09/19/09

FINAL PRE-BOARD EXAMINATION

September 19, 2009
1. Which of the following is not a requisite to make an instrument negotiable?
a. If addressed to a drawee, he must be named or otherwise indicated therein
with reasonable certainty.
b. It must contain an unconditional promise or order to pay a sum certain in
money.
c. Where the instrument is payable to bearer, the payee must be named or
otherwise indicated therein with reasonable certainty.
d. Where the instrument is payable to order, the payee must be named or
otherwise indicated therein with reasonable certainty.
2. M, makes a negotiable promissory note payable to the order of P. P made a special
indorsement to A. A made a qualified indorsement to B, a minor. Subsequent
indorsements are from B to C, C to D, and D to E, all by special indorsement, then E
made a qualified indorsement to F. Which of the following statements is correct?
a. The indorsement made by B transfers title to C, hence B is liable as an
indorser.
b. F can hold E liable if M dishonors the instrument.
c. In case M dishonors the instrument, F can hold all indorsers liable except B.
d. The qualified indorsers A and E and minor B are not liable to F.
3. His warranty extends in favour only of the immediate transferee and to no other
holder
a. Qualified Indorser
b. General Indorser
c. Person negotiating by delivery
d. Person negotiating by blank indorsement
4. Which of the following statements pertaining to treasury shares is correct?
a. Treasury shares are not part of issued capital stock.
b. Treasury shares may not be disposed of at a price lower than the par or issued
price even if it is reasonable and approved by the board of directors.
c. Treasury shares are entitled to vote.
d. Treasury shares, once disposed of, entitle the purchaser or transferee the right
to dividends.
5. A promised to give B P1,000 if B will hear mass for ten consecutive Sundays. This is a
a. Civil obligation
b. Natural obligation
c. Moral obligation
d. Religious Obligation
6. Which of the following is not a negotiable instrument?
a. Pay to B or order P1,000 in 4 equal monthly instalments.
To: X
Sgd. A
b. Pay to B or order P1,000 and debit my account thereafter
To: X
Sgd. A
c. Pay to the order of B within 6 months from date the sum of P1,000 at 12% per
annum
To: X
Sgd. A
d. Pay to B or bearer P1,000 one year after date. If not paid when due, I agree to
pay collection and attorneys fees
To: X
Sgd. A

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7. Holder H altered the amount of a negotiable note from P10,000 to P110,000 then
negotiated the note to P. As a result,
a. If P is a holder in due course, he can require the maker to pay P110,000.
b. If P is not a holder in due course, he can require the maker to pay only the
original sum of P10,000.
c. P cannot require the maker to pay because of alteration whether or not he is a
holder in due course.
d. If P is a holder for value, he can collect P110,000 from H.
8. M issued to P, accommodated party, a negotiable promissory note for P10,000. P
indorsed it to A, A to B and B to C. Which of the following is incorrect?
a. M can collect from P, if M will pay C.
b. P may directly pay C.
c. Between M and P, M is not liable while P is principally liable.
d. P can collect from M, if P will pay C.
9. A is a maker and B is payee of a negotiable promissory note payable to order. There
is no valuable consideration for the note B delivers the instrument to C, without
indorsement, under circumstances that otherwise would have made C a holder in
due course such as, that C did not know of the absence of consideration. May C
recover from A?
a. Yes, because As personal defense cannot be used against C.
b. Yes, because the promissory note is negotiable.
c. No, because A has a real defense which can be used even against a holder in
due course.
d. No, because C acquires only Bs rights and A can set up against B the defense
of absence of consideration.
10.A is the drawer of a check. B is the payee and X is the drawee bank. Y fraudulently
gets hold of the check and forges the signature of the payee, B. Y then deposits it in
C bank. C indorses the check to X, drawee bank and collects from said X drawee
bank through the clearing house. Then Y, forger withdraws from C bank the proceeds
of the check and disappears. Which of the following is not correct?
a. The drawer A has the right to recover from collecting bank C.
b. The drawers account cannot be charged by the drawee bank.
c. The payee, B can recover from drawer A.
d. The drawee bank can recover from the collecting bank.
11. A promissory note reads I promise to pay B P100,000 on Oct. 30, 2009. Sgd. A. B
transferred the note to C. Later, X stole the promissory note and transferred the note
to Y who received the note in good faith. On maturity date, Y presented the note to A
and demanded payment. A paid the note in good faith. In this case
a. C can recover from A
b. C can recover from B
c. As obligation is extinguished
d. C can recover only from either X or Y
12.The following statements pertain to a voting trustee, except
a. The representative acquires 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.

