name____________________________________________________________ score___________

course_____________________________________________________________ year________

Finals drill 3

Individual income tax

Mr. A is XYZ Corp's financial manager. The company is involved in the delivering back-office assistance, payroll,
legal administration, accounting outsourcing, and services for compliance. The following information was extracted
from Mr. A's monthly pay stub:

At the end of the year, Mr. A received 13th month pay of P100,000 and performance bonus amounting to
P150,000. He also received P20,000 for the 6 unutilized vacation leaves. Total taxes withheld on compensation by
his employer amounted to P174,957.30.

1. the annual income tax due

a. 242,500
b. 242,800
c. 245,800
d. 234,800

2. The annual income tax payable.

a. 56,768.4
b. 67,890.7
c. 68,890.3
d. 67,842.7

3. taxable income
a. 1,359,567
b. 1,361,200
c. 1,221,678
d. 1,450,000

Mr. A is XYZ Corp's financial manager. The company is involved in the delivering back-office assistance, payroll,
legal administration, accounting outsourcing, and services for compliance. The following information was extracted
from Mr. A's monthly pay stub:
At the end of the year, Mr. A received 13th month pay of P100,000 and performance bonus amounting to
P150,000. He also received P40,000 for the 12 unutilized vacation leaves. Total taxes withheld on compensation by
his employer amounted to P174,957.30.

4. the annual income tax due?

A.299,450.1
B. 254,789.67
C. 242,966.67
D. 254,567.33

5. the annual income tax payable?

a. 54,006.5
b. 65,799.1
c. 23,809.4
d. 68,009.4

6. taxable income
a. 1,361,866.7
b. 1,351,833.4
c. 1,677,500.1
d. 1,361,340

Ms. B is a member of the accounting team of LMN Company, a business that manufactures from tuna in a can. Ms.
B's monthly pay stub provided the following information:

At the end of the year, Ms. B received her 13th month pay of P30,000. Total taxes withheld on
compensation by her employer amounted to P14,545.

7. annual income tax due

a. 20,320
b. 15,240
c. 18,569
d. 19,540
8. annual income tax payable
a. 695
b. 670
c. 345
d. 548

9. taxable income
a. 330,600
b. 320,700
c. 315,600
d. 340,200

Compairs, a sole proprietor, is engaged in computer sales, reporting the following income and
expenses during the year:

10. How much is the income tax due?

a. 156,900
b. 165,780
c. 162,875
d. 156,999

11. Assuming Compairs opted to use OSD, what is the income tax due?
a. 145,800
b. 167,900
c. 157,500
d. 140,700

12. Supposed Compairs opted to be taxed at 8%, how much is the income tax due?
a. 116,000
b. 120,000
c. 122,000
d. 118,000

Compairs, a sole proprietor, is engaged in computer repairs and maintenance, reporting the
following income and expenses during the year:
13. How much is the income tax due?
a. 135,000
B. 112,500
C. 115,000
D. 124,600

14. Assuming Compairs opted to use OSD, what is the income tax due?
a. 123,000
b. 101,200
c. 95,700
d. 98,500

15. Supposed Compairs opted to be taxed at 8%, how much is the income tax due?
a. 34,000
B. 45,000
C. 67,000
D. 84,000

Ms. Terry Yaki, operates a convenience store while she offers bookkeeping services to her
clients. Her gross sales amounted to P800,000 for the year. In addition, she earned P300,000
from bookkeeping services. She incurred cost of sales and operating expenses amounting to
P600,000 and P200,000, respectively. She already signified her intention to be taxed at 8%
income tax rate in her 1st quarter return.

16. What is her income tax liability for the year?

a. 56,000
B. 68,000
C. 65,000
D. 34,000

17. Supposed Ms. Terry Yaki failed to signify her intention to be taxed at 8% income tax rate, what is her income
tax liability for the year?
a. 7,500
b. 11,000
c. 5,500
d. 10,000

Mr. Madz, a comptroller of JAC Company, earned annual compensation of P1,500,000, inclusive of 13th month and
other benefits of P120,000 but net of mandatory contributions. Aside from the employment income, he owns a
convenience store, with gross sales of P2,400,000. His cost of sales and operating expenses are P1,000,000 and
P600,000, respectively, and with non-operating income of P100,000.

18. What is his income tax liability using itemized deductions?

a. 488,000
b. 468,900
c. 495,500
d. 510,000

19. In case of OSD, what is his income tax liability?

a. 690,000
b. 650,000
c. 678,500
d. 788,000

20. Supposed he opted to use 8% income tax, what is his income tax due?
a. 510,000
b. 513,000
c. 540,000
d. 450,000

Mr. Ser Yoso signified his intention to be taxed at 8% income tax rate on gross sales in his 1st quarter ITR. He has
no other source of income. His total sales for the 1st 3 quarters amounted to P3,000,000 with 4th quarter sales of
P3,500,000.

21. 1st quarter

a. 15,000
b. 20,500
c. 20,000
d. 23,000
22. 2nd quarter
a. 28,000
b. 35,000
c. 38,000
d. 40,000

23. 3rd quarter

a. 140,000
b. 123,333.34
c. 154,000
d. 160,000

24. 4th quarter

a. 200,500
b. 220,500
c. 250,300
d. 232,900
Ethel is a resident citizen, earning purely business income for the taxable year: Gross salesP2,800,000
Cost of sales1,200,000
Operating expenses650,000
Creditable withholding taxes80,000

25. tax due or payable

a. 59,000
b. 60,000
c. 50,000
d. 100,000
ANSWER - TAX REMEDIES: DRILL 2 FINALS
1. C 6. C 11. C- 16. C- 21. A
2. D 7. C- 12. C- 17. B- 22. C-
3. A 8. B 13. C- 18. B 23. B-
4. A- 9. B- 14. D- 19. A- 24. B
5. A 10. A 15. B 20. B- 25. A

SOLUTION:
1.

2.

3. -

4. TO 6

7.
10 . 80,000 - 60,000 = 20,000
11.

12.

13.

14. Tabag - page 101

15.

17 to 18:
20 to 21;

25.
NAME:
COURSE AND YEAR:

1. Jeonghan sold his principal residence for P16,000,000 when the cost to him of the same was
P5,000,000. At the time of the sale the zonal and assessed value are Php20,000,000 and
P15,000,000, respectively.
The capital gains tax on the sale is.
a. P300,000 b. P1,200,000 c. P900,000 d. P0

2. Wonwoo sold his principal residence for P16,000,000 when the cost to him of the same was
P5,000,000. At the time of the sale the zonal and assessed value are Php20,000,000 and P15,000,000,
respectively. Ten months after the sale, Wonwoo acquired another principal residence for
P25,000,000.

The cost basis of the new principal residence is.

a. P25,000,000 b. P20,000,000 c. P14,000,000 d. P16,000,000

3. Dk sold his principal residence for P16,000,000 when the cost to him of the same was P5,000,000.
At the time of the sale the zonal and assessed value are Php20,000,000 and P15,000,000,
respectively. Ten months after the sale, Dk acquired another principal residence for P12,000,000.

