09/15/12

FINAL PRE-BOARD EXAMINATION

September 15, 2012
A, through insidious words and machinations made B to sign a promissory note which
reads I promise to pay A or order P10,000. Sgd. B. Then A negotiated the note to C by
qualified indorsement and C to D by blank indorsement then D to E by delivery, then E
to F also by delivery then F to G by special indorsement, then G to H by qualified
indorsement, then H to I by facultative indorsement where H waived the notice of
dishonor, then I to J by conditional indorsement, then J to K by restrictive indorsement.
1. If the indorsement note is in the hand of A, which of the following is correct?
a. The promissory note is not valid, but A can collect from B because it is
negotiable
b. The promissory note is negotiable and valid hence A can collect from B
c. The promissory note is negotiable but not valid hence A cannot collect from
B
d. The promissory note is valid and negotiable but A cannot collect from B
2. If the
a.
b.
c.
d.

promissory note is in the hands of C, which of the following is correct?

C can collect from B, if C is a holder in due course
C can collect from B whether or not C is a holder in due course
C can collect from A provided C is a holder in due course
C can collect from B but not from A because A is a qualified indorser

3. If the promissory note is in the hands of D which is not correct?

a. D can collect from B if C is a holder in due course even if D is a holder for
value
b. D can collect from either A or C if B will not pay
c. D can collect from C but not from A if B will not pay
d. D can collect from A even if D is a holder for value if B will not pay
4. If the
a.
b.
c.
d.

promissory note is in the hands of E, which is correct?

E can collect from A or C but not from D if B will not pay
E is a holder even if D did not indorse the note, hence E can collect from B
E can collect from D but not from C if B will not pay
B is liable to E even if E is only a holder for value, if D is a holder in due
course

5. If the
a.
b.
c.
d.

promissory note is in the hands of F, which is not correct?

F can collect from C or E but not from A or D if B will not pay
F may further negotiate the note either by indorsement or by mere delivery
A, C and E but not D are liable to F if B will not pay
B is liable to F if F is a holder in due course even if E is only a holder for
value

6. If the promissory note is in the hands of G, which of the following is correct?

a. G may further negotiate the note only by indorsement and not by merely
delivery
b. G may strike out the indorsement of A but all indorsers subsequent to A are
also discharged
c. G can collect from A or C or D or E or F if B will not pay
d. G can collect from C or F but not from A or D or E if B will not pay
7. If the
a.
b.
c.
d.

promissory note is in the hands of H, which of the following is not correct?

A and G as qualified indorsers are not liable to H
D and E are not liable to H
C and F are liable to H even if H is only a holder for value
B is liable to H if H is a holder in due course

8. If the promissory note is in the hands of I, which of the following is correct?

a. If I is a holder for value, but H is a holder in due course, B is liable to I
b. All indorsers are liable to I except the qualified indorsers
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c. The qualified indorsers and the persons who negotiated by mere delivery
are not liable to I
d. I can strike out the indorsement of G because G is not liable to I
9. If the
a.
b.
c.
d.

promissory note is in the hands of J, which of the following is correct?

The instrument is no longer negotiable
B is liable to J if J fulfills the condition if J is a holder in due course
If the condition is not yet fulfilled, B cannot pay J
B is not liable to J even if J fulfills the condition