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13.The articles of incorporation of ABC Corporation provides for 7 directors. In the
monthly meeting of the board of directors held on April 8, 2009, directors B, C, D and
E were present and the following resolutions were approved:
a. A resolution for the purchase of a delivery truck from E Trading, a sole
proprietorship owned by E. B, C, D and E voted for the resolution.
b. A resolution appointing T as the new corporate secretary where B, C, D and E
voted for the resolution.
Which is correct?
a.
b.
c.
d.

Both resolutions are valid and do not need stockholders approval.

Both resolutions are valid but need stockholders approval.
Resolution a needs stockholder approval. Resolution b is valid.
Resolution a is not valid. Resolution b needs stockholders approval.

14.An indorsement where the indorser becomes a mere assignor of the title to the
instrument
a. Special
c. Qualified
b. Blank
d. Restrictive
15.This vacancy in the board of directors may be filled by the board of directors if the
remaining directors still constitute a quorum.
a. Removal of a director
b. Death of a director
c. Increase in the number of directors
d. Expiration of the term of a director
16.M issues a promissory note payable to P or bearer. Which of the following is not
correct?
a. If indorsed by P to A and A also indorses it to B, B may negotiate the note to C
by delivery.
b. If indorsed by P to A and A also indorses it to B, P is liable to A and B.
c. If indorsed by P to A and A also indorses it to B, and B negotiates the note to C
by delivery. A is liable to B and C.
d. If P negotiates the note to A by delivery and A indorses it to B, B may
negotiate the note to C by delivery.
17. Which of the following is not correct?
a. Where the instrument is negotiated back to prior party, all intervening
indorsements are not necessary to the holders title.
b. Where the instrument is originally payable to order, the holder may not strike
out the payees indorsement.
c. The indorser whose indorsement is struck out and all the indorsers are thereby
relieved from liability on the instrument.
d. The holder may at any time strike out an indorsement which is not necessary
to his title.
18. The subscriber of shares even if not fully paid but who is not delinquent is entitled to
the following rights, except
a. Rights to receive dividends
b. Right to vote in stockholders meeting
c. Right to demand his stock certificate
d. Rights to inspect corporate books and records.

19. Statement I A majority of the number of directors or trustees as fixed in the

articles of incorporation shall constitute a quorum for the transaction of corporate
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business, and every decision of at least a majority of the directors or trustees present
at a meeting at which there is a quorum shall be valid as a corporate act, except for
the election of the officers which shall require the vote of majority of all the members
of the board.
Statement II No person convicted of final judgment of an offense punishable by
imprisonment for a period exceeding five years or a violation of the corporation code
committed within six years prior to the date of his election or appointment, shall
qualify as a director, trustee or officer of any corporation.
a. True, True
b. True, False
c. False, True
d. False, False
20. M makes and delivers a promissory note payable to the order of P. P indorses the
note to A. Later, S steals the note and negotiates the same to B by forging As
signature. Thereafter, B negotiates the note to C, C to D and D to E, a holder in due
course. Which of the following statements is correct?
a. E can hold M and P liable because their signature are genuine.
b. E cannot hold B, C and D liable because they have no participation in the
commission of the forgery.
c. E can enforce the instrument only against S, the forger
d. E can enforce the instrument against S, B, C and D but not against M, P, A.
21.To be negotiable, a check must have the following requisites, except
a. It must contain an unconditional order to pay a sum certain in money at a
fixed or determinable future time.
b. It must be in writing and signed by the drawer.
c. It must be payable to order and bearer.
d. The drawee bank must be named with reasonable certainty.
22.P, O and A are partners in an import and export business. Customers desiring to
place an order for imported articles are always required to make a deposit of 25% of
the total cost of the order. B, a regular customer, deposited P6,000 to P for his order.
P, instead of turning over the said amount to the partnership, misappropriated it. As
a result, one is not correct
a. B may institute a claim against the partnership and all the partners.
b. The personal liability of the partners is joint.
c. The partnership is bound to make good the loss where one partner acting
within the scope of his apparent authority receives money or property of a
third person and misapplies it.
d. All the partners are liable solidarily with the partnership for everything
chargeable to the partnership.
23.The duty to make disclosure, where otherwise there would be a great and unfair
relation of directors to stockholders.
a. Special Circumstances Rule
b. Trust fund theory
c. Doctrine of corporate opportunity
d. Incorporation Theory
24.Which of the following instruments is not negotiable?
a. I promise to pay P or his agent P15,000.
Sgd. A
b. I promise to pay P or his assigns P15,000. Sgd. A
c. I promise to pay to the order of myself P15,000. Sgd. A
d. I promise to pay to the order of yourself P15,000. Sgd. A

