09/17/11

FINAL PREBOARD EXAMINATION

September 17, 2011
1. Which of the following is not correct?
a. A check must be presented for payment within a reasonable tie after its
issue or the drawer will be discharged for liability thereon
b. Where a check is certified by the bank on which it is drawn, the certification
is equivalent to acceptance
c. Where the holder of a check procures it to be certified or accepted, the
drawer and all indorsers are discharged for liability thereon
d. A check of itself does not operate as an assignment of any of the funds to
the credit of the drawer with the bank, and the bank is not liable to the
holder unless and until it accepts or certifies the check
2. Where a promissory note is drawn payable to the order of the maker, which of the
following statements is not correct?
a. The maker must sign as such maker and must sign it again as indorser to
complete the instrument
b. If the note is delivered by the maker to another without indorsement, the
transferee cannot recover from the maker
c. The note is not complete until indorsed by the maker
d. If there is no indorsement yet by the maker, the transferee will not be able
to negotiate the note
3.

Where a bill payable after a sight is accepted for honor, its maturity is calculated
from the date of
a. Acceptance for the honor
b. Presentment for acceptance
c. Dishonor by non-acceptance
d. Noting for non-acceptance

4.

A, B, C and D are partners contributing P20,000, P30,000, P50,000 and industry,

respectively. The partnership failed so the partners decided to dissolve the
partnership. At the sae tie of liquidation, the unpaid obligation amounted to
P100,000 distributed as follows:
To partnership, Y

Php 50,000

To partners A

40,000

20,000

If the remaining cash amounting to P10,000 was given to Y as partial payment.

Which of the
following is correct?
a.
b.
c.
d.

Y can collect P10,000 from the separate property of D

As an industrial partner, D is not liable to Y
A, B and C are liable to Y in proportion to their capital contribution
A, B and C are liable to Y at P13,333 each

5. Using the above information. If Y succeeds in collecting the deficiency from the
partners concerned, which of the following is not correct?
a. Only C will be liable to the other partners
b. A and B will not make additional contribution
c. D is entitled to get reimbursement from A, B and C
d. C will pay P35,000 to his partners

6.

A, B, C and D are partners in Y & Corp, a limited partnership contributing

P10,000, P20,000, P30,000 and P40,000, respectively. A, C and D are general
partners while B is the limited partner. The partnership failed and the partners
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decided to dissolve partnership. At the time of liquidation, the unpaid obligation
amounted to P100,000 distributes as follows:
To partnership creditor Y
To partners A
B

P50,000
30,000
20,000

If there remaining cash amounting to P20,000 was given to Y as partial payment,

which of the following is correct?
a.
b.
c.
d.

Y can collect P7,500 each from the separate properties of the partners
Y can collect P30,000 form A, or C, or D but not from B
B is not liable to Y because B is also a creditor of the partnership
Y can collect to P10,000 each from A, C and D

7.

Essential elements of pledge, EXCEPT

a. Pledgor is the absolute owner of the thing pledged
b. The person constituting the pledge has the free disposal of his property or
if he is an agent or representative, that he is legally authorized
c. The thing pledged must be placed in the possession of the creditor or of a
3rd person by common agreement
d. To bind third person there must be an affidavit of good faith

8.

Essential elements of chattel mortgage, EXCEPT

a. The object is a personal or movable property
b. The thing mortgaged is not delivered to the creditor
c. The mortgagor cannot sell without the consent of the mortgagee
d. Description of the thing mortgaged must appear in a public instrument

9.

Essential elements of real estate mortgage, EXCEPT

a. In case of foreclosure sale, the mortgagor is entitled to the excess
b. The mortgagor can sell even without the consent of the mortgagee
c. The thing mortgaged must be delivered to the creditor
d. To bind third persons it must be recorded in the Registry of Property

10. Which of the following statements is not correct?

a. If the thing pledged is returned by the pledgee to the pledger, the
obligation is extinguished
b. In sale public auction, the pledger may bid and his bid is valid even if he is
the only bidder
c. Any stipulation authorizing the pledgee to appreciate the thing pledged is
void and without effect
d. Share of stock can be the object of pledge or mortgage
11.Deliver a negotiable promissory note payable to P or order. Later, P makes a
special indorsement to A and A delivers the note to B. who is the holder?
a. B, because he is in possession of the note
b. A, because he is the indorsee
c. P, because he is the payee
d. No one can be considered as holder

