WorksheetsTaxation and Income Quiz
Total questions: 66
Worksheet time: 11mins
What is the primary source of income for an employee?
Business profits
Rental income
Compensation for services
Investment income
Which of the following is NOT a component of gross compensation income?
Hazard pay
Profit-sharing
Rent income
Retirement pay
A payment given to a person as recognition for services performed, without a fixed fee, is known as:
Commission
Honorarium
Salary
Wage
Allowances that are directly related to the employee's job duties and are subject to accountability are generally:
Taxable
Non-taxable
Partially taxable
Depends on the employer's policy
Retirement pay is generally taxable unless:
It's received from a government-approved pension plan
The employee is under 50 years old
The employee has served for less than 10 years
The employee voluntarily retired
Separation pay is generally taxable if:
It's due to involuntary separation
It's received by the employee's heirs
It's voluntarily availed
It's due to a company merger
The 13th-month pay is generally:
Fully taxable
Fully non-taxable
Partially taxable up to a certain amount
Taxable only if received in cash
Overtime pay is:
Not included in gross compensation
Included in gross compensation
Taxable only if received in excess of regular salary
Taxable only if received for work on weekends
Fringe benefits paid in kind to rank-and-file employees are generally:
Taxable as part of gross compensation
Non-taxable
Taxable only if the value exceeds a certain threshold
Taxable only if received by executives
Which of the following is NOT a type of allowance that may be included in gross compensation income?
Transportation allowance
Representation allowance
Cost of living allowance
Rental allowance
Tips and gratuities received by an employee are generally:
Taxable income
Non-taxable income
Taxable only if reported to the employer
Taxable only if received in cash
Pension income is generally:
Fully taxable
Fully non-taxable
Taxable only if received from a private company
Taxable only if received in excess of a certain amount
Vacation pay is generally:
Fully taxable
Fully non-taxable
Taxable only if received in excess of regular salary
Taxable only if received in cash
Awards for special services received by an employee are generally:
Fully taxable
Fully non-taxable
Taxable only if received in excess of a certain amount
Taxable only if received in cash
Beneficial payments made by an employer on behalf of an employee are generally:
Taxable income to the employee
Non-taxable income to the employee
Taxable income to the employer
Non-taxable income to the employer
Fringe benefits are:
Additional compensation given in cash only
Additional compensation given in kind only
Additional compensation given in cash or in kind
Not considered as compensation
Which of the following is NOT a fringe benefit?
Car provided by the employer
Housing provided by the employer
Educational assistance for the employee's dependents
Salary increase
The taxability of fringe benefits depends on:
The position of the employee
The nature of the fringe benefit
Both A and B
Neither A nor B
Fringe benefits received by a rank-and-file employee are generally:
Subject to income tax
Subject to fringe benefits tax
Not subject to any tax
Subject to a lower tax rate
Fringe benefits received by a managerial employee are generally:
Subject to income tax
Subject to fringe benefits tax
Not subject to any tax
Subject to a lower tax rate
The gross-up monetary value of a fringe benefit is:
The fair market value of the benefit
The taxable value of the benefit
The total value of the benefit, including taxes
The value of the benefit after applying the gross-up rate
The gross-up rate for fringe benefits depends on:
The type of fringe benefit
The position of the employee
The residency status of the employee
All of the above
The fringe benefits tax rate for a resident citizen is:
32%
25%
15%
0%
The fringe benefits tax rate for a non-resident alien employed by an offshore banking unit is:
32%
25%
15%
0%
If a fringe benefit is not reported to the BIR, the employer may be subject to:
A fine
A penalty
Both A and B
Neither A nor B
Educational assistance provided by an employer to an employee's dependents is:
Always considered a fringe benefit
Considered a fringe benefit only if the employee is a managerial employee
Considered a fringe benefit only if the employee is a rank-and-file employee
Not considered a fringe benefit
A car provided by an employer to an employee is:
Always considered a fringe benefit
Considered a fringe benefit only if the employee is a managerial employee
Considered a fringe benefit only if the employee is a rank-and-file employee
Not considered a fringe benefit
The fair market value of a fringe benefit is generally determined by:
The employer
The employee
The BIR
An independent appraiser
If a fringe benefit is received in kind, the employer must:
Report the fair market value of the benefit to the BIR
Pay income tax on behalf of the employee
Both A and B
Neither A nor B
The fringe benefits tax is:
A final tax
An income tax
A withholding tax
A value-added tax
Scenario 1: A merchandising business provided the following data: Sales: P300,000 Sales returns and allowances: P20,000 Sales discounts: P30,000 Cost of goods sold: P150,000 Gains from sale of fixed assets: P20,000 What is the net sales?
