Business Law & Taxation

BUSINESS LAW & TAXATION EASY ROUND 1.

Which of the following individuals shall not be subject to the income tax under Section 24 (A)? a. Individual citizen of the Philippines residing therein; b. Individual citizen of the Philippines who residing outside the Philippines including overseas contract workers; c. Individual alien who is a resident of the Philippines; d. Individual alien who is not a resident of the Philippines.

2.

Which of the following income is not from a related trade, business or activity of a domestic proprietary educational institution? a. Income from rent of available office spaces in one of the school buildings b. Income from the hospital where medical graduates are trained for residency c. Income from the canteen situated within the school campus d. Income from bookstore situated within the school campus

3.

How much is the annual community tax for individuals? a. P 25 c. P 10 b. P 20 d. P 5

4.

Under at the a. b. c. d.

this system there is a merger of all the properties of the husband and the wife owned by them time of the celebration of the marriage, or those acquired thereafter. Conjugal partnership of gains Absolute community of properties Complete separation of properties None of the choices

5.

Which a. b. c. d.

is not an essential characteristic of tax? Limited as to amount Proportionate in character Payable in money Regular payment

6.

A contract of sale is not a a. Principal contract b. Nominate contract

7.

“I promise to pay P or his order the sum of P 10,000.00 30 days after the death of X.” This is an instrument payable: a. At a determinable future time b. On Demand c. Upon the fulfillment of a condition d. At an indefinite time, hence, non-negotiable

8.

A corporation acquires juridical personality a. Upon the filing of the articles of incorporation b. Upon the filing of the by-laws c. Upon the issuance of the certificate of incorporation d. Within 30 days from receipt of notice of the issuance of the certificate of incorporation

9.

It is the right of the mortgagor to redeem the property that was mortgaged after it was sold. a. Equity of redemption c. Right of subrogation b. Right of redemption d. Right of pre-emption

D

A

D

B

A

D

A

C

B

c. d.

Consensual contract Real contract

10. A with violence in her eyes intimidated her husband B to sell his exclusive property to her. The contract of sale is B a. Rescissible c. Unenforceable b. Voidable d. Void

Business Law & Taxation

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AVERAGE ROUND D

1.

Which of the above will be subject to a 25% civil penalty of the tax or of the deficiency tax? a. Willful neglect to file the return within the period prescribed by the Tax Code or rules and regulations b. A false or fraudulent return is willfully made c. A person who is not VAT-registered issues an invoice or receipt showing his TIN, followed by the word "VAT" d. Failure to file any return and pay the tax due thereon as required under the provisions of the Tax Code or rules and regulations on the date prescribed

2.

Which of the following statements is INCORRECT? a. The amount of “de minimis” benefits conforming to the ceiling prescribed in the Tax Code shall not be considered in determining the P30,000 ceiling of “other benefits” included in the exempt 13th month and other benefits; b. If the employer pays more than the ceiling prescribed for “de minimis” benefits, the excess shall be taxable to the employee receiving the benefits only if such excess is beyond the P30,000 ceiling. c. Any amount given by the employer as benefits to its employees, whether classified as de minimis or fringe benefits, shall constitute as deduction upon such employer; d. Representation and transportation allowance which are fixed in amounts and regularly received by the employees as part of their monthly compensation shall be treated as taxable fringe benefits if received by managerial and supervisory employees.

3.

Jose Josue qualified as head of a household for 2007 tax purposes. Mr. Josue’s 2008 gross income was P200,000 inclusive of P10,000 short term capital gain. Mr. Josue had a long-term loss of P8,000 in 2008. What amount of this capital loss could Mr. Josue deduct in 2008? a. Zero c. P4,000 b. P3,000 d. P8,000

4.

Penalties and/or interest imposed on the taxpayer may be abated or cancelled on the ground that the imposition thereof is unjust and excessive, except when: a. The taxpayer is declared insolvent or bankrupt. b. The filing of the return or payment of the tax is made at the wrong venue. c. The taxpayer’s mistake in payment of his tax is due to erroneous written official advice of a revenue officer. d. The assessment is brought about or a result of the taxpayer’s non-compliance with the law due to a difficult interpretation of the said law.

5.

The actual residential home of the decedent and his family at the time of his death, as certified by the Barangay Captain of the locality where the family home is situated, has a fair market value of P3,000,000. The family home is part of the common property of the spouses. How much is the family home deduction? a. P1,500,000 c. P750,000 b. P1,000,000 d. P500,000

6.