25.The drawee bank may not refuse to pay checks drawn against it even
a. If there is a stop payment issued by the drawer.
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b. If the drawer is insolvent.
c. If the drawers deposit is insufficient.
d. When the bank receives notice of the drawers death.
26.P executes a promissory note for P10,000 payable to the order of P and forges the
signature of M as maker and indorses the note to A, A to B, B to C and C to E, holder.
Which of the following statements is correct if E is a holder in due course?
a. E can collect from M
b. E cannot collect from P
c. E can collect from C but not from A or B
d. E can collect from any of the indorsers
27. Which of the following defenses may a party to an instrument avail himself of
against any holder of a negotiable instrument?
a. Want of delivery of incomplete instrument
b. Want of authority to complete a delivered instrument
c. Want of delivery of a complete instrument
d. Want of consideration of an overdue instrument
28. M makes a promissory note payable to the order of P for P5,000. After delivery to P,
P changed the amount to P50,000. Thereafter, P indorsed the note to A, A to B, B to
C, C to D and D to E. The parties subsequent to P were not aware of the alternation
made by P. Which of the following statement is correct?
a. E can hold M liable for P50,000 if E is a holder in due course
b. E can hold M liable for P5,000 if E is a holder is due course
c. E can hold M liable for any amount if E is not a holder in due course
d. E can hold A, B, C and D liable for P50,000 provided E is a holder in due course
29.A sells to B a Sony colored TV for P12,000 payable in twelve equal monthly
installments beginning May 5, 2009 and every 5 th day of each month thereafter. The
contract provides that upon failure to pay any installments 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 eight installment, 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
30.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 if owing,
and thereafter to the principal of his credit is
a. Antichresis
b. Usufruct
c. Real estate mortgage
d. Commodatum

31.A holder is a holder in due course if he has taken the instrument complete and
regular on its face and three of the following conditions, except
a. That he became the holder of the instrument before it was dishonored and
without that it had been previously dishonored if such was the fact
b. That he took it in food faith and for value
c. That there is negotiation to him before it became overdue
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d. That at the time it was negotiated to him, he had no notice of any infirmity in
the instrument or defect in the title of the person negotiating the same
32. M executed a promissory note as follows:
I promise to pay P or order P1,000,000 or to deliver my only race horse
Sgd. M
Which of the following statements is true?
a. The instrument is not negotiable
b. The obligation is a facultative obligation
c. The choice as to which prestation will be performed belongs to P
d. The obligation is extinguished if the horse is lost due to a fortuitous event
33.M executes 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 and 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 favor 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
34.On October 7, 2009, M executed an undated promissory note for P50,000 payable to
the order of P which is payable 60 days after date. Thereafter, P indorsed the note
to A, A to B, B to C, C to D and D to M. The indorsement by D to M was made on
November 8, 2009. As a result
a. M may further renegotiate the promissory note
b. M can go after P, A, B, C and D to collect
c. M may strike out the indorsement to him D
d. The promissory note is discharged
35.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
36.Using the above data, if the sale is P22,000. Can A recover the excess?
a. Yes, even without stipulation
c. No, even if there is no stipulation
b. Yes, if there is stipulation
d. No, if there is stipulation
37.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 stipulation
b. Yes, only if there is stipulation
c. No, even if there is stipulation
d. No, unless there is stipulation
38.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

39.Any director of a corporation maybe removed from office by a vote of

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a.
b.
c.
d.