12.A issued a negotiable promissory note to the order of B for P10,000 payable in 30
days after date. Later B, endorsed the note C. then X stole the note from C,
forged the signature of C and negotiated it to D, and D to E, E to F, the holder. On
maturity of the note, which of the following statement is not correct?
a. F can collect from either D or E because their signatures are genuine and
the note is operative against them
b. F can collect for A because A cannot put up forgery as his defense as his
signature is genuine
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c. F cannot collect from C because it was Cs signature which was forged
d. F cannot collect from B because B is a party prior to the forgery
13.M, J and G formed a general partnership with a capital of P100,00 and the
partners contributing 50%, 30% and 20% respectively. O has a claim of P160,00
against the partnership. If O files a suit to collect her claim, which of the following
is not correct?
a. All the partners are liable to the extent of their separate property
b. All the partners shall be liable pro-rata with all their property only after the
partnership assets have been exhausted
c. The personal liability of the partners is merely join and not solidary
d. After exhaustion of the partnership assets, M, J and G shall be liable 50%,
30% and 20% respectively of the unpaid claim
14. A person secondarily liable on the instrument is discharged, EXCEPT
a. By any act which discharged the instrument
b. By the intentional cancellation of his signature by the holder
c. By a valid tender of payment made by a prior party
d. By the discharged of a subsequent party
15.A promissory note reads I promise to pay to the order of B P1,000 on August 22,
2011. Sgd. A. Suppose A is only 16 years old which of the following is correct?
a. If B negotiates the note to C, C can enforce the note against A if C is a
holder in due course
b. If B negotiates the note to C, C can enforce the note against A even if C is
not a holder in due course
c. B cannot negotiates the note because the maker is a minor who is not
liable to any holder of the instrument
d. If B negotiates the note to C, C cannot enforce the note against A,
regardless of whether or not C, is a holder in due course
16. A, B and C are partners in a joint venture engaged in real estate and land
development. A, without the knowledge of B and C offered to sell to D all the
remaining unsold lots at a price very much higher than the prevailing market
prices. Later, A bought out B and C from the partnership and thereafter family
sold all the lots at very big profits.
Statement 1 When A bought out B and C from the partnership, the partnership
was dissolved
so B and C have no more share in the profits of the sale
Statement 2 The sale of the lots between A and D is void because it was
without the knowledge and constant of B and C
a.
b.
c.
d.

True, true
True, false
False, true
False, false

17. The following are ways of enforcing payment of unpaid subscription. Which is the
exception?
a. Sale of public auction of delinquent dividend
b. Denying delinquent stock cash dividend
c. Filing a court action to recover unpaid subscription
d. Denying delinquent stock the right to vote and be voted upon
18.A owes B P10,000 as gambling debt and A issues a promissory note to B to cover
the debt, as follows:
I promise to pay B or order P10,000. Sgd, A
Which of the following statement is correct?
a. B can collect from A because the note is negotiable
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b. B cannot negotiate the note because the consideration between a and B is
illegal
c. If B negotiates to C, a holder in due course, C can collect from A
d. A is not liable because of illegal consideration
19.A, minor issued a promissory note to B as follow:
I promise to pay B or order P10,000. Sgd, A
Which of the following statements is not correct?
a.
b.
c.
d.

The promissory note is not negotiable because the maker is a minor

B cannot collect from A because A is a minor
If B negotiates to C, a holder in due course, C cannot collect from A
If B negotiates to C, a holder for value, C cannot collect from A

20.Below are two promissory notes prepared by A:

A. I promise to pay B or order P100,000 if he will pass the CPA board
examination, Sgd A
B. I promise to pay C or order P100,000 if he kills Z. Sgd, A
Which of the following statement is correct?
a.
b.
c.
d.