A negotiable instrument that is not dated will be considered dated as at the time of a. Acceptance c. Last endorsement b. First endorsement d. Issuance

7.

A delinquent stockholder is not entitled to the following rights, except the right: a. To be voted b. To vote or be represented in the meetings of stockholders c. To dividends d. He is not entitled to all the rights of a stockholder

8.

Three of the following partnership contracts are void. Which one is not? a. A universal partnership of present property between husband and wife b. A universal partnership of profits between a man and a woman living together as husband and wife without the benefit of marriage c. A particular partnership between husband and wife d. A universal partnership between a private individual and a public officer

9.

The following are modes of extinguishing an agency, except: a. Death, civil interdiction, insanity or insolvency of the principal or agent b. Accomplishment of the purpose of the agency c. Expiration of the period for which the agency was constituted d. Continued losses on the part of the principal or agent

D

C

A

B

D

C

C

D

10. Three Which D a. b.

of the following instances will render an offer ineffective before acceptance is conveyed. one will not? Civil interdiction of either party c. Insanity of either party Insolvency of either party d. Intoxication of either party

Business Law & Taxation

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DIFFICULT ROUND 1.

The taxpayer's 2003 percentage tax return is required to be filed through the authorized agent bank under the jurisdiction of RDO East Makati. Without prior authorization from the Commissioner, the taxpayer files the return and pays the tax through an authorized agent bank under the jurisdiction of RDO Davao City on June 30, 2004. The tax due per return is P100,000. How much is the total amount due on June 30, 2004 a. P 154,155.25 c. P 25,000.00 b. P 129,155.25 d. None of the choices

A 2.

Which of the following shall not be subject to income tax? IIIIII-

Pedro Reyes, an official of Corporation X, asked for an “early retirement” because he was emigrating to Australia. He was paid P2,000,000 as a separation pay in recognition of his valuable services to the corporation. Juan Cruz, another official of the same company was separated for occupying a redundant position. He was given P500,000 as separation pay. Jose Bautista was separated due to his failing eyesight. He was given P500,000 as separation pay.

All the three (3) were not qualified to retire under the BIR-approved pension plan of the corporation. a. I, II and III c. I only b. I AND II d. II AND III ONLY

D 3.

This refers to the control number issued by authorized agent bank (AAB) to the taxpayer and BIR to acknowledge that the taxpayer's account has been successfully debited electronically in payment of his tax liability. a. Filing Reference Number b. Acknowledgment Number c. Confirmation Number d. Taxpayer's Information Number

4.

A taxpayer paid excessive tax on April 15, 2000. On December 20, 2001, she filed a written claim for refund. Her claim was denied by the BIR and she received the denial on March 15, 2002. She filed a motion for reconsideration with the BIR on March 31, 2002. On April 10, 2002, she received the final denial of the BIR. What will be the taxpayer’s remedy? a. File another motion for reconsideration with the BIR within 30 days after the receipt of the final denial b. File an appeal with the Court of Tax Appeals on or before May 10, 2002 c. File an appeal with the Court of Tax Appeals on or before April 15, 2002 d. The taxpayer has no more remedy against the final denial

5.

A VAT subject real estate dealer sold a residential lot on January 15, 2007. The following information was made available on the terms of the sale: Gross selling price P 3,000,000 Initial payments on January 15, 2007 750,000 Balance to be paid in equal installment, installments starting February 15, 2007 2,250,000

C

C

The zonal value of the residual lot was P3,500,000. How much was the output tax on January 15, 2007 using 12% VAT rate? a. P 420,000 c. P 105,000 b. P 360,000 d. None of the choices

C 6.

Payment made to a third person is valid to extinguish the obligation of the debtor to the creditor in the following cases, except: a. After payment to the creditor, the third person acquires the creditor’s right. b. When the creditor ratifies the payment to the third person. c. When through the creditor’s conduct, the debtor was led to believe that the third person had authority to receive payment. d. When the third person is subrogated to the rights of the creditor.

7.

N, R and J solidarily bound themselves to deliver to S a Honda motorcycle valued at P 60,000. The obligation was not fulfilled through the fault of J. Thereupon, S filed an action in court against N and the court awarded P 72,000 to S representing the value of the motorcycle plus damages. Which of the following situation is valid?