P250,000
P270,000
P290,000
P300,000
Scenario 1: A merchandising business provided the following data: Sales: P300,000 Sales returns and allowances: P20,000 Sales discounts: P30,000 Cost of goods sold: P150,000 Gains from sale of fixed assets: P20,000 What is the gross profit?
P100,000
P120,000
P140,000
P160,000
Scenario 1: A merchandising business provided the following data: Sales: P300,000 Sales returns and allowances: P20,000 Sales discounts: P30,000 Cost of goods sold: P150,000 Gains from sale of fixed assets: P20,000 What is the gross income from business?
P120,000
P140,000
P160,000
P180,000
Scenario 2: A servicing business provided the following data: Gross receipts: P500,000 Returns and allowances: P10,000 Discounts: P20,000 Cost of services: P300,000 What is the gross business income for tax purposes?
P170,000
P190,000
P210,000
P230,000
Scenario 3: A professional (e.g., doctor) provided the following data: Gross fees: P800,000 Allowable deductions: P300,000 Personal exemptions: P100,000 What is the net income before personal exemptions?
P500,000
P600,000
P700,000
P800,000
Scenario 3: A professional (e.g., doctor) provided the following data: Gross fees: P800,000 Allowable deductions: P300,000 Personal exemptions: P100,000 What is the net income of the professional?
P400,000
P500,000
P600,000
P700,000
Scenario 4: A manufacturing business provided the following data: Total sales: P400,000 Sales returns and allowances: P30,000 Sales discounts: P40,000 Cost of goods sold: P200,000 Other income: P50,000 What is the gross profit?
P130,000
P150,000
P170,000
P190,000
Scenario 4: A manufacturing business provided the following data: Total sales: P400,000 Sales returns and allowances: P30,000 Sales discounts: P40,000 Cost of goods sold: P200,000 Other income: P50,000 What is the gross income from business?
P180,000
P200,000
P220,000
P240,000
Scenario 5: A professional (e.g., lawyer) provided the following data: Gross fees: P1,000,000 Allowable deductions: P400,000 Personal exemptions: P150,000 What is the net income before personal exemptions?
P600,000
P700,000
P800,000
P900,000
Scenario 5: A professional (e.g., lawyer) provided the following data: Gross fees: P1,000,000 Allowable deductions: P400,000 Personal exemptions: P150,000 What is the net income of the professional?
P450,000
P550,000
P650,000
P750,000
Scenario 6: A manufacturing business provided the following data: Total sales: P500,000 Sales returns and allowances: P40,000 Sales discounts: P50,000 Cost of goods sold: P250,000 Other income: P60,000 What is the gross profit?
P150,000
P170,000
P190,000
P210,000
Scenario 6: A manufacturing business provided the following data: Total sales: P500,000 Sales returns and allowances: P40,000 Sales discounts: P50,000 Cost of goods sold: P250,000 Other income: P60,000 What is the gross income from business?
P210,000
P230,000
P250,000
P270,000
Scenario 7: A servicing business provided the following data: Gross receipts: P600,000 Returns and allowances: P15,000 Discounts: P25,000 Cost of services: P350,000 What is the gross business income for tax purposes?
P180,000
P200,000
P220,000
P240,000
What is the primary requirement for retirement benefits to be tax-exempt?
The employee must be at least 60 years old.
The employer must have maintained a pension plan for at least 10 years.
The employee must have been in the service of the same employer for at least 10 years.
The retirement benefits must exceed P100,000.
Which of the following is considered a de minimis benefit?
A company car provided to a high-ranking executive
A cash bonus of P20,000 for outstanding performance
A daily meal allowance for overtime work
A fully paid vacation to Europe for top-performing employees
What is the tax implication of receiving a gift from a relative?
It is always tax-exempt.
It is taxable if the value exceeds P100,000.
It is taxable if the gift is received from a non-resident alien.
It is taxable if the gift is received in exchange for services rendered.
Which of the following is NOT a requirement for prizes and awards to be tax-exempt?
The recipient did not join the contest.
The recipient is not required to render substantial future services.
The prize or award was given for a religious, charitable, scientific, educational, artistic, literary, or civic enhancement purpose.
The prize or award was given for a sports competition sanctioned by the Philippine Olympic Committee (POC).
What is the tax treatment of separation pay received due to retrenchment?
It is always tax-exempt.