Both promissory note are negotiable

Both promissory note are non-negotiable
Only the first promissory note is negotiable
Only the second promissory note is negotiable

21.Using the above facts, and both condition are satisfied, which of the following
statements is correct?
a. Both B and C can collect from A
b. Neither B or C can collect form A
c. Only B can collect from A
d. Only C can collect from A
22.Using the above facts, and B assigns the note to D, and C assigns the note to E,
which of the following statement is correct?
a. Both D and E can collect from A, if both acted in good faith
b. Neither D or E can collect from A, even if both acted in good faith
c. Only D can collect from A even if both acted in good faith
d. Only E can collect from A even if both acted in good faith

23.A and B are partners. On June 15, 2011 when the total obligation of the
partnership totals P80,000, C was admitted as a new partner. At the time of his
admission, the partnership creditors were M for P50,000 and N for P30,000. After
June 15, the partnership borrowed from O, P20,000 and P10,000 from P. On
December 15, 2011, the partnership became insolvent leaving an obligation of
P110,000 and the partnership asset amounting to P30,000. The creditors are
going after separate properties of the partners to satisfy their remaining claims.
How are the creditors claim satisfy?
Answer 1 M and N can go after the separate properties of A and B but Cs
separate properties
are not answerable to their claims.
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Answer 2 O and P can go after the separate properties properties of A, B and C
a.
b.
c.
d.

False, false
False, true
True, false
True, true

24.The following statements pertain to a voting trustee, EXCEPT

a. The representative acquired legal title to the shares
b. It is good only for the meeting for which it was intended
c. It is generally irrevocable and the representative may vote even in the
presence of the stockholder
d. The agreement giving the representative the power to vote must be duly
notarized and a copy thereof must be submitted to the SEC to be effective
and enforceable
25.The article of incorporation of ABC Corporation provides for 7 directors. In the
monthly meeting of the board of directors held on April 8, 2011 directors B, C, D
and E were present and the following resolution were approved:
A. a resolution for the purchase of a delivery truck from E trading, a sole
proprietorship owned by E
B. a resolution appointing T as the new corporate secretary where B, C, D and
E voted for the resolution
Which is correct?
a. Both resolution are valid and do not need stockholders approval
b. Both resolution are valid but need stockholders approval
c. Resolution A needs stockholders approval, Resolution E is valid
d. Resolution A is not valid, Resolution B needs stockholders approval
26.A sells to B a sony colored TV for P12,000 payable in twelve equal monthly
instalment beginning May 5, 2011 and every 5 th day of each month thereafter.
The contract provides that upon failure to pay any instalment due, the whole
balance becomes due and demandable. To secure the obligation, a chattel
mortgage over the TV set was executed. When B defaulted on the seventh and
eighth instalments, a sued B for the payment of the whole balance of P6,000. The
TV set was levied and subsequently sold at a public sale for P5,000. Can a still
recover the deficiency of P1,000 from B?
a. Yes, if there was stipulation to that effect
b. Yes, even though there was no stipulation
c. No, any stipulation allowing recovery is void
d. No, if there was no stipulation to that effect

27.M execute a promissory note for P10,000,000 payable to the order of P. M and P
had a private understanding that M is liable only for the discounted amount of
P9,500,000. P indorsed the note to A, A to B, B to C, C to D and D to H, holder. As
a result
a. M may refuse to pay H if P is a minor
b. If M dishonors the note, A may refuse to pay H on the ground that A is a
remote party
c. The indorsement made by P passed title to the instrument in favour of A
even if P is a minor
d. M is liable to H for P9,500,000 since that was the amount that he agreed
with P that he should pay

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28.A pledged his ring to B for P20,000 A failed to pay his obligation. B sold it at a
public auction for P18,000. Can B recover the deficiency?
a. Yes, even without stipulation
b. Yes, if there is stipulation
c. No, even if there is stipulation
d. No, unless there is stipulation
29.Using
a.
b.
c.
d.

the above data, if the sale is P22,000. Can A recover the excess?
Yes, even without is stipulation
Yes, if there is stipulation
No, even if there stipulation
No, if there stipulation