The capital gains tax on the sale is

a. P300,000 b. P1,200,000 c. P900,000 d. P0

4. Hoshi sold his principal residence for P16,000,000 when the cost to him of the same was
P5,000,000. At the time of the sale the zonal and assessed value are Php20,000,000 and P15,000,000,
respectively. Ten months after the sale, Hoshi acquired another principal residence for P12,000,000.

The cost basis of the new principal residence is

A. P300,000 B. P1,200,000 C. P900,000 D. P0

Numbers 5 to 7 are based on the following

Mingyu, the Chief Financial Officer of Pledis Inc., earned annual compensation income in 2021 of
P2,500,000, inclusive of 13th month and other benefits in the amount of P220,000 but net of
mandatory contributions to SSS and PhilHealth. Aside from employment income, he owns a
convenience store, with gross sales of P800,000. His Cost of Sales and operating expenses are
P500,000 and P150,000, respectively, and with non-operating income of P100,000.
5.How much is the total income tax of Mingyu?
A. P52000 B. P701,200 C. P621,200 D. P693,200

6. If Mingyu opted for the 8% income tax rate, his income tax expense is:
A. P52,000 B. P701,200 C. 621,200 D. P693,200
7. Based on the same set of fact facts in number 5, except that Mingyu is not employed and opted to
avail of the 8% income tax. His income tax expense for the year is.
A. P52,000 B. P701,200 C. P621,200 D. P693,200
8-12. Seungkwan, VAT-registered, had the following data for the taxable year 2022:
Gross sales, Philippines P2,000,000
Cost of sales, Philippines 1,600,000
Gross sales, USA 1,500,000
Cost of sales, USA 1,200,000
Operating expenses, Philippines 10,000
Operating expenses, USA 35,000

8. If the taxpayer is a resident citizen, his tax due is:

A. P93,750 B. P158,600 C. P81,250 D. P87,500

9. If the taxpayer is a non-resident citizen, VAT-registered, his tax due is:

A. P15,000 B. P77,000 C. P28,000 D. P43,000

10. If the taxpayer is a resident alien, VAT-registered, his tax due is:
A. P14,000 B. P77,000 C. P28,000 D. P15,000

11. If the taxpayer is a non-resident alien engaged in business in the Philippines, married,
VATregistered and his country allows reciprocity of ₱30,000 as personal exemption for married
individuals, his tax due is.
A. P22,000 B. P28,000 C. P83,000 D. P15,000

12. If the taxpayer is a non-resident alien not engaged in business in the Philippines, married, and his
country grants P35,000 as personal exemption for married individuals, his tax due is
A. P100,000 B. P93,750 C. P400,000 D. P450,000

13. Atty. Rolly Gomez operates a small night club in which he employs dancers to dance with the
patrons of his night club. In 2022, his gross receipts, cost of services, and operating expenses
(inclusive of the OPT) amounted ₱2,800,000, ₱100,000, and ₱600,000, respectively. In 2022, he sold
his diamond-studded watch (which he bought in 1987 for ₱1.7 Million in 1991) for ₱2,000,000,
recognizing a gain of ₱150,000 for income tax purposes.

Can he avail of the 8% income tax rate option? What is his income tax due for 2022?
a. Yes, because his gross receipts plus non-operating income do not exceed
₱3,000,000; Tax due is ₱236,000 under the 8% tax regime.
b. No, because his business is subject to the 18% OPT under Section 125 and not to
the 3% OPT under Section 116. Tax due is ₱570,000 under the graduated rates.
c. Yes and No. He can avail of the 8% income tax rate option if he chooses this
option in his 1st Quarterly ITR. Otherwise, he will be taxed under the graduated rates. d. None of the
above.
14. Woozi sold his principal residence located in Manila on January 5, 2018 for P8,000,000. The
property was purchased in 2005 for P3,000,000. The current market value of the property at the time
of sale was: BIR Commissioner’s zonal valuation P9,000,000 City Assessor’s schedule of values
6,000,000 What is the capital gains tax on the sale?
A. P300,000 B. P360,000 C. P480,000 D. P540,000
15. If Woozi in the preceding number, within 6 months after the sale, purchases another residence
for P8,000,000, what will be the capital gains tax on the sale and what would be the cost (basis) of
the new residence for income tax purposes?
A. P540,000; P8,000,000
B. P0; P6,000,000
C. P540,000; P9,000,000
D. P0; P3,000,000

16. Suppose Woozi in number 14, within the 18-month reglementary period, instead purchase a new
principal residence at a cost of P10,000,000. What will be the capital gains tax on the sale and what
would be the cost (adjusted basis) of the new residence for income tax purposes?
A. P0; P3,000,000
B. P0; P10,000,000
C. P0; P9,000,000
D. P0; P5,000,000

17. Suppose Woozi in number 14, within the 18-month reglementary period instead purchases a new
residence at a cost of P5,000,000. What will be the capital gains tax on the sale?
A. P202,500 B. P300,000 C. P480,000 D. P337,500

18. In number 17, what would be the cost (adjusted basis) of the new residence for income tax
purposes?
A. P3,000,000 B. P1,875,000 C. P5,000,000 D. P0

19. Seungcheol, a part-time exercise trainer, also operates a shoe store while offering her services to
clients living in Metro Manila. In 2018, the gross sales of her shoe amounted to P1,100,000 while her
receipts from her training services amounted to P400,000. Her total cost of sales and operating
expenses amounted to P150,000 and P35,000 respectively. He signified in her 1st Quarterly ITR her
intention to be taxed at the 8% income tax rate.
Compute her income tax due for 2018.
A. P100,000 B. P120,000 C. P68,000 D. P69,000

20. If Seungcheol, in number 19, failed to signify her intentions to be taxed at the 8%
income tax rate, what will be her income tax due in 2018? A. P566,879 B. P369,800 C. P284,500 D.
P267,900
21. In 2018, Dino M. Batumbakal, the CEO of the Philippines Nuclear Fusion
Corporation, earned compensation income of P4,000,500. This amount is inclusive of his 13th month
pay and other benefits of P250,000, but net of the mandatory contributed to SSS and PhilHealth.
Aside from his employment, he also owns a cafeteria. In 2018, the cafeteria had gross sales of
P1,500,000, cost of sales of P500,000 and operating expenses of P300,000. It also had non-operating
income of P700,000. Compute his income tax due for 2018 if he avails of the 8% income tax rate
option on his gross sales plus non- operating income arising from his cafeteria business.
A. P1,101,360 B. P1,277,360 C. P1,257,360 D. P1,734,430

22. In the previous number, what would be Dino’s total income tax due if he did not avail of the 8%
income tax rate on gross sales plus non-operating income arising from his business?
A. P696,969 B. P1,650,920 C. P1,549,360 D. P1,202,340

23. Dino in number 21 resigned from Philippine Nuclear Fusion in the first week of January 2019 to
concentrate in his cafeteria business. His total compensation income in 2019 amounted to P180,000
inclusive of other benefits (productivity bonus) of P30,000.
In 2019, the bakery had gross sales of P2,300,000, cost of sales of P750,000, and operating expenses
of P450,000. It also had non-operating income of P235,000.
What is his income tax due for 2019 if he avails of the 8% income tax rate option on his gross sales
plus non-operating income arising from his business?
A. P202,800 B. P194,800 C. P182,800 D. P192,200

24. Jeongcheol Layag is the CEO of Sesame Zoo Corporation. In 2018, he received total compensation
of P10,000,000 inclusive of 13th month pay and other benefits in the amount of P800,000. He also
owns a poultry farm which applies the we market in his province. Its gross sales totaled P5,000,000.
The farm’s cost of sales and operating expenses amounted P2,300,000 and P580,000, respectively. Its
non- operating income amounted to P230,000.

