BAM 127: Income Taxation for BA

Teachers’ Guide Module #5

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: ________________________________________ Date: ________________

Quiz No. 1 Materials:

Coverage: FLM Activity Sheets

1. Basic Principles in Taxation;

2. Taxes, Tax Laws and Tax Administration;

3. Introduction to Income Taxation; and

4. Situs of Income.

Hi! I hope you’re having an amazing day! Today, we will be having an assessment of your learning
on the previous lessons. I hope that you have studied very well.

This is a 3 paged test and is composed of 3 sections and have a total score of sixty (60) points. You
have forty (40) Minutes to finish this assessment. Carefully read the instructions before answering.
Strictly No Erasures – any forms of erasure will invalidate your answers.

Now, let’s start!

I – Identification. Identify what is being defined. Place your answer in the blank before each
number. (2 pts each)
___________________________1. It is the inherent power of the sovereign, exercised through the
legislature, to impose burdens upon subjects and objects within its jurisdiction for the purpose of
raising revenues to carry out the legitimate objects of government.
___________________________2. It is an enforced proportional contribution from persons and property
levied by the law-making body of the State by virtue of its sovereignty for the support of the
government and all public needs.
___________________________3. It is the inherent right of the State to condemn private property to
public use upon payment of just compensation. It is also known as the power of expropriation.
___________________________4. This theory bases the power of the State to demand and receive taxes
on the reciprocal duties of support and protection. The citizen supports the State by paying the

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 BAM 127: Income Taxation for BA
Teachers’ Guide Module #5

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: ________________________________________ Date: ________________

portion from his property that is demanded in order that he may, by means thereof, be secured in
the enjoyment of the benefits of an organized society.
___________________________5. It is any inflow of wealth to the taxpayer from whatever source that
increases net worth.
___________________________6. It means any form of advantage derived by the taxpayer. It exists
when there is an increase in the net worth of the taxpayer.
___________________________7. It literally means place of taxation.
___________________________8. It means revenue raised must be sufficient to meet
government/public expenditures and other public needs.
___________________________9. It means tax laws must be clear and concise; capable of effective and
efficient enforcement; convenient as to time and manner of payment, and must not obstruct
business growth and economic development.
___________________________10. It is taxing the same person for the same tax period and the same
activity twice, by the same jurisdiction.
___________________________11. It is the exploitation by the taxpayer of legally permissible alternative
tax rates or methods of assessing taxable property or income, in order to avoid or reduce tax
liability. Also known as “tax minimization.” (e.g. utilizing all permissible allowable deductions)
___________________________12. It is the use of a taxpayer of illegal or fraudulent means to defeat or
lessen the payment of tax. Also known as “tax dodging,” it presupposes malice, fraud, bad faith, or
willful intent on the part of the taxpayer either to under-declare income or over-declare
deductions to defeat tax liability.
___________________________13. It is a system of taxation that says when the tax base increases the
tax rate also increases.
___________________________14. It is a system of taxation that tax rates are constant irrespective of
the increase or decrease in the tax base.
___________________________15. It is the administration, management, conduct, direction, and
supervision of the execution and application of tax laws.

II – Compute the Return of Capital and Return on Capital. Indicate the amount representing
return of capital and return on capital (1 pt. each)

This document is the property of PHINMA EDUCATION

 BAM 127: Income Taxation for BA
Teachers’ Guide Module #5

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: ________________________________________ Date: ________________

No Total Consideration For the loss of Return of Return on

. Capital Capital

1 P 1,000,000 Life of the CEO

2 P 800,000 P 1,200,000 House

3 P 300,000 P 350,000 Bag

4 P 600,000 Compensation

5 P 1,200,000 Human Reputation

6 P600,000 P 500,000 Loss Crop

7 P200,000 P250,000 Car

8 P 320,000 P 100,000 Laptop

9 P 400,000 Life of Neighborhood

10 P 250,000 Health

This document is the property of PHINMA EDUCATION

 BAM 127: Income Taxation for BA
Teachers’ Guide Module #5

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: ________________________________________ Date: ________________

III - The concept of Income- Check the appropriate box whether the following are exempt or
taxable. (1 pt. each)

No Item Taxable Exempt

.

1 Winnings from gambling

2 Income from swindling

3 Indemnity for moral damages

4 Harvested fruits from an Orchard

5 Compensation income

6 Interest income

7 Amount received by the insured in excess of insurance

premiums paid

8 Proceeds of life insurance received by the heirs of the insured

9 Gain on sale of goods by the home office to its branch

10 Gain on sale of goods and services between relatives

This document is the property of PHINMA EDUCATION

 BAM 127: Income Taxation for BA
Teachers’ Guide Module #5

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: ________________________________________ Date: ________________

Key Answers:

1. Taxation;
2. Taxes
3. Eminent Domain
4. Benefits Received Principle / Doctrine of Symbiotic Relationship
5. Income / Gross Income
6. Benefit / Realized benefit
7. Situs of Income
8. Fiscal Adequacy
9. Administrative Feasibility
10. Double Taxation
11. Tax Avoidance
12. Tax Evasion
13. Progressive
14. Proportionate
15. Tax Administration

II - Return of Capital and Return on Capital

No Total Consideration For the loss of Return of Return on

. Capital Capital

1 P 1,000,000 Life of the CEO P 1,000,000

2 P 800,000 P 1,200,000 House P800,000

3 P 300,000 P 350,000 Bag P300,000

4 P 600,000 Compensation P600,000

5 P 1,200,000 Human Reputation P1,200,000

6 P600,000 P 500,000 Loss Crop P500,000 P 100,000

This document is the property of PHINMA EDUCATION

 BAM 127: Income Taxation for BA
Teachers’ Guide Module #5

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: ________________________________________ Date: ________________

7 P200,000 P250,000 Car P 200,000

8 P 320,000 P 100,000 Laptop P100,000 P 220,000

9 P 400,000 Life of Neighborhood P 400,000

10 P 250,000 Health P 250,000

III – The concept of Income

No Item Taxable Exempt

.

1 Winnings from gambling a

2 Income from swindling a

3 Indemnity for moral damages a

4 Harvested fruits from an Orchard a

5 Compensation income a

6 Interest income a

7 Amount received by the insured in excess of insurance a

premiums paid

8 Proceeds of life insurance received by the heirs of the insured a

9 Gain on sale of goods by the home office to its branch a

10 Gain on sale of goods and services between relatives a

This document is the property of PHINMA EDUCATION