30.C mortgaged his car to B for P200,000. C failed to pay his obligation. B sold it at a
public auction for P180,000. Can B recover the deficiency?
a. Yes, even without is stipulation
b. Yes, only if there is stipulation
c. No, even if there stipulation
d. No, if there stipulation
31.Using
a.
b.
c.
d.

the above data, if the sale is for P220,000, can C recover the excess?
Yes, even without stipulation
Yes, only if there is stipulation
No, even if there is stipulation
No, unless there is stipulation

32.Any director of a corporation may be removed from office by a vote of

a. Majority of the members of the board
b. Majority of the outstanding capital stock entitled to vote
c. 2/3 of the stockholders of voting and non-voting shares
d. 2/3 of the outstanding capital stock entitled to vote
33.When by-laws are adopted and filed prior to incorporation, which of the following
is correct?
a. Approved and signed by all the incorporators
b. Approved by the stockholders representing at least 2/3 of the outstanding
capital stock
c. Approved by the stockholders representing at least a majority of the
outstanding capital stock
d. Approved and signed by at least 2/3 of the incorporation
34.When by law are adopted and filed after the incorporation, which of the following
is correct?
a. Submitted within one month after the filling of the articles of incorporation
with SEC
b. Approved and signed by at least a majority of the incorporators
c. Approved by the stockholders representing at least 2/3 of the outstanding
capital stock
d. Approved by the stockholders representing at least a majority of the
outstanding capital stock
35.I. A corporation commences to have a juridical personality upon the execution of
the Articles of Incorporation unless a different date is set by the incorporators.
II. A partnership begins from the moment of the execution of the partnership
contract unless a different date is set by the partners.
a.
b.
c.
d.

True, true
True, false
False, true
False, false
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36.If par value shares are now treasury shares, the following rules are applicable,
except one. The exception is
a. They shall have no voting rights as long as they remain in the treasury
b. They are not entitled to dividends
c. They may again be disposed of for a reasonable price even below par
d. They are not part of subscribed stock and not considered as outstanding
shares
37.The members of the board of directors may be given compensation by any of the
following acts, except
a. If approved by the vote of the stockholders representing majority of the
outstanding capital stock
b. If provided in the by-laws
c. If approved by the board of directors if the salary given is not more than
ten percent (10%) of the not income before income tax during the
preceding year
d. If approved by the board of directors giving them a reasonable per diem
38. The ratification of directors or trustees contract with the corporation requires
the vote of
a. Majority of outstanding capital stock of voting shares or majority of the
members entitled to vote
b. 2/3 of outstanding capital stock of voting shares or 2/3 of the members
entitled to vote
c. Majority of outstanding capital stock of voting and non-voting shares or
majority of all the members
d. 2/3 of outstanding capital stock of voting and non-voting shares or 2/3 of all
the members
39. Subscription as distinguished from purchase of stock
a. Maybe made before or after the incorporation
b. Governed by the Statute of Frauds if the price is at least P500,00
c. Can vote only on the shares he has paid
d. Does not become a shareholder until he has paid the purchase price
40. The by-laws as distinguished from the articles of incorporation
a. Submitted to the SEC before the issuance of certificate of incorporation
b. A condition precedent in the acquisition by a corporation of a juridical
personality
c. The amendment may no longer require ratification if delegated by the
stockholders to the board of directors
d. Majority of the outstanding capital stock of voting shares is required for its
ratification
41. Which of the following is subject to VAT?
a. Sale of residential lot valued at P2,000,000
b. Sale of residential house and lot valued at P2,500,000
c. Lease of residential units with a monthly rental per unit of P10,000 where
the aggregate rentals received during the year was P2,500,000
d. Lease of residential units with a monthly rental per unit of P12,000 where
the aggregate rentals received during the year was P1,500,000
42. The gross receipt of A, a lessor, from his residential units for the year, show:
Monthly Rent/Unit
No. of Units
Total
Php 9,000
5
Php 540,000
Php 10,000
5
600,000
Php 11,000
5
660,000
Php 12,000
5
720,000
The output vat is
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a.
b.
c.
d.

