Test Bank – Income Tax (ballada)
Chapter I
1.Tax law, in general, is composed of three elements, except
A. The Code
B. Decisions of various courts that hear tax cases.
C. Regulations and rulings
D. Ordinances
2. Sources of tax laws:
1. Constitution
2. Statutes and Presidential Decrees
3. Revenue Regulations by the Department of Finance
4. Rulings issued by the Commissioner of Internal Revenue and Opinions by the
Secretary of Justice
5. Decisions of the Supreme court and the Court of Tax Appeals
6. Provincial, city , municipal, and barangay ordinances subject to limitations set forth
in the Local Government Code
7. Treaties or international agreements the purpose of which is to avoid or minimize
double taxation.
A. 1, 2, 5 & 6 C. 1, 2, 3, 4, 5 and 6
B. 1, 2, 3, 4 & 5 D. 1, 2, 3, 4, 5, 6 & 7
3. National taxes includes:
1. Income taxes 5. Excise tax
2. Estate and donor’s taxes 6. Documentary stamp tax
3. Value-added tax 7. Real property tax
4. Other percentage tax 8. Professional tax
A. 1, 2, 3, 4, 5 and 6 C. 1, 2, 3, 5, 6, 7 & 8
C. 1, 2, 3, 5, 6 and 8 D. 1, 2, 3, 4, 5, 6 & 7
4.Local taxes include:
1. Real property tax 4. Community tax
2. Business taxes fees and charges 5. Tax on banks and other financial
3. Professional tax institutions
A. 1, 2, 3, 4 & 5 C. 2, 3, 4 & 5
B. 1, 2, 3 & 4 D. 1, 2, 3 & 4
5.I. Revenue law is a law passed for the purpose of authorizing the levy and collection of
taxes in some form to raise revenue.
II- Internal revenue laws are either political or penal in nature although there are penalties in
case of violations.
A. True; True C. True ; False
B. False; True D. False; False
, 6.I. For married individuals, the husband and wife shall compute separately the tax due on their
respective taxable income.
II. If any income cannot be definitely attributed to or identified as income exclusively earned
or realized by either spouses, the same shall be divided in any ratio between the spouses for
the purpose of determining their respective taxable income.
A. True; True C. True ; False
B. False; True D. False; False
7.I. In computing for the taxable income, fraction of a peso is disregarded.
II. For the tax due, a fraction amounting to fifty centavos or more is rounded off to a peso,
while a fraction amounting to less than fifty centavos is disregarded.
A. True; True C. True ; False
B. False; True D. False; False
8.I. Total family income includes primary income and other income from sources received by
all members of the nuclear family.
II. A single person living alone is considered as a nuclear family.
III. For married taxpayers, both spouse are entitled to claim for additional exemption.
A. True; True; False C. True ; False; True
B. False; True; True D. False; False; True
8.Allowable deductions from business income includes:
1. Basic personal and /or additional exemptions.
2. Premium payments on health and/or hospitalization insurance
3. Itemized deductions under the Tax Code
4. Optional Standard Deduction.
A. 1, 2, 3, & 4 C. 1, 3 & 4
C. 1, 2 & 3 D. 1, 2 & 4
9.I- If the employee should have additional dependents during the taxable year, he may claim
not claim the corresponding additional exemption in full for such year.
II - If the taxpayer dies during the taxable year, his death shall affect the amount of personal
and additional exemptions his estate may claim.
III – If the spouse dies or any dependents dies or if any such dependent marries, becomes
twenty-one years of age, or gets gainfully employed during the taxable year, the taxpayer may
still claim the same exemption as if the change occurred at the end of the year.
A. True; True; False C. True ; False; True
B. False; True; True D. False; False; True
10. Passive income includes the following
1. Interests 4. Cash and/or property dividends
2. Royalties 5. Sale of real property
Chapter I
1.Tax law, in general, is composed of three elements, except
A. The Code
B. Decisions of various courts that hear tax cases.
C. Regulations and rulings
D. Ordinances
2. Sources of tax laws:
1. Constitution
2. Statutes and Presidential Decrees
3. Revenue Regulations by the Department of Finance
4. Rulings issued by the Commissioner of Internal Revenue and Opinions by the
Secretary of Justice
5. Decisions of the Supreme court and the Court of Tax Appeals
6. Provincial, city , municipal, and barangay ordinances subject to limitations set forth
in the Local Government Code
7. Treaties or international agreements the purpose of which is to avoid or minimize
double taxation.
A. 1, 2, 5 & 6 C. 1, 2, 3, 4, 5 and 6
B. 1, 2, 3, 4 & 5 D. 1, 2, 3, 4, 5, 6 & 7
3. National taxes includes:
1. Income taxes 5. Excise tax
2. Estate and donor’s taxes 6. Documentary stamp tax
3. Value-added tax 7. Real property tax
4. Other percentage tax 8. Professional tax
A. 1, 2, 3, 4, 5 and 6 C. 1, 2, 3, 5, 6, 7 & 8
C. 1, 2, 3, 5, 6 and 8 D. 1, 2, 3, 4, 5, 6 & 7
4.Local taxes include:
1. Real property tax 4. Community tax
2. Business taxes fees and charges 5. Tax on banks and other financial
3. Professional tax institutions
A. 1, 2, 3, 4 & 5 C. 2, 3, 4 & 5
B. 1, 2, 3 & 4 D. 1, 2, 3 & 4
5.I. Revenue law is a law passed for the purpose of authorizing the levy and collection of
taxes in some form to raise revenue.
II- Internal revenue laws are either political or penal in nature although there are penalties in
case of violations.
A. True; True C. True ; False
B. False; True D. False; False
, 6.I. For married individuals, the husband and wife shall compute separately the tax due on their
respective taxable income.
II. If any income cannot be definitely attributed to or identified as income exclusively earned
or realized by either spouses, the same shall be divided in any ratio between the spouses for
the purpose of determining their respective taxable income.
A. True; True C. True ; False
B. False; True D. False; False
7.I. In computing for the taxable income, fraction of a peso is disregarded.
II. For the tax due, a fraction amounting to fifty centavos or more is rounded off to a peso,
while a fraction amounting to less than fifty centavos is disregarded.
A. True; True C. True ; False
B. False; True D. False; False
8.I. Total family income includes primary income and other income from sources received by
all members of the nuclear family.
II. A single person living alone is considered as a nuclear family.
III. For married taxpayers, both spouse are entitled to claim for additional exemption.
A. True; True; False C. True ; False; True
B. False; True; True D. False; False; True
8.Allowable deductions from business income includes:
1. Basic personal and /or additional exemptions.
2. Premium payments on health and/or hospitalization insurance
3. Itemized deductions under the Tax Code
4. Optional Standard Deduction.
A. 1, 2, 3, & 4 C. 1, 3 & 4
C. 1, 2 & 3 D. 1, 2 & 4
9.I- If the employee should have additional dependents during the taxable year, he may claim
not claim the corresponding additional exemption in full for such year.
II - If the taxpayer dies during the taxable year, his death shall affect the amount of personal
and additional exemptions his estate may claim.
III – If the spouse dies or any dependents dies or if any such dependent marries, becomes
twenty-one years of age, or gets gainfully employed during the taxable year, the taxpayer may
still claim the same exemption as if the change occurred at the end of the year.
A. True; True; False C. True ; False; True
B. False; True; True D. False; False; True
10. Passive income includes the following
1. Interests 4. Cash and/or property dividends
2. Royalties 5. Sale of real property