Compute his income tax due in 2018.

A. P3,910,000 B. P3,874,760 C. P3,901,000 D. P3,400,030

25. Pepito Manalo, a Filipino citizen, won from the Philippine Charity Sweepstakes Swertres draw a
prize amounting to P4,500. How much is the final tax on the said winning.
A. P0 B. P900 C. P450 D. P1,440
1-2

3. SOLUTION:

8% income tax due is not applicable because the nature of business of Mr. Swabe is subject to
Other Percentage Tax under Sec 125 of the Tax Code. Hence, Mr. Swabe is subject to the
graduated income tax rate instead.

4-5
6.

7.

8.

9. 10

10-11

340,000-250,000= 90,000 × 15%= 13, 500

12-14
15.

16
17-18.

19-20
21-23

24-25.
Name: Score:

Course and Year: Date:

1.) The ITR for the calendar year 2017 was due for filing on April 15, 2018, but the taxpayer
voluntarily filed his tax return without notice from the BIR, only on July 15, 2018. The tax due per
return amounts to P100,000. The total amount due on July 15, 2018(excluding compromise penalty)
is:
A) P128,000 C.) 130,000
B) P111,250. D.) 168,000

2-5) Mr. A filed his income tax return for 2018 on April 15, 2019. The return shows the following:
Income tax due, P80,000;
Income tax withheld, P60,000;
Income tax payable, P20,000.
A will pay his tax liability in installment.
2.) How much is the tax still due for the first installment?
A.) None B) 15,000
B.) 20,000 C) 40.000

3.) How much is the tax due for the second installment?
A) 20,000 C) 40,000
B.) 30,000 D) None

4.) What is the last day for payment of the second installment?
A) September 15, 2019 C)December 15, 2019
B) September 13, 2019 D)October 15, 2019

5.) Assume that the tax due was paid on January 15, 2020. Determine the total amount due,
including penalties and interest, if any.
A) 29,000 C) 31,200
B) 30,000 D.) 33,000

6-7) A company has been assessed of deficiency income tax of P1,000,000, exclusive of interest and
surcharge for 2021 taxable year. The tax liability has remained unpaid despite the lapse of June 30,
2023, the deadline for the payment stated in the notice and demand issued by the Commissioner.
Payment was made by the taxpayer on Feb. 10, 2024.
6.) The correct amount of surcharge, if any, shall be:
A) P120,000 B) P250,000
C) P500,000 D) Nil
7.) The correct amount of deficiency interest shall be:
A) P103,215.09 C) P145,315.07
B) P248,530.16 D) P1,498,530.16
8.) Statement 1: In case of failure to file an information return, statement or list, or keep any record,
or supply any information as may be required, on the date prescribed therefor, a penalty of Five
Hundred Pesos (₽ 500.00) shall be paid by micro and small taxpayers for each such failure by the
covered taxpayer, upon notice and demand by the Commissioner of Internal Revenue.
Statement 2: In no case shall the aggregate amount to be imposed to micro and small taxpayers for
all such failures during a calendar year exceed Twelve Thousand Five Hundred Pesos (P12,500.00).
a. Only statement 1 is correct c. Both statements are correct
b. Only statement 2 is correct d. Both statements are incorrect

9.) The taxpayer timely filed his ITR, and paid the tax due as shown therein on April 15,
2018. The BIR subsequently determined that a deficiency tax of P100,000 was still due.
The BIR sent a letter of demand and assessment notice asking to pay the deficiency income tax plus
interest by July 15, 2018. The taxpayer paid only on August 15,2018.
The total amount due on August 15, 2018 (excluding compromise penalty) is:
a） P130,667 c） P115,300
b) P129,780 d) None of the above

10.) - The CIR may refund a tax even without a claim for refund from the taxpayer where, on the
face of the return upon which the payment was made, such payment clearly appears to have been
erroneously made.
B - When 2 years are about to expire from the date of payment and no decision has yet been
received by the taxpayer on his claim for refund filed with the BIR, the taxpayer may appeal to the
CTA even without waiting for the decision of the BIR on his claim for refund.
a) True, true c) False, true
b) True, false d) False, false

11-14) Felix is a sole proprietor registered in RDO No. 6 - Urdaneta City, Pangasinan. On the day of
the deadline of the second quarter VAT return for the year 2023, Felix was in Puerto Princesa City,
Palawan. As such, he filed his VAT return before an authorized agent bank at RDO No. 36, the
RDO having jurisdiction over Puerto Princesa City, Palawan, within the deadline provided by law.
The amount indicated in the VAT return is P560,000.

11.) What is the last day when Felix should have filed his VAT return?
a. July 15, 2023 c. July 31, 2023
b. July 25, 2023. d. August 15, 2023

12) How much is the surcharge? a.

a. -0- c. 140,000
b. 56,000 d. 280,000

13.) How much is the interest?

a. P-0- c. P17,675
b. P5,523. d. P8,653
14.) Excluding compromise penalties, how much is the amount still due?
a. P140,000 c. P560,000
b. P145,523 d. P700,000

15-17) Chen, a resident citizen, filed his income tax return for the calendar year 2024 on August 5,
2025. Chen received no notice of audit or investigation. He is to pay P400,000 in basic income taxes.

15.) What is the last day when Chen should have filed his income tax return?
a. April 15, 2024 c. May 15, 2025
b. May 15, 2024 d. April 15, 2025

16.) How much is the surcharge?

a. P100,000 c. P300,000
b. P200,000 d. P400,000

17.) How much is the delinquency interest?

a. P14,729 c. P10,784
b. P24,548 d. P62,729

18.) Prior to the effectivity of RA 11976 or the Ease Of Paying Taxes Ac (EOPTA), in which of the
following shall a 25% surcharge be collected?
I. Failure to file and pay the tax due on time
II. Willful neglect to file the return on time
III. Filing of tax return after prior notice in writing from the BIR
a. I only c. I and III only
b. I and II only. d. I, Il and III

19-23) Harvey sold shares not listed and traded in the local stock exchange on June 4, 2023 directly
to the buyer. The selling price is P4,000,000, and the cost of the shares is only P1,000,000. With this
transaction, Harvey filed a capital gains tax return on June 29, 2023 and only paid P100,000,
following misdeclarations in the selling prices and the costs of the shares.
The BIR assessed her of deficiency capital gains tax and determined that there is fraud in the filing
of the capital gains tax return. After due process, a final assessment notice and a formal letter of
demand was issued against Harvey demanding for the payment of taxes, inclusive of surcharge and
penalties on April 9, 2025.