P165,600
P302,400
P237,600
P0

43. This miller is subject to VAT on sale of services if he is engaged in milling for
others
a. Palay into rice
b. Wheat into flour
c. Corn into grits
d. Sugar cane into raw sugar
44. For VAT purposes, the following transactions shall be deemed sale, except
a. Transfer, use or consumption in the course of business of goods or
properties originally intended for sale or for use in the course of business
b. Property dividends which constitute stock in trade or properties primarily
held for sale or lease declared out of retained earnings
c. Distribution or transfer of goods to creditors in payment of debt or
obligation
d. Consignment of goods if actual sale is not made within 60 days following
the date such goods were consigned
45. Which of the following is not a power vested in the Bureau of Internal Revenue?
a. The assessment and collection of all national internal revenue taxes, fees
and charges
b. The enforcement of all forfeitures, penalties and fines
c. The granting of tax exemption and other tax incentives to taxpayer
d. The execution of judgement in all cases decided in its favor by the Court of
Tax Appeal and the ordinary courts
46. The seizure by the government of real property to enforce the payment of taxes
to be followed by its public sale if the taxes are not voluntarily paid
a. Delinquency
b. Deficiency
c. Levy
d. Distraint
47. On April 15, 2010, A filed his income tax return for his 2009 income and paid the
tax due thereon. In 2011, A discovered that he made an overpayment in his
income tax return. He filed a written claim for refund of tax erroneously with the
CIR on October 1, 2011. On April 14, 2012, without receiving a decision on his
claim for refund, A filed in the CTA a petition for review on his claim for refund of
tax erroneously collected. Which of the following is correct?
a. The CTA did not acquire jurisdiction over the petition for review because
the appeal is premature, there being no decision yet on said claim for
refund
b. The CTAs jurisdiction is to review by appeal decisions of the BIR
Commissioner so if there is no decision, there is nothing to review
c. The CTA acquired jurisdiction over the petition since it is the right of a
taxpayer to go to the CTA with or without decision rendered by the BIR
Commissioner
d. The CTA acquired jurisdiction over the petition as the peremptory period of
2 years within which a claim for refund is about to expire and the failure of
the CIR to act on the claim is tantamount to denial of the claim
48. Which one of the following is not allowed with presumptive input tax
a. Those engaged in the manufacturing of refined sugar
b. Those engaged in manufacturing packed noodle based instant meals
c. Those engaged in the processing of canned products
d. Those engaged in pasteurizing milk
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49.DEF Corporation, due to financial incapacity requested that it be allowed to pay
its income tax liability per return for calendar year 2010, amounting to P1 million
in four(4) equal monthly instalments starting April 15, 2011. Its request has been
duly approved. The tax due for the second instalment on May 15, 2011 is
a. P250,000
b. P254,167
c. P262,500
d. P300,000
50.A filed his income tax return for calendar year 2010 on March 20, 2011. When is
the last day for the BIR to collect, assuming A did not pay the tax due upon filing?
a. March 20, 2014
b. April 15, 2014
c. April 15, 2016
d. March 20, 2015
51.A insured his life for P10M. in case A dies, the proceeds of the life insurance shall
be:
a. Excluded from gross estate if the beneficiary is the estate, executor or
administrator whether revocable or irrevocable
b. Part of gross income if the beneficiary is a third person and the designation
is revocable
c. Part of the gross estate if the beneficiary is a third person and the
designation is irrevocable
d. Excluded from gross income whether beneficiary is revocable or irrevocable
52. ABC Corporation has the following sales during the month:
a. Sale to private entities subject to 12% vat
Php
1,000,000
b. Sale to private entities subject to 0% vat
1,000,000
c. Sale to the government subjected to 5% final withholding vat
1,000,000
d. Sale of goods exempt from vat
1,000,000
The following input taxes were passed on by its vat suppliers:
i.
On taxable goods (12%)
Php
50,000
ii.
On zero rated sales
30,000
iii.
On sale to the government
40,000
iv.
On depreciable capital goods not attributable
to any specific activity (monthly amortization)
20,000
The unrecoverable input vat which maybe recognized as cost or expense
a. P70,000
b. P160,000
c. P20,000
d. P90,000
53.Using
a.
b.
c.
d.

