Answer key for Finals Self-Assessment Exam:

Test I: True or False

1. Gain from wash sale is not taxable.

2. An immunity of privilege, a freedom from charge or
burden to which others are subjected is a characteristic
of a deduction.
3. Revenue regional directors and Assistant Commissioner-
Large taxpayer service are duly authorized
representative.
4. A tax lien is an illegal claim or charge on property
whether real or personal, established by law as source of
security for the payment of tax obligations.
5. The 2 year period applies only to suit or proceedings for
the recovery of taxes or penalties erroneously,
excessively or illegally collected.
6. Magna Carta for Senior citizens and PWDs refer to any
Filipino citizen who is 60 years old above. It may apply
to senior citizens with dual citizenship status provided
that the Filipino citizenship and have atleast 12 months
of residency in the Philippines.
 7. The additional government assistance for Senior citizens
consists of Social pension, mandatory Phil health coverage,
social safety nets.
8. An overseas Filipino contributor with taxable income in
the Philippines shall be entitled to 5% tax credit to be
claimed against any internal revenue tax liabilities,
excluding his/her withholding tax liabilities as a with
agent.
9. R.A. 9506 is also known as Personal Equity Retirement
Account (PERA) act of 2008.
10. Tax credits for exporters using local materials as
inputs shall enjoy the same benefits provided for in the
Export Development Act 2004.

Test II: Choose the letter of the correct answer.

a. R.A. 9505
b. Certificate of Accreditation
c. Certificate of Registration
d. Non-filing
e. Constructive distrain
f. Forfeiture
g. Request for investigation
h. Delinquency
i. No double imposition
 j. Delinquency interest
k. Annual income tax return
l. Income tax return (ITR)
m. Commercial invoices
n. Criminal complaint
o. Tax practitioners and agents
p. Cash receipt
q. Accrual accounting
r. Abatement
s. Cash-basis taxpayer
t. Cash method

1.It is instituted not to demand payment but penalize the

taxpayer for violation of Tax Code.
2. Personal Equity Retirement Account of 2008.
3. Divestiture of property without compensation, in
consequence of a default of offers.
4. Persons who are engaged in tax practice; required to
apply for accreditation with BIR.
5. Formal report of income and allowable deductions for
the taxable year in the prescribed form of taxpayer.
6. The owner is merely prohibited from disposing of his
properties.
7. A written account evidencing that a transaction has
been made between the seller and the buyer of goods/
services.
8. Is primarily the responsibility of the management of
the taxpayer.
9. Shall be valid for a period of 3 years from the date of
issue.
10. Interest imposed on the failure to pay.
11. Shall only be issued to individuals engaged in
business or practice of profession and to juridical persons
by the BIR.
12. In no case shall the deficiency and delinquency
interest prescribed herein be imposed.
13. Taxpayers who are not required under the law to file
income tax return.
14. Is the state of a person upon whom the personal
obligation to pay the tax has been fixed by lawful
assessment and are thereafter fails to pay within the time
limited by the law.
15. A plea of re-evaluation of an assessment om the basis
of existing records without heed of addition of evidence.
16. Is essentially checkbook accounting.
17. To include amounts that are constructively received.
18. Amounts are included when definitely earned,
deductions are allowed when definitely incurred.
19. Actual payments are required before deductions are
allowed.
 20. Is authorized when the tax appears to be unjust or
excessive.

Test III: Identification.

1. Filipino citizen/Resident citizen caring, living with

or giving support for PWD; 4th civil degree
consanguinity or affinity claiming such PWD as
dependent.
2. Known as Barangay Micro Business Enterprise Act
of 2002.
3. Responsible for administering and overseeing the
PERA of the contributor.
4. Has the responsibility to maintain and preserve
copies of the audited and certified financial
statement for a period of 10 years from the due date
of filing the annual ITR.
5. Bases Conversion & Development Act of 1992.
6. For the use of the community industries
7. Refer to the remedies of the government that are
enforced through judicial action.
8. Basis of 40% OSD of an individual.
9. When did OSD for individuals and corporations
took effect?
10. The amount realized on the estate.
11. This method of accounting is prescribed for a
long term contracts.
12. The tax assessor has no power to act at all.
13. Refers to the seizure of real properties.
14. There is a violation of certain provisions of law
or statue.
15. An official document that empowers a
Revenue officer to examine and scrutinize a
taxpayer's book of accounts and other accounting
records.
16. There is a law but there is a mistake in
collection.
17. Deduction from Philippine income itself.
18. Exempt from the application of the statue of
non-claims its collection being executive in
character.
 19. A written admission or acknowledgment of the
fact that money has been paid and received for the
payment or settlement between person rendering
services and its customers.
20. Is a person required to withhold, account for,
and remit within prescribed period.
21. Only amounts suggested in settlement of
criminal liability.
22. Interest imposed on any deficiency tax due.
23. Refers to cases involving crimes and other
offenses.
24. A written account evidencing the sale of
goods/ services issued to customer in an ordinary
course of business.
25. Income taxpayers are responsible for
maintaining the necessary records from which
their taxable incomes can be determined.

Test IV: Compute for the ff. (3pts. Each)

 Problem A. Geruwa company incurred the following taxed
during 2021:

Donor's Tax P50,000

Philippine income tax 125,000
Community tax 35,250
Value added tax 5,075
Compromise penalty tax 17,500
Municipal tax 3,000
Documentary stamp tax 2,500

Question: What is the correct amount of taxes that can be deducted

from the Gross income?

Problem B. Meiji bought a diamond ring for P800,000 on January 3,

2019 which she used for personal purposes. On Dec. 1 , 2021, she sells
the diamond ring for P1,100,000 under installment.

Question no. 1: How much is the Gross profit?

Question no. 2: How much is the Capital gains tax if the holding
period is more than 12 months?
Problem C: Lino, a real estate dealer, sold a real estate for P2,500,000
on November 27, 2021. The cost of the property was P1,700,000.
Term of sale :
Down payment P550,000
Monthly installment (Dec. 21 until fully paid) P225,000

Question no. 1: How much is the initial payment?

Question no. 2: How much is the Gross profit?
Question no. 3: How much is the income to be reported in 2018?

Problem D. A taxpayer sold his residential house under the following

terms:
Cash received, January 15, 2020 P350,000
Amount received, July 15, 2020 110,000
Installment due, July 15, 2020 500,000
Cost 200,000
Mortgage assumed by the buyer 260,000

1.) Determine the selling price.

2.) Determine the contract price.
3.) Determine the total capital gains tax.
 Problem E : Mang Juan Corp. used the accrual basis of
accounting method has a gross sales of P1,300,000 with a cost of
sales amounting to P600,000.

Required : Compute for the OSD.

Test V: Put a check on the space provided if it is a

deductible taxes.

1. Philippine income tax

2. Community tax
3. Excise taxes
4. Foreign Income taxes payments claimed as tax credits.
5. Stock transaction taxes
6. Local business tax
7. Municipal taxes
8. Value added
9. Donor's tax
10. Documentary stamp tax
11. Occupational taxes
12. Import duties
13. Estate tax
14. Compromise penalty on taxes
15. Income tax paid abroad claimed as operating expense.