Majority of the members of the board

Majority of the stockholders present
2/3 of the stockholders present
2/3 of the outstanding capital stock

40.Indorsement made by a person not otherwise a part to the instrument, who places
thereon his signature in blank before delivery
a. Qualified
b. Restrictive
c. Irregular
d. Facultative
41.Which of the following statements is not correct?
a. Compensation income of individuals that do not exceed the statutory
minimum wage is exempt from the requirement of withholding tax on
compensation
b. Compensation income of individuals that do not exceed ten thousand pesos
per month is exempt from the requirement of withholding tax on
compensation
c. Holiday pay, overtime pay, night shift differential pay and hazard pay received
by individuals shall be exempt from income tax
d. Minimum wage earners who are receiving only the statutory minimum wage
are not subject to withholding tax and consequently to income tax
ABC Corporation has the following sales during the month:
a. Sale to private entities subject to 12% VAT
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%)
50,000
ii.
On zero rated sales
30,000
iii.
On sale to the government
40,000
iv.
On sale of exempt goods
20,000
v.
On depreciable capital goods not attributable to any specific activity
(monthly amortization)
200,000
42.The unrecoverable input vat which may be recognized as cost or expense
a. P70,000 b. P160,000 c. P20,000 d. P90,000
43.Using the above date, the input vat which may be refunded
b. P30,000 b. P50,000 c. P80,000 d. P60,000
44.The total creditable input vat
a. P100,000 b. P180,000 c.P250,000 d.170,000

45.Which of the following statements is correct?

a. The monetized value of unutilized vacation leave credits of ten (10) days or
less which were paid to the employee during the year are not subject to
income tax and to withholding tax
b. The salary of an employee on vacation or on sick leave, which are paid
notwithstanding his absence from work, constitutes compensation income,
except if not more than 10 days.
c. Any amount which is required by law to be deducted buy the employer from
the compensation and is deemed to be paid to the employee as compensation
at the time the deduction is made
d. If living quarters or meals are furnished to an employee for the convenience of
the employer, the value thereof should be included as part of compensation
income
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46.On January 1, 2008, A leased his vacant lot for a period of 12 years at P240,000 per
year. It was agreed that the lessee will pay the following:
a. Rent of P480,000 (for 2008 and 2009)
b. Security deposits of P240,000
c. Real property tax at P20,000 per year
The lease contract provides among others that the lessee will construct a 3-storey
building for parking purposes at a cost of P3,600,000 which shall belong to the lessor
upon expiration or termination of the lease. The building was completed on July 1,
2008, with an estimated useful life of 15 years. A shall report for the year 2008,
using the spread-cut method, a total income from lease of
a. P296,543
b. P573,087 c. P536,521 d. P333,087
47.Using the above data, the lessee in 2008 can deduct total expenses amounting to
a. P686,521
b. P553,043 c. P416,521 d. P573,043
48.ABC had the following during the taxable year 2009:
a. Provision for bad debts
30,000
b. Contributions during the year:
1. To the government for priority activity in education
50,000
2. To the catholic church for charitable purposes
10,000
3. For public use
20,000
c. Allowance for bad debts:
1. Beginning
75,000
2. Ending
85,000
d. Accumulated depreciation on the machine
1. Beginning
80,000
2. Ending
100,000
e. During the year, ABC sold a machine acquired two years earlier. The
machine had an accumulated depreciation of P30,000.
The net income before considering a to e inclusive, amounts to P200,000. If ABC is a
sole proprietorship, owned by A, single, her net taxable income is
a. P60,000 b. P47,000

c. P40,000

d. P17,000

49.Recovery of bad debt written off by a taxpayer:

No. 1: P20,000 from accounts written off in a year which had a net income of
P200,000 before write-off. (write-off of the year was P20,000)
No. 2: P5,000 from accounts written off in a year which had a net loss before write-off
of P36,000
(write-off of the year was P5,000)
No. 3: P10,000 from accounts written off in a year which had a net income of P8,000
before write-off.
(write-off for the year was P12,000)
The Income from the bad debt recovery is:
a. P35,000 b. P20,000 c. P26,000 d. P30,000
50.What would be the allowable deduction for P10,000 contribution made by a resident
citizen to a religious organization from his P80,000 net income after contribution?
a. P10,000
b. P9,000
c. P8,000
d. P5,000
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 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
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52.What would be the amount to be deducted in the gross estate of a decedent whose
collectible sum from a debtor is P100,000 and the same debtor was subsequently
declared by the court as insolvent for having a total liabilities of P400,000 and total
properties of P80,000?
a. P100,000 b. P64,000 c. P60,000 d. P80,000
53.Which of the following properties of A who died April 19, 2008 is subject to Vanishing
Deduction?
Property 1 Car purchased 3 years ago from his father
Property 2 Land inherited from his mother in 2005 the estate tax thereon is not yet
paid
Property 3 Donation from his best friend in 2004
Property 4 Community property inherited before marriage from his grandfather
who died April 18, 2002.
Property 1
Property 2
Property 3
Property 4
a.
No
Yes
Yes
No
b.
No
No
Yes
No
c.
Yes
No
No
Yes
d.
Yes
Yes
No
No
54.A died on April 19, 2008. Some of the properties he left are the following:
Mode of
Date of
Market Value
Assets
Acquisition Acquisition Date Acquired
Death of A
Land
Donation
7-3-03
P500,000
P350,000
Car
Purchase
10-2-07
P800,000
P980,000
Other Information
The gross estate of the decedent amounts to 3,000,000.
The land was mortgaged for P50,000, which was deducted in prior estate and A
paid the same before he died.
The allowable deductions total 125,000, which includes medical expenses of
P30,000. It excludes bequest to a charitable institution in the amount of
P50,000.
The vanishing deduction is --a. P58,100 b. P57,500