10.If the promissory note is in the hands of K, which of the following is correct?
a. The instrument is no longer negotiable
b. The subsequent indorsement and delivery of the instrument will be
considered as assignment
c. G is not liable to K, even if K is a holder in due course
d. A, D and E are not liable to K
11.A promissory note reads I promise to pay B or order P100,000. Sgd. A. B
negotiated the note to C, then C to D, D to E, E to F, F to G, G to H, then H to E all
by special indorsements. Which of the following is correct? If A dishonors the
instrument
a. E should notify B, C, D, F, G and H to make them liable to him
b. If E notifies G and G notifies D, both D and G are liable to E
c. F, G and H are discharged because they are intervening parties
d. If E notifies C and notifies B and D, the notice given by C insures to the
benefit of E making B and D liable to E
12.Using the preceding number, if E negotiates the note to I by special indorsement,
which of the following is correct?
a. F, G and H are not liable to I if I knows that the note was previously
dishonored
b. If I is a holder in due course, all indorsers are liable to him
c. I can collect from E and E can collect from H
d. If I presents the note for payment and A again dishonors, I should notify all
the indorsers to make them liable to him
13.Using the preceding number, but I negotiates the note to G by special
indorsement, which of the following is not correct?
a. The negotiation to G is not allowed because G is an intervening party
b. G can collect from E but not from H if A will not pay
c. G can collect from F but not from I if A will not pay
d. G can collect from A even if G is not a holder in due course
14.A promissory note reads I promise to pay B or bearer P100,000. Sgd.A B
negotiated the note to C by special indorsement, then C to D by blank
indorsement, then D to E by delivery, then E to F by delivery, which of the
following is correct?
a. If F is a holder in due course, he can collect from either B, C, D, or E if A will
not pay
b. F can collect only from E if A will not pay
c. F can collect either from B, C or E but not from D if A will not pay
d. F cannot strike out the indorsement of the payee B but can strike out the
indorsement of C
15.Using the preceding number, but the note is payable to B or order, which of the
following is correct?
a. If F is a holder in due course, he can collect from either B, C, D or E if A will
not pay
b. F can only collect from E if A will not pay
c. F can collect from either from B, C or E but not from D if A will not pay
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d. F cannot strike out the indorsement of the payee B but can strike out the
indorsement of C

16.Continuing the preceding number, and F makes a special indorsement to G and G

makes a qualified indorsement to H and H makes a conditional indorsement to I,
which of the following is correct?
a. Before fulfillment of the condition, I may demand payment from A and if A
pays, As obligation is extinguished
b. Before fulfillment of the condition, I may demand payment from A and if A
refuse to pay, the note is considered as having been dishonored
c. Upon fulfillment of the condition, I can demand payment from any of the
indorsers if A dishonors the instrument
d. Upon the fulfillment of the condition, I becomes a holder and I can demand
payment from A if I is a holder in due course
17.Which of the following instrument is negotiable?
a. Pay to the order of A or B the sum of P100,000. Sgd. C and D
b. I promise to pay to the order of A or B the sum of P100,000. Sgd. C and D
c. Pay to B or order the sum of P100,000 30 days after sight. Sgd. A
d. We promise to pay A and B the sum of P100,000. Sgd. C and D
18.S sold his car to B on installment and chattel mortgage was constituted on the
car. B defaulted in two installment payments. S foreclosed the chattel mortgage
and sold the car at a public auction. If there is deficiency, can S 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
19.B borrowed P100,000 from S secured by a chattel mortgage on Bs car. The debt
is payable in installment. When B defaulted in 2 installment payments, S
foreclosed the chattel mortgage and sold the car at a public auction. If there is
excess, who is entitled to the excess?
a. S, even without stipulation
b. B, only if there is stipulation
c. S, unless there is stipulation
d. B, even without stipulation
20.B pledged his ring to S. B failed to pay his obligation. S hold the ring at a public
auction. If there is deficiency, can S recover the deficiency?
a. Yes, if there is stipulation
b. No, even if there is stipulation
c. Yes, even without stipulation
d. No, unless there is stipulation
21.Inadvertently, the SEC approved the Articles of Incorporation and Issued a
Certificate of Incorporation to Wholesome Corporation. Thereafter it was
discovered that the incorporators have not completed the required period of
residency in the Philippines. As a result, which of the following is not correct?
a. The corporation shall be considered as a de-facto corporation
b. The right to exercise corporate powers can be inquired into collaterally in
any private suit to which the corporation maybe a party
c. The corporation has no legal personality and the incorporators maybe held
personally liable for damages
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d. The Solicitor General has the right to question the validity of its corporate
existence through a quo-warranto proceedings