the above data, the input vat which maybe refunded

P30,000
P50,000
P80,000
P60,000

54. The total creditable input vat

a. P100,000
b. P180,000
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c. P250,000
d. P170,000
55. A acquired his residential land in 2000 at a cost of P1,000,000. He sold the
property on January 1, 2011 with a fair market value of P5,000,000 for a
consideration of P4,000,000. Within 18 months, he purchased his new principal
residence at a cost of P7,000,000. How much is the capital gain tax?
a. P300,000
b. P240,000
c. P75,000
d. P0
56. Using the same data, except that A acquired his new principal residence at a cost
of P3,000,000. How much is the capital gain tax?
a. P300,000
b. P240,000
c. P75,000
d. P0
57. A filed his ITR for 2010 on April 15, 2011 and will pay his tax liability in
instalment. The return shows an income tax due of P100,000 and income tax
withheld of P60,000. If A pays the 2nd instalment only on October 15,2011, the
amount to be paid (excluding compromise penalty) is
a. P26,000
b. P35,000
c. P55,000
d. P37,500
58. A sold his piano, a capital asset which he purchased in 1997 at a cost of P50,000.
The term of sale show:
Downpayment
January 15, 2010 ---------P20,000
Installment payment
February 15, 2010 ---------20,000
February 15, 2011 ---------40,000
February 15, 2012 ---------40,000
A will report a taxable gain on above sales in 2010 of
a. P11,667
b. P23,333
c. P35,000
d. P70,000
59. ABC Corporation engage in freight and trucking business received the following in
2010
Share in net income of the joint venture with XYZ Corp.
P900,000
Dividend received from KLM Corp., a domestic Corp.
18,000
Dividend received from NOP Corp., a Non-resident foreign Corp.
10,000
Own net income
1,200,000
The net taxable income of ABC Corp. is
a. P1,210,000
b. P2,110,000
c. P2,210,000
d. P1,200,000

60. The total amount of income of ABC Corporation subject to final tax is
a. P1,020,000
b. P1,000,000
c. P1,018,000
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d. P0
61. Which of the following is taxable on income from within and without the
Philippines?
a. Justin Bigger, a Canadian citizen, who stayed in the Philippines for 181 days
b. Taylor Sweep, an American citizen, married to Dan Lloyd Cruz, a resident
citizen. She had been living in manila since 1999
c. Dan Delacruz, a native of Milan, Italy, now a naturalized Filipino citizen and
living in Quezon City since 2000
d. Dingdan Dantes, a Filipino citizen born in Sampaloc Manila but working as
overseas contract worker in Malaga, Spain
62.Which of the following is taxable only on estate from within the Philippines?
a. Manny Pasyal, a Filipino overseas contract worker residing in Saudi Arabia
b. Antonio Barreta, a Mexican, married to a Filipina and living in Puerto Rico
since 2005
c. Yao Ming Soo, a Taiwanese, now a naturalized Filipino citizen and living in
Japan since 2002
d. Oscar dela Hoy, an Italian professional boxer residing in the Philippines
63. The export sales amounting to Php 2,000,000 of a non-vat enterprise is
a. Exempt from vat
b. Subject to 0% vat
c. Subject to 12% vat
d. Subject to percentage tax
64.The gross estate of A includes P80,000 receivable which is duly notarized from
debtor B whose records shows:
a. Assets
P100,000
b. Indebtedness to:
i.
Government by way of taxes
40,000
ii.
A
80,000
iii.
Other creditors
20,000
The deductible claims against insolvent person is
a.
b.
c.
d.