c. P67,783

d. P67,083

55.On March 31, 2009, A received 100 shares of stocks with a fair value of P120 per
share as of March 31, 2009. The shares of stock were intended to pay the services
rendered by A on November 20, 2008 at which time, the fair market value was P100
per share. The par value per share is P50. The income of A is
a. P12,000 b. P10,000 c. P5,000
d. P2,500
56.Optional standard deduction
a. Is equal to 40% of the gross income from business or practice of profession
b. Cannot be used as deduction from compensation income
c. Maybe availed by all individual taxpayers
d. Maybe be availed of by the taxpayer whether or not he signifies his desire to
elect optional standard deduction
57.XYZ, a domestic corporation was determined to be improperly accumulating its
earning for the taxable year 2009 based on its records as follows:
a. Net income from business
P 1,000,000
b. Dividends actually or constructively paid
150,000
c. Income tax paid for the year
270,000
d. Income subjected to 20% final tax
60,000
e. Income exempt from tax
50,000
f. Income excluded from gross income
10,000
g. Net operating loss (2008)
100,000
The tax on improperly accumulated earnings is
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a.

P81,000 b. P75,000

c. P80,000

d. P70,000

58.In 2009, A made the following gifts;

a. On June 1, 2009, P150,000 to B, his son, on account of his marriage celebrated
on May 1,2008
b. On July 10, 2009, a parcel of land worth P180,000 to his father, subject to the
condition that the father would assume the mortgage indebtedness in the
amount of P40,000
c. On September 30, 2009, P150,000 dowry to his daughter C, on account of her
scheduled marriage on October 25, 2009, and another wedding gift worth
P20,000 on November 23, 2009.
How much is the total net gifts?
a. P500,000

b. P450,000 c.P430,000 d.P460,000

59.Real property with a cost of P300,000 and a fair market value at the time of death of
P1,000,000, but subject to a mortgage of P200,000
a. Shall be in the taxable net estate at P800,000
b. Shall be in the gross estate at the decedent equity of P800,000
c. Shall be in the gross estate at P300,000
d. Shall be in the gross estate at the owners equity P100,000
60.An individual taxpayer, single, has the following data for the current year:
Ordinary income
150,000
Long term capital gain
40,000
Short term capital loss
10,000
How much is the net taxable income
a. P180,000

b. P160,000 c. P140,000 d. P110,000

61.A acquired his residential land in 2000 at a cost of P1,000,000. He sold the property
on January 1, 2009 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 gains tax?
a. P300,000
b. P240,000 c. P75,000 d. P0
62.Using the same data, except that A acquired his new principal residence at a cost of
P3,000,000, how much is the capital gains tax?
a. P300,000
b. P240,000 c. P75,000 d. P0
63.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 a
resident alien decedent
c. The Commissioner shall have the authority to grant, in meritorious cases, a
reasonable extension not exceeding 6 months for the filing the estate tax return
d. Vanishing deduction is subject to limitation
64.A, a caregiver, in under a three year employment contract with a hospital in USA. His
wife, B and a minor child live in the Philippines. He earns P70,000 (converted) a
month. For the annual income of P840,000, A shall pay income tax
a. For the entire amount it being taxable in the Philippines
b. Of nothing because as OFW, he is considered a nonresident citizen
c. For half the full amount because the other half pertains to his wife
d. For the share of his wife because the wife is a resident citizen
65.Using the above data, if A puts 30% of his earning in dollar deposit account with a
local bank, interest income therein
a. Is taxable for the full amount at 7.5% final withholding tax
b. Of P126,000 shall be taxed at 7.5% final withholding tax
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c. Maybe exempt from income tax provided he presents proof of non-residency to
the bank
d. Of P840,000 shall be taxed at 7.5% final withholding tax
66.If the dollar deposit account above is joint (with B) with the same percentage of
earnings invested, interest income in that account
a. Is taxable for the full amount at 7.5% final withholding tax
b. Of P126,000 shall be taxed at 7.5% final withholding tax
c. Maybe exempt from income tax provided he presents proof of non-residency to
the bank
d. Of P840,000 shall be taxed at 7.5% final withholding tax
67.M married to K, left the Philippines in the middle of the year on July 1, 2009 to go to
USA and work there as a contract worker for two years, the following income were
provided as of December 31, 2009:
Philippines
USA
a. January 1 to June 30
P300,000
$10,000
b. July 1 to December 31
P100,000
$20,000
His net taxable income is (1$=P56)
a. P910,000