It is taxable if the amount exceeds P100,000.
It is taxable if the employee was dismissed due to misconduct.
It is taxable if the employee has been in the service of the employer for less than 5 years.
Which of the following is considered a fringe benefit that is generally tax-exempt?
A company-provided car for personal use
A luxury vacation package for top employees
A gym membership for employees
A cash bonus of P50,000 for outstanding performance
What is the tax implication of receiving compensation for injuries from insurance?
It is always tax-exempt.
It is taxable if the amount exceeds P100,000.
It is taxable if the injuries were caused by the employee's negligence.
It is taxable if the insurance policy was purchased by the employer.
Which of the following is NOT a requirement for retirement benefits to be tax-exempt?
The employee must be at least 50 years old upon retirement.
The employer must maintain a private pension plan approved by the BIR.
The employee must have been in the service of the same employer for at least 10 years.
The retirement benefits must be received in a lump sum payment.
What is the tax treatment of 13th-month pay and other benefits up to P82,000?
It is always tax-exempt.
It is taxable if the employee is a high-ranking official.
It is taxable if the employee has been in the service of the employer for less than 5 years.
It is taxable if the employee receives other taxable income.
Which of the following is considered a non-taxable fringe benefit?
A company-provided car for personal use
A luxury vacation package for top employees
A gym membership for employees
A cash bonus of P50,000 for outstanding performance
What is the tax implication of receiving retirement benefits from the SSS or GSIS?
It is always tax-exempt.
It is taxable if the amount exceeds P100,000.
It is taxable if the employee has been in the service of the government for less than 5 years.
It is taxable if the employee receives other taxable income.
Which of the following is NOT a requirement for prizes and awards to be tax-exempt?
The recipient did not join the contest.
The recipient is not required to render substantial future services.
The prize or award was given for a religious, charitable, scientific, educational, artistic, literary, or civic enhancement purpose.
The prize or award was given for a sports competition sanctioned by the Philippine Olympic Committee (POC).
What is the tax treatment of separation pay received due to retrenchment?
It is always tax-exempt.
It is taxable if the amount exceeds P100,000.
It is taxable if the employee was dismissed due to misconduct.
It is taxable if the employee has been in the service of the employer for less than 5 years.
Which of the following is considered a fringe benefit that is generally tax-exempt?
A company-provided car for personal use
A luxury vacation package for top employees
A gym membership for employees
A cash bonus of P50,000 for outstanding performance
Which of the following is NOT an allowable deduction for individual and corporate taxpayers?
Depreciation and depletion
Personal expenses incurred for the taxpayer's comfort and convenience
Charitable and other contributions
Research and development costs
What is the primary requirement for depreciation and depletion to be deductible?
The property must be used in personal transactions.
The property must be fully paid for.
The property must be used in the taxpayer's trade, business, or profession.
The property must be fully depreciated.
Which of the following is NOT a requirement for charitable and other contributions to be deductible?
The contributions must be actually paid or made within the taxable year.
The taxpayer giving charitable donations must be engaged in business, trade, or exercise of profession.
The entity receiving the donations must be among those specified by law.
The contributions must be used for personal purposes.
What is the tax treatment of contributions made to a non-accredited non-government organization?
Fully deductible.
Partially deductible.
Not deductible.
Deductible if the contributions are used for religious purposes.
Which of the following is NOT an allowable deduction for research and development costs?
Scientific or technical evaluation
Findings of improving, formulating, and testing products or processes
Costs incurred after full-scale commercial production
Costs incurred prior to full-scale commercial production
What is the tax implication of using the optional standard deduction?
The taxpayer cannot claim any itemized deductions.
The taxpayer can claim both the optional standard deduction and itemized deductions.
The optional standard deduction is only available to corporate taxpayers.
The optional standard deduction is only available to individual taxpayers.
Which of the following is NOT an allowable deduction for business expenses?
Salaries, wages, and other forms of compensation
Entertainment expenses for personal enjoyment
Travel expenses incurred in the pursuit of trade, business, or profession
Rental expenses for business premises
What is the tax treatment of travel expenses incurred by the spouse of a company executive for personal reasons?
It is fully deductible.
It is partially deductible.
It is not deductible.
It is deductible if the spouse is also an employee of the company.
Which of the following is NOT a requirement for interest expenses to be deductible?
The interest must be incurred on a loan from a related party.
The interest must be paid in advance.
The indebtedness must be connected with the taxpayer's trade, business, or profession.
The interest must be incurred on a loan from a non-resident alien.