19.) What is the last day when Harvey should have filed her capital gains tax return?
a. June 19, 2023 c. July 10, 2023
b. July 4, 2023 d. July 15, 2023

20.) Assuming the assessment of the BIR is correct, how much is the deficiency capital gains tax?
a. P200,000 с. P450,000
b. P350,000 d. P500,000
21.) How much is the surcharge?
a. P87,500 c. P175,000
b. P100,000 d. P225,000

22.) How much is the interest to be paid on April 9, 2025?

a. P 74,219 c. P95,425
b. P 92,774 d. P111,329

23.) If Harvey only paid the amount on August 30, 2025, how much is the total amount to be paid?
a. P528,174 c. P627,391
b. P535,777 d. P 662,681

24.) Statement 1: Medium taxpayer shall refer to a taxpayer whose gross sales for a taxable year is
Twenty Million Pesos (P20,000,000.00) to less than One Billion Pesos (₽ 1,000,000,000.00).
Statement 2: Large taxpayer shall refer to a taxpayer whose gross sales for a taxable year is One
Billion Pesos (P1,000,000,000.00) or more.
a. Only statement 1 is correct c. Both statements are correct
b. Only statement 2 is correct d. Both statements are incorrect

25.) Statement 1: The filing of quarterly income tax returns and payment of quarterly income tax by
corporations are mere installments and therefore, not the basis in computing the two-year
prescriptive period for refund.
Statement 2: If the tax has been withheld from source (withholding on wages), the prescriptive
period for refund is counted from the date it falls due at the end of the taxable year.
a. First statement is true while second statement is false.
b. First statement is false while second statement is true.
c. Both statements are true.
d. Both statements are false.
 Saint Ferdinand College
College of Accountancy
TAX REVIEW
Name:________________________________________________________________ Score:________________
CourseandYear:__________________________________________________________ Date:_________________

1. 6. 11. 16. 21.

2. 7. 12. 17. 22.
3. 8. 13. 18. 23.
4. 9. 14. 19. 24.
5. 10. 15. 20. 25.

1. Jack Corp., a domestic corporation and a retailer of goods has gross sales of P1,400,000,000.00 with a-cost of sales of P560,000,000.00
and allowable deductions of 150,000,000.00 for the calendar year 2024. Its total assets of P180,000,000.00 as of December 31, 2024 per
Audited Financial Statements includes the land costing P50,000,000.00 and the building of P25,000,000.00 in which the business entity is
situated, with an aggregate amount of P75,000,000.00 as Fixed Assets. How much is the income tax due in 2024?
a. P125,000,000
b. P138,000,000
c. P207,000,0000
d. P172,500,000

2. Dicolgen Corporation, a domestic corporation and a retailer of goods has gross sales of P14,000,000 with a cost of sales of P7,600,000
and allowable deductions of 2,500,000 for - the calendar year 2024. Its total assets of P150,000,000 as of December 31, 2024 per Audited
Financial Statements includes the land costing P50,000,000 and the building of P25,000,000 in which the business entity is situated, with
an aggregate amount of P75,000,000 as Fixed Assets. How much is the income tax due in 2024?
a. P60,000,000 c. P975,000
b. P780,000 d. P1,170,0000

3. Kenneth Pushers Corporation, a resident corporation and a retailer of goods has gross sales of P14,000,000 with a cost of sales of
P7,600,000 and allowable deductions of 2,500,000 for the calendar year 2024. Its total assets of P150,000,000 as of December 31, 2024
per Audited Financial Statements includes the land costing P50,000,000 and the building of P25,000,000 in which the business entity is
situated, with an aggregate amount of P75,000,000 as Fixed Assets. How much is the income tax due in 2024?
a. P60,000,000 c. P975,000
b: P780,000 d. P1,170,0000

4. DemieSimCard Corporation, a domestic corporation and a retailer of goods has gross sales of P14,000,000 with a cost of sales of
P7,600,000 and allowable deductions of 2,500,000 for the calendar year 2024. Its total assets of P150,000,000 as of December 31, 2024
per Audited Financial Statements includes the land costing P40,000,000 and the building of P30,000,000 in which the business entity is
situated, with an aggregate amount of P70,000,000 as Fixed Assets. How much is the income tax due in 2024?
a. P60,000,000 c. P975,000
b. P780,000 d. P1,170,0000
5. A domestic corporation in its 8th year of operations as of January 1, 2024, classified as MSME under CREATE law, has the following
data:
2024 2025
Sales 17,000,000 23,000,000
Cost of Sales 10,500,000 14,250,000
Operating Expenses 6,750,000 4,800,000
How much is the income tax payable for 2024?
a. P65,000 c. P350,000
b. P130,000 d. nil

6. A domestic corporation registered since 1998 provided the following data:

2021 2022 2023 2025
Gross Sales ₽25,000,000 P32,000,000 ₽29,000,000 P35,000,000
Cost of goods sold 18,000,000 20,000,000 19,000,000 18,000,000
Business expenses 7,200,000 11,900,000 10,250,000 9,000,000

Additional information:
• Remaining Net Operating Loss (NOL) from 2018: P50,000

[Type here]
• NOL incurred in 2020: P180,000
• Excess MCIT over RCIT in 2018: 200,000
• Excess MCIT over RCIT in 2020: 80,000
• Assets: P125,000,000
The income tax payable in 2024 should be:
a. P150,000
с. P617,500
b. P277,500
d: P1,527,500

The Next five 5) questions are based on the following:

Le Bron Corporation has the following information for 2024 taxable year:
QUARTER RCIT MCIT CWT
First 200,000 160,000 40,000
Second 240,000 500,000 60,000
Third 500,000 150,000 80,000
Fourth 300,000 200,000 70,000
Additional Information:
Excess MCIT from 2023: P60,000;
Excess tax credits from 2023: P20,000.

7. How much was the income tax payable for the first quarter?
а. ₽200,000
b. ₽160,000
c. P120,000
d. P80,000

8. How much was the income tax payable for the second quarter?
a. P660,000
b. P460,00
c. P200,000
d. ₽160,000

9. How much was the income tax payable for the third quarter?
a. P860,000
b. ₽120,000
с. P600,000
d. P140,000

10. How much was the annual income tax payable?

a. ₽1,260,000 c. P230,000
b. P390,000 d. P930,000
11. Using the same data in the preceding problem except that the MCIT during the 4th Quarter was P500,000. How much was the annual income
tax payable?
a. P330,000 c. P380,000
b. P1,310,000 d. P360,000

Use the following data for the next three (3) questions
East Star, a domestic corporation, sold shares of stock of a domestic corporation for ₽250,000 in 2024. The shares were acquired in 2018
for investment purposes at a cost of R100,000 and were sold directly to a buyer.