22.In case a managing partner collects a demandable debt from his debtor who also
owes the partnership a demandable debt, which of the following is not correct if
payment is not enough to cover the two debts?
a. The sum collected shall be applied to the partnership credit
b. It shall be applied to the two credits in proportion to their amounts
c. The debtor has the right to have the payment applied to his debt to the
partner if it should be onerous to him
d. The partner cannot apply the payment to his own credit
23.May not require stockholders approval
a. Declaration of cash dividend
b. Management contract
c. Increase of bonded indebtedness
d. Removal of a director
24.Assume that the unpaid subscription of S for 10 shares with a par value of P100
each is P400 and the expenses, interest and cost of sales amount to P50. Who is
the highest bidder if the bid are as follows
a. P400 for 5 shares
b. P450 for 6 shares
c. P450 for 7 shares
d. P400 for 4 shares
25.The following are the effects of unlawful partnership, except
a. The contract is void ab initio and the partnership never existed in the eyes
of the law
b. The profits shall be confiscated in favor of the government
c. The instruments, or tools and proceeds of the crime shall be forfeited in
favor of the government
d. The contributions of the partners shall be confiscated in favor of the
government
26.A person cannot be admitted into the partnership without the consent of
a. All the partners
b. Majority of the partners
c. 2/3 of the partners
d. Partners representing the controlling interest
27.On April 1, 2012, A and B into a contract of partnership for the purpose of buying
and selling textbooks with the former capitalist partner and the latter as industrial
partner. It was agreed that A shall contribute P100,000 to the common fund on
May 2, 2012. Upon the arrival of the designated date, A failed to deliver the
contribution he promised. As a result
a. B should make a demand upon A for the delivery of his contribution to
render A in default
b. The contract of partnership becomes void because A failed to give his
contribution to the common fund
c. B can compel A to deliver his contribution with the interest and damages
without the necessity of demand
d. The contract of partnership was never perfected because there was no
delivery of contributions by the partners
28.A, B, and C formed a limited partnership with A as general partner, B as limited
partner and C as industrial partner. A and B contributed P50,000 each. The
partnership failed and after disposing all its assets to pay partnership debts, there
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still remains a note payable in the sum of P15,000. Against whom can the creditor
demand payment of the note of P15,000
a. Only A is liable to pay the P15,000 indebtedness
b. A and B are liable to pay P7,500 each
c. A and C are liable to pay P7,500 each
d. A, B and C are liable to pay P5,000 each
29.Statement 1 A director is removed from office by a vote of the stockholders
holding or representing at least 2/3 of outstanding capital stock. The vacancy
occasioned by such removal can be filled by the vote of at least a majority of the
remaining directors if still constituting a quorum
Statement 2 Treasury shares sold for less than par or issued valued are
considered watered stock an as such are prohibited by law.
a. True, True
b. True, False
c. False, True
d. False, False
30.One of the following is a ground for the suspension or revocation of the certificate
of incorporation by the SEC
a. If the corporation has commenced its business transactions and afterwards
ceased operations continuously for a period of at least 5 years
b. If the corporation fails to commence and start to operate and the failure to
operate is due to causes beyond its control
c. If the corporation does not formally commence its business operation or
transactions within two years from date of issuance of certificate of
incorporation
d. If the corporation has commenced its operations and subsequently become
continuously inoperative for two years
31.The following are ways of enforcing payment of unpaid subscription. Which is the
exception?
a. Sale at public auction of delinquent stock
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
32.After ten years, five out of the nine incorporators who organized the corporation
and signed the articles of incorporation died. The corporation is
a. Dissolved as there will only be four left which is below the minimum of five
incorporators required by law
b. Dissolved as the Corporation Code requires that the incorporators be alive
during the operation of the business
c. Not dissolved as it still has forty years left in its term
d. Not dissolved as it enjoys the right of succession
33.A contract where the creditor acquires the right to receive the fruits of an
immovable of his debtor, with the obligation to apply them to the payment of
interest owing, and thereafter to the principal of his credit is
a. Antichresis
b. Pledge
c. Real Estate mortgage
d. Commodatum
34.May a stock certificate be issued before full payment?
Statement 1 No, in case of stock with par value
Statement 2 - Yes, in case of stock without par value
a. True, True
b. True, False
c. False, True
d. False, False
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35.Which of the following corporate acts will not require the approval of the
stockholders or of the members of the private corporation?
a. To amend the by-laws
b. To increase the capital stock
c. To invest corporate funds in another corporation or business
d. To elect the officers of the corporation
36.Delectus personae is an element of partnership which means
a. Right to choose his partners
b. Confidence and trust in his partners
c. Obligation to remain loyal to his partners
d. Distribution of profits among the partners
37.When
a.
b.
c.
d.

