhabitants in order to pay the
necessary expenses of the government.
d. It is a way of collecting and apportioning the cost of government among those who are privileged to enjoy its benefits.

25. The following are the differences between the Power of Taxation and the Power of Eminent Domain, except:
Power of Taxation Power of Eminent Domain
a. Enforced proportionate contribution Property to be taken is
for public use
b. Government has no obligation to pay Gov't is a debtor of the
property taken
c. It operates in a community It operates on an individual
d. Attribute of sovereignty Fundamental power

26. Which of the following may not raise money for the government?
a. Power of taxation
b. Police power
c. Power of eminent domain
d. Privatization of government's capital assets

27. The existence of the government is a necessity and that the state has the right to compel all individuals and property
within its limits to contribute
a. Basis of taxation
b. Situs of taxation
c. Scope of taxation
d. Theory of taxation

28. After having been informed that most of the massage parlors in the city are being used as fronts for prostitution, the
Sanguniang Panlungsod of Manila passed a tax ordinance subjecting massage parlors within its jurisdiction to such "onerous
taxes" that leave them no other alternative but to stop operating. The passage of the ordinance is a valid exercise of-
a. Taxation
b. Police power
c. Eminent domain
d. Police power and power of taxation

29. The tax law must be capable of convenient, just and effective administration
a. Theoretical justice
b. Fiscal adequacy
c. Administrative feasibility
d. Rule of apportionment

30. A tax must be imposed for a public purpose. Which of the following is not a public purpose?
a. National defense
b. Public education
c. Improvement of sugar industry
d. None of the choices