12. How much was the capital gains tax due?

а. P10,000 c. P22,500
b. P15,000 d. P45,000

13. How much is the capital gains tax assuming the shares sold were shares of a foreign corporation?
а. P10,000 c. P22,500
b. P15,000 d. nil
14. Assume the shares sold were from a domestic corporation but were not held for investment purposes. Assume further that the seller is
a dealer in securities. How much is the capital gains tax?
a. P10,000 с. P22,500
b. P15,000 d. nil

[Type here]
Use the following data for the next three (3) questions:
The following data were taken from the financial statements of Chen Corporation:
Philippines Abroad
Gross sales 10,000,000 5,000,000
Sales returns 200,000
Cost of goods sold 3,500,000 2,250,000
Operating expenses 2,800,000 1,100,000
Interest income from trade receivable 100,000 50,000
Interest income from BPI deposits-Phils. 100,000
Interest income from BPI deposits-USA 80,000
Interest income- FCDU 150,000
Income from money market placement 200,000 100,000
Dividend income from domestic corporation 75,000
Dividend income from Alpha Corporation 45,000
Dividend income from Omega Corporation 30,000
Royalty income - in general 30,000 25,000
Royalty income - books 20,000
Gain on sale of shares of stock of domestic corp. 120,000
held as capital asset thru local stock exchange;
Selling Price-P500,000
Gain on sale of shares of stock of domestic corp. 150,000
held as capital asset directly to a buyer
Selling Price-P650,000
Gain on sale of real property in the Philippines 5,000,000
classified as capital asset. Cost = P4M; ZV = P8M
Additional information:
• Total assets were valued at ₽80,000,000.
• The shares of stock in Alpha and Omega were acquired on January of the current taxable year.
15. How much is the income tax due and payable assuming the corporation is:
DC RFC
a. 1,674,000 2,038,500
b. 2,038,500 1,093,500
c. 1,383,750 2,161,250
d. 1,395,000 2,161,250
16. How much is the final withholding tax on passive income assuming the corporation is:
DC RFC
a. 81,250 81,250
b. 90,500 90,500
c. 92,500 81,250
d. 92,500 92,500
17. How much is the total capital gains tax assuming the corporation is:
DC RFC NRFC
a. 22,500 22,500 22,500
b. 550,000 10,000 22,500
c. 562,500 22,500 22,500
d. 562,500 10,000 10,000
18. (Based on RR 5-2021 and RR 3-2022): CREATIVE School University (CSU) is a private educational institution with an issued permit
to operate from the Commission on Higher Education (CHED). It is registered with the Securities and Exchange Commission as a private
domestic corporation. SU uses a fiscal year accounting ending July 31 of each year. On July 31, 2024, the following relevant data were
provided:
Gross receipts/sales:
• Education related 8,000,000
• Other unrelated business 10,000,000, 18,000,000
Related cost of service 2,000,000
Related operating expenses 1,000,000
Unrelated cost of service 3,000,000
Unrelated operating expenses 2,000,000
How much is the income tax payable for the fiscal year ending July 31, 2024?
a. P100,000 c. P1,000,000
b. P150,000 d. P2,500,000

19. A domestic corporation has the following income and expenses for 2024 taxable year:
Gross sales P20,000,000

[Type here]
Cost of sales 10,000,000
Operating expenses 3,800,000
Assets 48,0000,000
How much is the income tax due?
a. P1,240,000 c. P1,860,000
b. P1,550,000 d. P3,000,000

20. ABC Corporation, a domestic corporation has the following income and expenses for 2024 taxable year:
Gross sales P20,000,000
Cost of sales 10,000,000
Operating expenses 6,500,000
How much is the income tax due?
a. P600,000 c. P800,000
b. P700,000 d. P875,000

21. Hananiah Corporation, a corporation engaged in business in the Philippines and abroad
Gross Income, Philippines P975,000
Expenses, Philippines 750,000
Gross Income, Malaysia 770,000
Expenses, Malaysia 630,000
Interest on bank deposit 25,000
Assets 15,000,000
Determine the income tax due assuming the corporation is: has the following data for 2024 taxable year:
Domestic Res. Foreign Corp. Non-resident Foreign Corp.
a. P116,800 P72,000 P320,000
b. P109,500 P67,500 P300,000
c. P91,250 P56,250 P250,000
d. P73,000 P56,250 P250,000

Use the following data for the next four (4) questions:
A domestic corporation has the following income and expenses for 2024 taxable year:
Phils. Abroad
Gross sales ₽100,000,000 P50,000,000
Cost of sales Р40,000,000 20,000,000
Operating expenses 30,000,000 12,000,000
22. How much is the income tax due?
a. P12,000,000 c. P14,400,000
b. P13,200,000 d. P18,000,000

23. How much is the income tax due assuming the Company's total assets amounted to R80 million only?
a. P9,600,000
b. P12,000,000
c. P14,400,000
d. P18,000,000

24. How much is the income tax due assuming the company is a resident foreign corporation?
a. P7,500,000
b. P13,200,000
c. P14,400,000
d. P18,000,000
25. How much is the income tax due assuming the company is a nonresident foreign corporation
a. P7,500,000
b. P13,200,000
c. P14,4400,000
d. P15,000,000

[Type here]
 Saint Ferdinand College
College of Accountancy
TAX REVIEW
Name:________________________________________________________________ Score:________________
CourseandYear:__________________________________________________________ Date:_________________

1.D 6.D 11.D 16.D 21.D

2.B 7.D 12.C 17.C 22.A
3.C 8.B 13.D 18.C 23.B
4.C 9.D 14.D 19.B 24.A
5.B 10.C 15.C 20.D 25.D

26. Jack Corp., a domestic corporation and a retailer of goods has gross sales of P1,400,000,000.00 with a-cost of sales of P560,000,000.00
and allowable deductions of 150,000,000.00 for the calendar year 2024. Its total assets of P180,000,000.00 as of December 31, 2024 per
Audited Financial Statements includes the land costing P50,000,000.00 and the building of P25,000,000.00 in which the business entity is
situated, with an aggregate amount of P75,000,000.00 as Fixed Assets. How much is the income tax due in 2024?
a. P125,000,000
b. P138,000,000
c. P207,000,0000
d. P172,500,000

27. Dicolgen Corporation, a domestic corporation and a retailer of goods has gross sales of P14,000,000 with a cost of sales of P7,600,000
and allowable deductions of 2,500,000 for - the calendar year 2024. Its total assets of P150,000,000 as of December 31, 2024 per Audited
Financial Statements includes the land costing P50,000,000 and the building of P25,000,000 in which the business entity is situated, with
an aggregate amount of P75,000,000 as Fixed Assets. How much is the income tax due in 2024?
a. P60,000,000
b. P780,000
c. P975,000
d. P1,170,0000