a real property is contributed to the partnership

A real contract is perfected
A written instrument is required
A public instrument complete with inventory is required
A partner can make important alteration if beneficial to the partnership

38.A, B, C, and D are general partners contributing P20,000, P30,000, P50,000 and
industry respectively. At the time of liquidation, the partnership is indebted to Y
for P50,000 to partner A for P30,000 and to partner B for P20,000. If the assets of
the partnership amount only to P20,000, which of the following is correct?
a. Y can collect P20,000 from the partnership and from partners A,B and C at
P10,000 each
b. After exhausting the assets of the partnership amounting to P20,000, Y can
collect from partners A, B, C and D at P7,500 each
c. Y can collect P20,000 from the partnership and P30,000 from either
partners A or B or C or D
d. If Y succeeds in collecting the P30,000 from the separate properties of the
partners concerned, partners A, B and C will be required to make additional
contribution
39.A is the listed owner of 10,000 shares with par value of P100/share in ABC
Corporation. ABC sued A for the payment of As indebtedness of P1M. A contends
that such debt must be compensated by his shares of stocks with the plaintiff
corporation. The contention of A is
a. Valid due to legal compensation
b. Valid by virtue of judicial compensation
c. Untenable since he is not a creditor of the corporation
d. Automatically extinguished if the fair market value of the share is P1M
40.In the partnership of A, B, C, and D, D was designated as the managing partner.
Ds able management prevented the firm to suffer from the economic turbulence
caused by the instability of the Philippine peso. Partners A, B and C became
jealous of Ds good name. As a result, D was capriciously and whimsically
removed as manager without a valid cause. Is the removal valid?
a. Yes, Ds removal is valid even without his consent
b. Yes, provided it is approved by all the other partners
c. No, Ds appointment is irrevocable without a just or lawful cause
d. No, D can only be removed for a valid cause with vote of the partners
owning the controlling interest

09/15/12

41.Which of the following statements is not correct?

a. When a compulsory heir is given by will less than his legitimate, the
provisions of the will should be 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 to 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
42.A stockbroker remitted P11,250 to the BIR representing collection of tax withheld
from clients. The peso volume of his stock transactions from which the tax was
withheld is
a. P93,750
b. P112,500
c. P225,000
d. P2,250,000
43.A vat taxpayer has the following data for a particular quarter during the current
year:
Sale of shares of stock:
Held as inventory
P1,000,000
Held as investment
500,000
Cost of shares sold:
Held as inventory
300,000
Held as investment (thru local stock exchange)
600,000
The stock transaction tax is
a. P0
b. P1,500
c. P2,500
d. P7,500
44.A race track bettor won on the following bets:
On double, a bet of P200 and dividend of P200 per P20 ticket
On winner take all, a bet of P500 and a dividend of P1000 per P50 ticket
On forecast, a bet of P1,000 and dividend of P100 per P20 ticket
The total percentage tax due from the winnings is
a. P682
b. P1,182
c. P1,280
d. P1,530
45.An invoice issued for the sale of vat taxable goods shows the following
Total invoice amount
P50,400
Less: Trade discount of 5%
2,520
Net
P47,880
If the vat taxpayer enjoys a partial exemption of 40% including VAT and the
amount is VAT inclusive, how much is the output tax?
a. P3,078
c. P3,447
b. P3,216
d. P3,628