A

Business Law & Taxation D

a. b. c. d.

If N pays S the P 72,000, N can collect R and J P 24,000 each S has to collect P 24,000 each from N, R and J to satisfy the court’s award of P 72,000 N can refuse to pay the penalty because it should be charged against J, the guilty party If S succeeds in collecting the P 72,000 from N, N in turn can collect from R P 20,000 and from J P 32,000

8.

P authorized A, a minor, to sell his car for P 1,000,000 in cash. A sold the said car to X on installment at a lesser price of P 900,000. P is now repudiating the contact with X on the ground that he is not bound to since X contracted with a minor who exceeded his authority. Decide. a. P is liable under the contract because it is enough that the principal is capacitated since he is the one entering into the contract. b. P is not liable for the sale on installments since it is unenforceable because his agent acted beyond his powers. c. P is not liable because the agent is a minor with whom X contracted d. P is liable provided the sale is in cash for P 1,000,000.

9.

A gets a loan of P 1,000,000 from B which becomes due on October 1, 2008 and mortgaged his house as security for the debt. On June 30, 2008, the mortgaged house completely destroyed the fire through the fault of C. A week later, B demanded payment from A. Is B’s demand valid? a. No, the destruction of the house was not thru the fault of A. b. No, the obligation is one with a definite period which is deemed intended for the benefit of both the debtor and creditor c. Yes, the debt becomes demandable unless A can give another security equally satisfactory d. Yes, the debt becomes demandable even if A can give another security equally satisfactory

A

C

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10. One of the following characteristics of dacion en pago is also a characteristic of a contract of sale. Which is it? D a. There is a pre-existing credit b. Obligations are extinguished c. There is less freedom in fixing the price d. Ownership of the object transferred to the other party

Business Law & Taxation

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TIE-BREAKER QUESTIONS 1. An obligation where various prestations are due but the performance of all of them is required in order to extinguish the obligation is known as: C a. Alternative obligation c. Conjunctive obligation b. Facultative obligation d. Simple obligation 2.

It is an affirmation of fact or any promise by the seller relating to the thing which has a natural tendency to induce the buyer to purchase the same, relying on such promise or affirmation. a. Condition c. Warranty b. False representation d. Seller’s talk

3.

Which a. b. c. d.

4.

Which among the following contracts is void? a. A contract of barter between S, insane, and B, 17 years old b. A contract of sale where B, the buyer, twisted the arm of S, the seller, so that S would sign the deed of sale c. A contract of sale where B, the buyer, aimed a gun at the wife of S, so that S would sign the deed of sale d. A contract for the sale of a cow which is suffering from a contagious disease

5.

Who among the following is the holder of a negotiable instrument originally payable to order? a. The original payee who has negotiated the instrument b. The endorsee who is in possession of the instrument c. The possessor of the instrument to whom the instrument was delivered without any endorsement d. The endorsee who has negotiated the instrument

6.

An instrument payable to bearer may be negotiated through any of the following means, except: a. Special endorsement plus delivery b. Mere delivery c. Blank endorsement plus delivery d. No delivery is required as long as there is an endorsement, whether blank or special

7.

One of the following is not a characteristic of contract of partnership. a. Real, in that the partners must deliver their contributions in order for the partnership contract to be perfected b. Principal, because it can stand by itself c. Preparatory, because it a means by which other contracts will be entered into d. Onerous, because the parties contribute money, property, industry to the common fund

8.

Recording in the Registry of Property in the appropriate book is required for the validity of the contract of: a. Chattel mortgage c. Conventional pledge b. Real mortgage d. Antichresis

9.

A, B, C and D, joint debtors, are obliged to give V, W, X, Y and Z, solidary creditors, P 20,000.00 a. V may collect from B P 20,000 c. V may collect from B P 5,000 b. V may collect from B P 4,000 d. V may collect from B P 1,000

C

C

D

B

D

A

A

C

D

of the following contacts is rescissible? Contracts entered into during a hypnotic spell Contracts entered into in a state of drunkenness Contracts entered into to defraud creditors when the latter cannot collect the claims due them Contracts where both parties are incapable of giving consent

10. The following are modes of extinguishing an agency, except: a. Death, civil interdiction, insanity or insolvency of the principal or agent b. Accomplishment of the purpose of the agency c. Expiration of the period for which the agency was constituted d. Continued losses on the part of the principal or agent