28. Kenneth Pushers Corporation, a resident corporation and a retailer of goods has gross sales of P14,000,000 with a cost of sales of
P7,600,000 and allowable deductions of 2,500,000 for the calendar year 2024. Its total assets of P150,000,000 as of December 31, 2024
per Audited Financial Statements includes the land costing P50,000,000 and the building of P25,000,000 in which the business entity is
situated, with an aggregate amount of P75,000,000 as Fixed Assets. How much is the income tax due in 2024?
a. P60,000,000 c. P975,000
b: P780,000 d. P1,170,0000

29. DemieSimCard Corporation, a domestic corporation and a retailer of goods has gross sales of P14,000,000 with a cost of sales of
P7,600,000 and allowable deductions of 2,500,000 for the calendar year 2024. Its total assets of P150,000,000 as of December 31, 2024
per Audited Financial Statements includes the land costing P40,000,000 and the building of P30,000,000 in which the business entity is
situated, with an aggregate amount of P70,000,000 as Fixed Assets. How much is the income tax due in 2024?
a. P60,000,000
b. P780,000
c. P975,000
d. P1,170,0000

53. A domestic corporation in its 8th year of operations as of January 1, 2024, classified as MSME under CREATE law, has the following
data:
2024 2025
Sales 17,000,000 23,000,000
Cost of Sales 10,500,000 14,250,000
Operating Expenses 6,750,000 4,800,000
How much is the income tax payable for 2024?
a. P65,000
b. P130,000
c. P350,000
d. nil

55. A domestic corporation registered since 1998 provided the following data:
2021 2022 2023 2025
Gross Sales ₽25,000,000 P32,000,000 ₽29,000,000 P35,000,000
Cost of goods sold 18,000,000 20,000,000 19,000,000 18,000,000
Business expenses 7,200,000 11,900,000 10,250,000 9,000,000
Additional information:
• Remaining Net Operating Loss (NOL) from 2018: P50,000
• NOL incurred in 2020: P180,000
• Excess MCIT over RCIT in 2018: 200,000
• Excess MCIT over RCIT in 2020: 80,000
• Assets: P125,000,000
The income tax payable in 2024 should be:
a. P150,000
b. P277,500
с. P617,500
d: P1,527,500

The Next five 5) questions are based on the following:

Le Bron Corporation has the following information for 2024 taxable year:

QUARTER RCIT MCIT CWT

First 200,000 160,000 40,000
Second 240,000 500,000 60,000
Third 500,000 150,000 80,000
Fourth 300,000 200,000 70,000

Additional Information:
Excess MCIT from 2023: P60,000;
Excess tax credits from 2023: P20,000.

56. How much was the income tax payable for the first quarter?
а. ₽200,000
b. ₽160,000
c. P120,000
d. P80,000

57. How much was the income tax payable for the second quarter?
a. P660,000
b. P460,00
c. P200,000
d. ₽160,000

58. How much was the income tax payable for the third quarter?
a. P860,000
b. ₽120,000
с. P600,000
d. P140,000

59. How much was the annual income tax payable?

a. ₽1,260,000
b. P390,000
c. P230,000
d. P930,000

60. Using the same data in the preceding problem except that the MCIT during the 4th Quarter was P500,000. How much was the annual
income tax payable?
a. P330,000
b. P1,310,000
c. P380,000
d. P360,000

Use the following data for the next three (3) questions
East Star, a domestic corporation, sold shares of stock of a domestic corporation for ₽250,000 in 2024. The shares were acquired in 2018
for investment purposes at a cost of R100,000 and were sold directly to a buyer.

93. How much was the capital gains tax due?

а. P10,000 c. P22,500
b. P15,000 d. P45,000

94. How much is the capital gains tax assuming the shares sold were shares of a foreign corporation?
а. P10,000
b. P15,000
c. P22,500
d. nil

95. Assume the shares sold were from a domestic corporation but were not held for investment purposes. Assume further that the seller is
a dealer in securities. How much is the capital gains tax?
a. P10,000
b. P15,000
с. P22,500
d. nil

Use the following data for the next three (3) questions:
The following data were taken from the financial statements of Chen Corporation:
Philippines Abroad
Gross sales 10,000,000 5,000,000
Sales returns 200,000
Cost of goods sold 3,500,000 2,250,000
Operating expenses 2,800,000 1,100,000
Interest income from trade receivable 100,000 50,000
Interest income from BPI deposits-Phils. 100,000
Interest income from BPI deposits-USA 80,000
Interest income- FCDU 150,000
Income from money market placement 200,000 100,000
Dividend income from domestic corporation 75,000
Dividend income from Alpha Corporation 45,000
Dividend income from Omega Corporation 30,000
Royalty income - in general 30,000 25,000
Royalty income - books 20,000
Gain on sale of shares of stock of domestic corp. 120,000
held as capital asset thru local stock exchange;
Selling Price-P500,000
Gain on sale of shares of stock of domestic corp. 150,000
held as capital asset directly to a buyer
Selling Price-P650,000
Gain on sale of real property in the Philippines 5,000,000
classified as capital asset. Cost = P4M; ZV = P8M
Additional information:
• Total assets were valued at ₽80,000,000.
• The shares of stock in Alpha and Omega were acquired on January of the current taxable year.
102. How much is the income tax due and payable assuming the corporation is:
DC RFC
a. 1,674,000 2,038,500
b. 2,038,500 1,093,500
c. 1,383,750 2,161,250
d. 1,395,000 2,161,250
103. How much is the final withholding tax on passive income assuming the corporation is:
DC RFC
a. 81,250 81,250
b. 90,500 90,500
c. 92,500 81,250
d. 92,500 92,500
104. How much is the total capital gains tax assuming the corporation is:
DC RFC NRFC
a. 22,500 22,500 22,500 CGT RFC and NRFC 150,000x15%=22,500
b. 550,000 10,000 22,500
c. 562,500 22,500 22,500
d. 562,500 10,000 10,000

113. (Based on RR 5-2021 and RR 3-2022): CREATIVE School University (CSU) is a private educational institution with an issued permit
to operate from the Commission on Higher Education (CHED). It is registered with the Securities and Exchange Commission as a private
domestic corporation. SU uses a fiscal year accounting ending July 31 of each year. On July 31, 2024, the following relevant data were
provided:
Gross receipts/sales:
• Education related 8,000,000
• Other unrelated business 10,000,000, 18,000,000
Related cost of service 2,000,000
Related operating expenses 1,000,000
Unrelated cost of service 3,000,000
Unrelated operating expenses 2,000,000
How much is the income tax payable for the fiscal year ending July 31, 2024?
a. P100,000
b. P150,000
c. P1,000,000
d. P2,500,000

