ReSA - THE REVIEW SCHOOL OF ACCOUNTANCY

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INSTRUCTIONS: Select the correct answer for each of the questions. Mark only one answer for each item by shading the box corresponding to the letter of your choice on the answer sheet provided. STRI... CTLY NO ERASURES ALLOWED. Use pencil no. 2 only. 1. Which of the following is not a nonresident citizen? D a. A citizen of the Philippines who establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside therein. b. A citizen of the Philippines who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for employment on a permanent basis. c. A citizen of the Philippines who works and derives income from sources abroad and whose employment thereat requires him to be physically present abroad most of the time during the taxable year. d. A citizen of the Philippines who goes on a business trip abroad and stays therein most of the time during the year. 2. First statement: The husband and wife shall compute their individual income tax separately based on their respective total taxable income. Second statement: If any income cannot be definitely attributed to or identified as income exclusively earned or realized by either of the spouses, the same shall be divided equally between the spouses for the purpose of determining their respective taxable income. A a. Both statements are correct b. Both statements are incorrect c. Both statements are incorrect d. Only the second statement is correct 3. Which of the following is not subject to tax as a corporation? D a. Business partnerships b. Joint stock companies c. Insurance companies d. General professional partnership 4. First statement: All corporations, whether domestic or foreign, shall be taxed at 20% effectively July, 2020 if their net tax taxable income does not exceed P5,000,000 and their total assets do not exceed P100,000,000. Second statement: Effective January 1, 2021, non-resident foreign corporations shall be taxed at 25% on their net income from sources within the Philippines. B a. Both statements are correct b. Both statements are incorrect c. Only the first statement is correct d. Only the second statement is correct 5. One of the following is not a requisite of a taxable income. D a. There must be gain. b. The gain must be realized or received. c. The gain must not be excluded by law from taxation. d. The gain must be that of resident or nonresident citizen. 6. A property was received as donation from Charlwin when its fair market value was P300,000. Charlwin in turn received this property as donation from Jose when its fair market value was P350,000. This property was purchased by Marceliano for P200,000 and was donated to Jose. The property was sold for P500,000. How much gain (loss) shall be recognized from the sale? A a. P300,000 b. P200,000 c. P150,000 d. None of the choices 7. If an individual performs services for a creditor who in consideration thereof cancels the debt, the cancellation of indebtedness may amount to a: D a. gift. b. capital contribution. c. donation inter vivos. d. payment of income. A+ Page 2 of 14 0915-2303213  resacpareview@gmail.com TAXATION ReSA Batch 43 - May 2022 CPALE Batch 09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam 8. It is important to know the source of income for tax purposes (i.e., from within and without the Philippines) because: A a. some individuals and corporate taxpayers are taxed on their worldwide income while others are taxable only upon income from sources within the Philippines. b. the Philippines imposes income tax only on income from sources within. c. some individual taxpayers are citizens while others are aliens. d. export sales are not subject to income tax. 9. Gains, profits and income from the sale of real property are from sources within the Philippines if: A a. the real property sold is located in the Philippines. b. the real property is sold in the Philippines. c. the real property sold is located outside the Philippines. d. the real property sold is owned by a resident citizen. 10. The term “capital asset” includes: B a. stock in trade or other property included in the taxpayer’s inventory. b. real property not used in the trade or business of taxpayer. c. property primarily for sale to customers in the ordinary course of his trade or business. d. property used in the trade or business of the taxpayer and subject to depreciation. 11. The widow of your best friend has just been paid P1,000,000 on account of the life insurance policy of the deceased husband. She asks you whether she shall declare the amount for income tax purposes or for estate tax purposes. First advice: The proceeds of the life insurance paid to the beneficiary upon the death of the insured are exempt from income tax and need not be declared for income tax purposes. Second advice: The proceeds of life insurance will have to be declared for estate tax purposes if the designation of the beneficiary is revocable, otherwise, they need not be declared. A a. Both advices are right b. First advice right; second advice wrong c. Both advices are wrong d. First advice wrong; second advice right 12. Ms. Elisya Montenegro entered her short story in a literary contest. She won in the Short Story category, and received P500,000 for her prize. What was the tax consequence of the literary prize? B a. Exempt from income tax b. Subject to final withholding tax c. Subject to Section 24 (A) d. Not subject to any internal revenue tax 13. Under this system, the amount of income tax withheld by the withholding agent is constituted as a full and final payment of the income tax due from the payee on the said income. B a. Creditable withholding tax b. Final withholding tax c. Global tax system d. Schedular tax system 14. Which of the following passive income is not subject to 20% final withholding tax. As a general rule, which of the following passive income of resident citizen? D a. Interest from any peso bank deposit b. Yield or any other monetary b [Show More]

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