P80,000
P29,285
P48,000
P32,000

65.Which of the following is subject to vat?

a. Sale of passenger or cargo vessels and aircraft for domestic or international
transport operations
b. Sale of agricultural and marine food products in their original state
c. Sales by agricultural cooperatives duly registered with the Cooperative
Development Authority
d. Sale of fuel, goods and supplies by person engaged in international
shipping or air transport operations

66.Statement 1 Born of a poor family in 1963, A worked his way through college.
After working for 20 years, A decided to retire in 2011 and avail of the benefits
under a very reasonable retirement plan maintained by his employers for those
who have rendered continuous service for at least 20 years. A received P1M as
retirement benefits.
Statement 2 Mrs. B, wife of a deceased employee received financial benefits
voluntarily voted upon by the Board of Directors of the employer company in
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recognition of her husbands long,loyal and dedicated service and primarily to
help her meet financial needs.
a. Both statement are subject to income tax
b. Both statement are exempt from income tax
c. Only statement 1 is a taxable income
d. Only statement 2 is a taxable income
67.XYZ corporation filed its income tax return and paid the tax due for calendar year
2008 showing a tax liability of P175,000. However, upon audit, it was discovered
that its income tax return was false or fraudulent because it did not report other
taxable income. Per investigation the correct income tax due is P350,000. The
corporation was duly informed of this finding through preliminary assessment
notice. Failing to protest on time against the preliminary assessment notice, a
formal letter of demand and assessment notice was issued on May 31, 2010
calling for payment of the deficiency income tax on or before July 15, 2010. The
amount due on July 15, 2010 is
a. P306,250
b. P437,500
c. P240,625
d. P612,500
68.ABC Corp. concluded its eight year of operation. Its fiscal year ended June 30,
2009. The net income from July 1, 2008 to June 30, 2009 amounted P1M. The
gross income for the same period is P20M. The income tax due for the taxable
period is
a. P350,000
b.P300,000
c. P325,000
d. P400,000
69.Using the above data, but the ninth year of operation from July 1, 2009 to June
30, 2010 shows a new income of P1.2M and gross income of P15M. The tax due
for the period is
a. P360,000
b. P310,000
c. P260,000
d. P285,000
70. This is not a purpose of taxation
a. To expropriate property for the promotion of the general welfare
b. To reduce inequalities of wealth
c. As protective tariff in imported goods to protect local producers against
foreign competition
d. To encourage the growth of home industries through the proper use of tax
incentives
71. During 2010, the total net amount paid for the salaries and wages amounted to
P9,000,000 after effecting the following deductions for emplyees:
SSS premiums contributions
P420,000
Philhealth premiums contributions
100,000
PAG-IBIG premiums contributions
180,000
Creditable withholding tax
300,000
In addition, the corporation provides its vice-president for opeartions P340,000
cash as fringe benefit. The allowable deduction for salaries and benefits is
a. P9,340,000
b. P10,500,000
c. P10,340,000
d. P10,000,000

72. ABC, a domestic corporation had a net income from business operations of
P200,000 before considering capital gain of P1,000,000 on a sale of land to the
National Government of the Philippines (selling price P6M, FMV is P7M and cost of
P5M). Using the best alternative available to minimize taxes, how much the total
tax liability for the year 2010?
12

09/17/11
a.
b.
c.
d.

P420,000
P360,000
P480,000
P120,000

73. Which of the following statement is not correct?

a. When a compulsory heir is given by will less than his legitime, the provision
of the will should modified in such a way that he will receive his legitime
b. The CIR may examine the bank deposit of a decedent for the purpose of
determining his gross estate even if the estate did not request for a
compromise on the ground of financial incapacity
c. The P500,000 standard deduction for medical expenses for estate tax
purposes is a legal mechanism further exempt the less privileged estate
and heirs from tax burden
d. The sharing of heirs in testamentary succession must satisfy the rules on
legitime

13

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1. ANSWERS:
2011)
2. A
3. B
4. D
5. A
6. C
7. D
8. D
9. D
10.C
11.A
12.D
13.B
14.D
15.D
16.D
17.D
18.B
19.C
20.A

(September

17,

21.B
22.C
23.C
24.D
25.B
26.C
27.B
28.C
29.C
30.B
31.A
32.A
33.D
34.A
35.D
36.C
37.D
38.C
39.B

40.A
41.C
42.A
43.D
44.B
45.A
46.C
47.C
48.D
49.C
50.C
51.B
52.D
53.D
54.C
55.B
56.A
57.A
58.C

14

59.C
60.A
61.D
62.C
63.D
64.A
65.D
66.D
67.C
68.A
69.D
70.D
71.A
72.B
73.B
74.C

75.
76.
77.