36. A domestic corporation has the following income and expenses for 2024 taxable year:
Gross sales P20,000,000
Cost of sales 10,000,000
Operating expenses 3,800,000
Assets 48,0000,000
How much is the income tax due?
a. P1,240,000
b. P1,550,000
c. P1,860,000
d. P3,000,000

37. ABC Corporation, a domestic corporation has the following income and expenses for 2024 taxable year:
Gross sales P20,000,000
Cost of sales 10,000,000
Operating expenses 6,500,000
How much is the income tax due?
a. P600,000 c. P800,000
b. P700,000 d. P875,000

38. Hananiah Corporation, a corporation engaged in business in the Philippines and abroad
Gross Income, Philippines P975,000
Expenses, Philippines 750,000
Gross Income, Malaysia 770,000
Expenses, Malaysia 630,000
Interest on bank deposit 25,000
Assets 15,000,000
Determine the income tax due assuming the corporation is: has the following data for 2024 taxable year:
Domestic Res. Foreign Corp. Non-resident Foreign Corp.
a. P116,800 P72,000 P320,000
b. P109,500 P67,500 P300,000
c. P91,250 P56,250 P250,000
d. P73,000 P56,250 P250,000

Use the following data for the next four (4) questions:
A domestic corporation has the following income and expenses for 2024 taxable year:
Phils. Abroad
Gross sales ₽100,000,000 P50,000,000
Cost of sales Р40,000,000 20,000,000
Operating expenses 30,000,000 12,000,000

30. How much is the income tax due?

a. P12,000,000 c. P14,400,000
b. P13,200,000 d. P18,000,000

31. How much is the income tax due assuming the Company's total assets amounted to R80 million only?
a. P9,600,000
b. P12,000,000
c. P14,400,000
d. P18,000,000

32. How much is the income tax due assuming the company is a resident foreign corporation?
a. P7,500,000
b. P13,200,000
c. P14,400,000
d. P18,000,000

33. How much is the income tax due assuming the company is a nonresident foreign corporation
a. P7,500,000
b. P13,200,000
c. P14,4400,000
d. P15,000,000
Name______________________________________________ date: ____________

ANSWERS
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25

1. ABC corp. leases a residential property for its manager. It pays for the monthly house rental of
its manager in the amount of 60,000How much fringe benefit tax should be remitted by ABC
for the current year?
a. 16,154
b. 32,307
c. 48,462
d. 96,462

2. B&b corporation which is not engaged in trade or business in the Philippines in 2023
It had a gross income of 1,500,000 and expenses of 650,000 on its isolated transaction in the
Philippines
a. 212500
b. 300,000
c. 375,000
d. 450,000

A domestic corporation has the following income and expenses for the year

PHIL ABROAD
GROSS SALES 100,000,000 50,000,000
COST OF SALES 40,000,000 20,000,000
OPERATING EXPENSES 30,000,000 12,000,000

3. How much is the taxable net income for the year 2021?
a. 24,400,000
b. 48,000,000
c. 30,000,000
d. 49,000,00
4. How much is the income tax due assuming the taxable year is 2021?
a. 12,000,000
b. 13,200,000
c. 14,400,000
 d. 18,000,000
5. How much is the income tax due assuming the taxable year is 2021 and the company’s total
asset amounted to 80,000,000?
a. 9,600,000
b. 12,000,000
c. 14,400,000
d. 18,000,000

6. How much is the income tax due assuming

❖ The taxable year is 2021
❖ The corporation is a non-resident foreign corporation
a. 7,500,000
b. 13,200,000
c. 14,400,000
d. 15,000,000

Cyril corporation a domestic corporation and a retailer of goods has gross sales of 14,000,000 with a
cost of sales of 7,600,000 and allowable deductions of 2,500,000 for the calendar year 2021. It has
total assets of 150,000,000 as of December 31,2021 per audited financial statements includes the
land costing 50,000,000 and the building of 25,000,000 in which the business entity is situated,with
an aggregate amount of 75,000,000 as fixed asset

7. How much is the income tax due in 2021?

a. 60,000,000
b. 780,000
c. 975,000
d. 1,170,000

Yza Athena corporation, a corporation engaged in business in the Philippines and abroad has the
following data for 2021?

Gross income 975,000

Expenses, Philippines 750,000

Gross income, Malaysia 770,000

Interest on bank deposit 25,000

Assets 15,000,00

8. Determine the income tax due assuming the corporation is a resident foreign corporation
a. 72,000
b. 67,500
c. 56,250
d. 54,250
9. Determine the income tax due assuming the corporation is domestic corporation
a. 116,000
 b. 109,500
c. 73,000
d. 91,250
10. Determine the income tax due assuming the corporation non- resident foreign corporation
a. 320,000
b. 300,000
c. 220,000
d. 250,000

11. A domestic corporation was registered with the BIR IN 2018. What year would the first MCIT
will be imposed on such corporation?
a. 2020
b. 2021
c. 2022
d. 2023

CDE inc. a domestic corporation registered with BIR since 2015 has the following data for 2021 the
taxable year

Gross receipt 11,500,000

Discounts and allowances 2,500,000
Salaries of personal directly involved in rendering services 3,000,000
Salaries of administrative personnel 1,000,000
Fees of consultant directly involved in rendering services 500,000
Rentals of equipment used in rendering services 700,000
Rental of office space for use of administrative personnel 500,000
Other operating expenses 4,200,000
Assets 35,000,000

12. How much is the taxable net income loss?

a. (400,000)
b. (350,000)
c. (890,000)
d. (900,000)
13. How much is the income tax due and payable in 2021?
a. 0
b. 66,000
c. 48,000
d. 96,000

A domestic corporation in its 8th year of operation as of January 1 2021 classified as MSME under
CREATE LAW has the following data:
 2021 2022

Sales 17,000,000 23,000,000

Cost of sales 10.500.000 14,250,000

Operating expense 6,750,000 4,800,000

14. How much is the income tax payable?

a. 65,000
b. 130,000
c. 350,000
d. nil
15. what is the income tax payable in 2022?
a. 87,500
b. 675,000
c. 740,000
d. 1,110,000
16. Prior to the effectivity of CREATE LAW the president upon the recommendation of secretary of
finance may allow domestic and resident foreign corporation the option to be taxed on 15%
gross income provided:
I. The tax rate is 15%
II. Available only to firms whose ratio of cost of sales to gross sales or receipt from all
source does not exceed 55%
III. It shall be irrevocable for the 3 consecutive years during which the corporation is
qualified under the scheme
a. I only
b. I and ii only
c. I II AND III
d. None of the above
17. One of the following is incorrect. the 15% gross income tax on corporation prior to the
effectivity of CREATE LAW is?
a. Applicable to domestic corporation
b. Applicable to resident corporation
c. Applicable to non-resident corporation
d. all of the above

Kris incorporated sold its vacant lot to moca corporation for 10,000,000 which it is acquired at a cost of
5,000,000. The fair market value of the said property per tax declaration was 12,000,000 while its zonal
value was 15,000,000