09/15/12

46.In a transfer in contemplation of death, revocable transfer and transfer under a

general power of appointment, there are rules to observe to determine what
amount to include in the gross estate, which is not a rule to observe?
a. If the transfer was in the nature of a bona fide sale for an adequate and full
consideration in money or moneys worth, no value shall be included in the
gross estate
b. If there was no consideration received on the transfer as in donation intervivos, the value to include in the gross estate shall be the fair market value
of the property at the time of transfer
c. If the consideration received on the transfer was less than adequate and
full, the value to include in the gross estate shall be the excess of the fair
market value of the property at the time of decedents death over the
consideration received
d. I there was no consideration received on the transfer as in donation mortis
causa, the value to include in the gross estate shall be the fair market
value of the property at the time of the decedents death
47.For proceeds of life insurance not to constitute part of the gross estate
a. Must have been taken out by the decedent upon his life
b. Must have designated the estate of the decedent as irrevocable beneficiary
c. Must have designated a third person as, the decedents executor or
administrator as the irrevocable beneficiary
d. Must have designated a third person other than the estate, the decedents
executor or administrator as irrevocable beneficiary
48.Which of the following is not true regarding a claim against insolvent person?
a. The decedents claim is deductible in full if the debtors liabilities exceed
his remaining assets
b. The decedents claim must be included in full in the gross estate
c. The decedents claim which cannot be collected is deductible according to
the ratio of the debtors assets to liabilities
d. Claim against insolvent person is a claim against a person whose assets
are not sufficient to pay his liabilities
49.Which of the following statements is false?
a. Donations can be made to conceived and unborn children
b. The first P100,000 donation is exempted from donors tax
c. Juridical person can also make donations
d. Husband and wife can make moderate donations to each other on account
of family celebration
50.Which of the following is not directly reducing the inheritance
a. Standard deduction
b. Claims against the estate
c. Unpaid mortgage
d. Funeral expense
51.Which of the following may reduce the taxable estate but not the inheritance?
a. Funeral expense
b. Losses
c. Judicial expense
d. Family home

52.A filed his income tax return for calendar year 2007 on March 20, 2008. When is
the last day for the BIR to collect assuming A did not pay the tax due upon filing?
a. March 20, 2011
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b. April 15, 2011
c. April 15, 2013
d. March 20, 2013
53.Furthermore, assuming A filed his income tax return on April 20, 2008 and the
return is not fraudulent, when is the last day for the BIR to make an assessment?
a. April 20, 2011
c. April 20, 2013
b. April 15, 2011
d. April 15, 2013
54.Using the data above, if the BIR issued a deficiency income tax assessment on
March 10, 2010, when is the last day for the BIR to collect?
a. March 10, 2013
b. April 15, 2013
c. March 10, 2015
d. April 15, 2015
55.Which of the following is subject to VAT?
a. Importation of personal or household effects belonging to the residents of
the Philippines returning from abroad and non-resident citizen coning to
resettle in the Philippines where such goods were subjected to customs
duties
b. Importation of passenger or cargo vessel including engine, equipment and
spare parts thereof for domestic or international transport operation
c. Importation of fuel, goods and supplies by persons engaged in international
shipping or air transport operations
d. Sale of real property not primarily held for sale to customers or held for
lease in the ordinary course of business
56.Which of the following is exempt from VAT?
a. Sale of passenger or cargo vessels including engine, equipment and spare
parts thereof for domestic of international transport operation
b. Sale of professional instruments and implements wearing apparel,
domestic animals and personal household effect
c. Sale of fuel, goods and supplies by persons engaged in international
shipping or air transport operations
d. Importation by persons who are not vat registered
57.C, vat-registered person, imported machines to be used in the Philippines as
follows:
Machines
Purchase Price
Purpose
1
P100,000
Personal Use
2
200,000
Business Use
3
300,000
For Sale
The importations were subjected to 50% excise tax based on purchase price.
Machine 3 was sold for P1,000,000 (net of vat). How much is the vat paid on
importation?
a. P108,000
b. P90,000
c. P54,000
d. P36,000
58.Using the above date, the vat payable is
a. P12,000
b. P30,000
c. P106,000
d. P84,000
59.A, a VAT registered taxpayer made the following acquisition of capital goods from
VAT registered suppliers (net of vat) during the quarter;
Date
Cost
Estimated Life
July
2
P1,500,000
8 years
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10
500,000
Aug.
5
400,000
20
500,000
Sept.
10
500,000
15
600,000
The July 2 acquisition was retired in September. The input tax
a. P4,275
b. P5,500
c. P63,000
d. P240,000
60.Using
a.
b.
c.
d.