b. P350,000

c. P810,000

d. P250,000

68.Mabuhay Corporation organized in 2002 has the following data:

2008
2009
Sales
P1,700,000
P2,300,000
Cost of sales
1,050,000
1,425,000
Operating expenses
615,000
480,000
The income tax payable in 2008 is
a. P13,000
b. P5,250
c. P10,500
d. P12,250
69.Using the above data, the income tax payable by Mabuhay Corporation in 2009 is
a. P118,5000
b. P110,750
c. P117,750
d. P108,000
70.A filed his income tax return for the 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 b. April 15, 2011 c. April 15, 2013
d. March 20, 2013
71.Using the above data, 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 b. April 15, 2011 c. April 20, 2013
d. April 15, 2013
72.Using the above data, if the BIR issued a defiency 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

73.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
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 filed in court and those involving
fraud
d. Abate or cancel a tax liability on the ground that the cost of collection is
greater than that of the tax to be collected
74.One of the following is not the effect of failure to affix documentary stamps; the
document, instrument or paper
a. Shall not be recorded in the proper registry
b. Shall not be valid
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c. Shall not be admitted or used as evidence in court
d. Shall not be acknowledge by a notary public or other officer authorized to
administer oaths
75.Which of the following activities is not considered as engaging in trade or business?
a. Sale of more than P100,000 for 10 months
b. Sale of P8,000 per month for 12 months
c. Sale of P200,000 for 12 months
d. Sale of P10,000 per month for 12 months
76.Importation of which of the following if belonging to persons coming to settle in the
Philippines for their own use and not for sale, barter or exchange is subject to VAT
a. Wearing apparel
b. Domestic animals
c. Professional instrument and implements
d. Vehicles
77.A, resident taxpayer received the following during the taxable year:
I.
P12,000 cash received as refund of excess insurance premiums paid to an
insurance company
II.
P40,000 worth of goods as prize in Beer-Gin talent search
III.
A computer unit with a fair market value of P48,000 which was awarded to him
in recognition of his outstanding achievement in scientific research
IV.
P25,000 salary per month as an accounting supervisor
Which of the above items is (are) part of taxable income subject to graduated rates?
a. II only

b. II and IV

c. IV only

d. II, III and IV

78.The export sale of a vat registered enterprise is

a. Exempt from the vat
b. Subject to the 0% vat
c. Subject to the 12% vat
d. Subject to percentage tax
79.A filed his ITR for 2008 on April 15, 2009 and will pay his tax liability in installment.
The return shows an income tax due of P100,000 and income tax withheld of P60,000.
If A pays the 2nd installment only on October 15, 2009, the amount to be paid
(excluding compromise penalty) is
a. P26,000 b. P35,000 c. P55,000 d. P37,000
80.Using the above data, the amount due on April 15, 2009 is
a. P20,000 b. P40,000 c. P0
d. Refund of 10,000

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ANSWERS: (September 19, 2009)
1. C
21.A
2. D
22.B
3. C
23.A
4. D
24.A
5. A
25.B
6. A
26.D
7. D
27.A
8. D
28.B
9. D
29.B
10.D
30.A
11.A
31.A
12.B
32.A
13.C
33.C
14.C
34.A
15.B
35.C
16.C
36.B
17.C
37.A
18.C
38.A
19.B
39.D
20.D
40.C
81.

41.C
42.D
43.C
44.B
45.A
46.C
47.C
48.D
49.C
50.B
51.D
52.D
53.B
54.A
55.B
56.B
57.D
58.B
59.A
60.D
82.

13

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

83.