the above data, the input tax for August is

P2,583
P8,083
P108,000
P113,500

61.Using
a.
b.
c.
d.

the data in number 59, the input tax for September is

P2,450
P132,000
P178,950
P231,450

2 years
3 years
4 years
4 years
6 years
for July is

62.Tax credit for foreign tax paid is not allowed on

a. Donors tax paid by a non-resident citizen
b. Estate tax paid by a non-resident citizen
c. Estate tax paid by a resident alien
d. Income tax paid by a non-resident citizen
63.Which of the following is correct?
Decede
nt

a. Atoy
b. Boy
c. Coy
d. Doy

Gross Estate

Notic
e of
Death
YES
YES
YES

File
Estate
Tax
Return
NO
YES
YES

Needs
CPA
Certific
ate
NO
NO
NO

Car P150,000
Jewelry P200,000
Shares of stock (SMC) 0
P170,000
Agricultural land (Bulacan)
P1M

YES

YES

YES

64.One of the following is not correct

a. The estate must be valued at the time of death of the decedent
b. Real estate situated in foreign countries will be included in the gross estate
of resident alien decedent
c. The Commissioner shall have the authority to grant, in meritorious cases, a
reasonable extension not exceeding 6 months for filing the estate tax
return
d. Vanishing deduction is subject to limitation

65.One of the following is not within the powers of the Commissioner of Internal
Revenue
a. Compromise the payment of internal revenue tax on the ground of
taxpayers financial incapacity
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b. Compromise the payment of internal revenue tax on the ground that there
is reasonable doubt as to the validity of the assessment
c. Compromise criminal violation if already filled in court and those involving
fraud
d. Abate of cancel a tax liability on the ground that the cost of collection is
greater than that of the tax to be collected
66. Which of the following is a stranger to the donor? If the done is the
a. Grandfather of the donors great grandfather
b. Granddaughter of the sister of the donors mother
c. Grandson of the donors half-sister
d. Brother of the donors granddaughter
67.Statement I If the estate is settled extra-judicially, the estate tax return should
be filed within 2 years from date of death of decedent
Statement II If the estate is settled judicially, the estate tax return should be
filed within 5 years from death of decedent
Statement III The value added tax return should be filed within 25 days from
the close of the taxable month
Statement IV The donors tax return is not required if the net gift does not
exceed to P100,000
a. All statements are true
b. All statements are false
c. Only two statements are true
d. Only one statement is true
68.Spouses A and B sold their family home, a capital asset for P5,000,000. It was
acquired in 1980 at P2,000,000. The fair market value as determined by the BIR is
P6,000,000 but the fair market value as shown in the schedule of values of the
City Assessor is P5,500,000. Later, the spouses utilized P4,000,000 for the
acquisition of their new family home. The capital gains tax due is
a. P72,000
b. P60,000
c. P300,000
d. P360,000
69.Using
a.
b.
c.
d.

the above date, the cost basis of the new family home is
P4,000,000
P1,600,000
P1,000,000
P400,000

70.On August 12, 2012 A sold a land held as capital asset for P2M with a FMV of
P1.8M. A acquired the land for P1M, and at the time of sale, the property was
subject to a mortgage of P1.3M. Payments shall be P100,000 on the date of sale
and the balance shall be paid in equal monthly installments beginning Jan 1,
2013. The capital gains tax for 2012 is
a. P120,000
b. P24,000
c. P36,000
d. P48,000

71.The failure of the taxpayer to pay the tax due on the date fixed by law or
indicated in the assessment notice or letter of demand
a. Assessment
b. Delinquency
c. Deficiency
d. Distraint
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72.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
73.Which of the following statements is not correct?
a. An article subject to excise tax maybe exempt from vat
b. An article subject to excise tax maybe subject to vat
c. A tax payer may have two businesses where on is subject to vat and the
other is subject to percentage tax
d. Manufacturers and importers of goods are subject to excise tax
74.A, reported the following for the year 2012:
Gross Income
P5,000,000
Cost of sales
3,000,000
Salaries of employees, net of P100,000 withholding tax and
P50,000 SSS, Medicare and Pag-Ibig premiums contribution
800,000
Fringe benefits given to rank and file employees
300,000
Fringe benefits given to managerial employees
136,000
Representation and entertainment expenses (all business connected)
100,000
Rent expense
120,000
Donation to religious and charitable institutions
500,000
The amount that A will report as net income before exemption is
a.
b.
c.
d.

P364,500
P3,108,600
P422,100
P3,051,000

75.A insured his life for P10M. In case A dies, the proceeds of life insurance shall be
a. Excluded from the gross estate if the beneficiary is the estate, executor or
administrator whether revocable or irrevocable
b. Part of the 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
76.A, a citizen of the Philippines and a resident of Bacolod City, died on April 19,
2012. Among his gross estate are properties purchased from his father who died
on April 4, 2009. What percentage of deduction will be used in computing the
amount of vanishing deduction?
a. 20%
b. 40%
c. 60%
d. 0

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77.Which of the following is subject to scheduler donors tax rate?
a. A wedding gift given to the granddaughter of the brother of donors
grandmother
b. A wedding gift given two years after the wedding celebration to the great
grandson of the donors granddaughter
c. Anniversary gift given to the brother of the donors great grandfather
d. A birthday gift given to his mother-in-law
78.As income tax liability for 2011 was P75,000. She filed the return and paid the
total amount due but not with proper internal revenue district office on July 15,
2012. The amount payable (ignoring compromise penalty) is
a. P97,500
b. P112,500
c. P116,250
d. P131,250
79.Tax paid or incurred within the taxable year in connection with the taxpayers
profession, tradeoff business which may be allowed as deduction
a. Estate and donors tax
b. Income tax imposed by the Philippine government
c. Income tax imposed by authority of a foreign country
d. Taxes assessed against local benefits of a kind tending to increase the
value of the property assessed
80.Which of the following is not considered as transaction deemed sale?
a. Transfer, use or consumption not in the ordinary course of business of good
or properties originally intended for sale or for use in the course of business
b. Distribution or transfer to shareholders or investors as share in the profits
of the vat-registered person or to creditors in payment of debt
c. Consignment of goods if actual sale is not made within 60 days following
the date such goods were consigned
d. Retirement from or cessation of business, with respect to capital goods
existing as of such retirement or cessation

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1. ANSWERS: (September 15,

2012)
2. D
3. A
4. C
5. D
6. A
7. A
8. A
9. A
10.B
11.C
12.C
13.B
14.A
15.B
16.C
17.A
18.B
19.C
20.D
21.B

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

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

82.

83.

14

62.C
63.D
64.C
65.C
66.C
67.B
68.B
69.A
70.B
71.D
72.B
73.C
74.D
75.D
76.D
77.D
78.B
79.C
80.C
81.D

84.
85.