18. how much is the income tax applicable on the transaction?

a. 600,000
b. 720,000
c. 900,000
d. 1,500,000
 19. Based on the preceding no. if the buyer of the property is the Philippine government or a
government owned and/or controlled corporation (GOCC) what type of income tax will apply on
the transaction?
a. Basic income tax
b. Capital gains tax
c. Either a or b at the option of the seller
d. Either a or b at the option of the buyer

A foreign corporation sold a condominium unit to Pedro for 10,000,000 which it acquired at a cost of
5,000,000. The fair market value of the said property per tax declaration was 12,000,000 while its zonal
value was 15,000,000

20. How much is the capital gains tax?

a. Nil
b. 600,000
c. 900,000
d. 720,000

21. Excess of minimum corporate income tax may be carried forward ____________.
a. For the three (3) immediately succeeding taxable years.
b. For the four (4) immediately succeeding taxable years.
c. For the five (5) immediately succeeding taxable years.
d. For the one hundred seventy eight (178) succeeding taxable years.
22. ABC corporation, a domestic corporation has the following income and expenses for 2021
taxable year
Gross sales 20,000,000
Cost of sales 10,000,000
Operating expenses 6,500,000

How much is the income tax due?

a. 600,000
b. 700,000
c. 800,000
d. 875,000

West star, a domestic corporation, sold shares of stocks of a domestic corporation for 250,000 the
shares were acquired in 2015 for the investment purposes at a cost of 100,000 and were sold
directly to the buyer.

23. Assuming the taxable year was 2019, how much was the capital gains tax due?
a. 10,000
b. 15,000
c. 22,500
d. 45,000
24. How much is the capital gains tax assuming the shares sold were shares of foreign corporation
and the sale was made during the effectivity of CREATE LAW?
A. 10,000
B. 15,000
C. 22,500
D. Nil

Bahala na college, a proprietary non-profit educational institution provided the following dat for
2021

Income from tuition fees 3,000,000

School miscellaneous fees 250,000
Income from canteen operations 750,000
Dividend income from:
Domestic corporation 100,000
Resident foreign corporation 50,000
Rent income 5,700,000
Operating expenses 4,125,000
Quarterly income tax payments 250,000

25. The income tax payable of the school is?

a. 37,500
b. 968,750
c. 1,212,500
d. 1,227,500
NAME: SCORE:
COURSE/YEAR: DATE:
INTERNAL CONTROL
1 6 11 16 21 26 31
2 7 12 17 22 27 32
3 8 13 18 23 28 33
4 9 14 19 24 29 34
5 10 15 20 20. 25 30 35

1. In a financial statement audit, the auditor is required to obtain an understanding of the entity's internal control to assess
the risks of material misstatement in the financial statements. The results of the understanding
A. Bear no relationship to the nature, timing, and extent of further audit procedures to be performed.
B. Must be reported to the stockholders and the SEC.
C. Are not reported to client management.
D. May be used as the basis for withdrawing from an audit engagement.

2. Which of the following most likely would not be considered an inherent limitation of internal control?
A. Management override C. Mistakes in judgment
B. Incompatible functions D. Collusion among employees

3. The primary objective of procedures performed to obtain an understanding of internal control is to provide an auditor
with
A. Knowledge necessary to plan the audit. C. Information necessary to prepare flowcharts.
B. A basis for modifying tests of controls. D. Evidence to use in reducing detection risk.

4. Proper segregation of duties reduces the opportunities for persons to be in positions to both
A. Establish internal control and authorize transactions. C. Record cash receipts and cash disbursements.
B. Perpetrate and conceal errors or fraud. D. Record transactions and prepare financial statements.

5. After considering a clients internal control, an auditor has concluded that the system is well designed and is functioning
as anticipated. Under these circumstances, the auditor would most likely
A. Cease to perform further substantive tests
B. Not increase the extent of planned substantive test
C. Increase the extent of anticipated analytical procedures
D. Perform all tests of controls to the extent outlined in the pre-planned audit program

6. After studying and evaluating a client's existing internal control, an auditor has concluded that the policies and
procedures are well designed and functioning as intended. Under these circumstances, the auditor would most likely
A. Perform further control tests to the extent outlined in the audit program.
B. Determine the control policies and procedures that should prevent or detect errors and fraud.
C. Set detection risk at a higher level than would be set under. conditions of weak internal control.
D. Set detection risk at a lower level than would be set under conditions of weak internal control

7. Audit evidence concerning proper segregation of duties normally is best obtained by:
A. direct personal observation of the employee who applies control procedures.
B. making inquiries of co-workers about the employee who applies control procedures.
C. preparation of a flowchart of duties performed and available personnel.
D. inspection of third-party documents containing the initials of who applied control procedures.
8. Based on a study and evaluation completed at an interim date, the auditor concludes that no significant internal
accounting control weaknesses exist. The records and procedures would most likely be tested again at year-end if
A. Compliance tests were not performed by the internal auditor during the remaining period
B. The internal accounting control system provides a basis for reliance in reducing the extent of substantive testing
C. The auditor used non-statistical sampling during the interim period compliance testing
D. inquires and observations lead the auditor to believe that conditions have changed

9. Before relying on the system of internal control, the auditor obtains a reasonable degree of assurance that the internal
control procedures are in use and operating as planned. The auditor obtains this assurance by performing planned
A. Substantive tests C. Transaction tests
B. Tests of controls D. Tests of trends and ratios

10. When auditing a private company, the auditor should obtain an understanding of internal control sufficient to:
A. provide reasonable protection against client fraud and defalcations by client employees.
B. assess control risk
C. provide a basis for suggestions to the client for improving the accounting system.
D. provide a method for safeguarding assets, checking the accuracy and reliability of accounting data, promoting
operational efficiency, and encouraging adherence to prescribed managerial policies.

11. Which of the following procedures would an auditor most likely perform in planning a financial statement audit?
A . Inquiring of the client's legal counsel concerning pending litigation.
B. Comparing the financial statements to anticipated results.
C. Examining computer generated exception reports to verify the effectiveness or internal control.
D. Searching for unauthorized transactions that may aid in detecting unrecorded liabilities.

12. According to PSA 400, which of the following is correct regarding internal control system?
A. Internal control system refers to all the policies and procedures adopted by the auditor to assist in achieving
management's objective.
B. A strong environment, by itself, ensure the effectiveness of the internal control system.
C. In the audit of financial statements, the auditor is only concerned with those policies and procedures within the
accounting and internal control systems that are relevant to the financial statements.
D. The internal control system is confined to those matters which relate directly to the functions of the accounting system.

13. Which of the following is correct about internal control?

A. Accounting and internal control systems provide management with conclusive evidence that objectives are reached.
B. One of the inherent limitations of accounting and internal control systems is the possibility that the procedures may
become inadequate due to changes in conditions, and compliance with procedures may deteriorate.
C. Most internal controls tend to be directed at non-routine transactions.
D. Management does not consider costs of the accounting and internal control systems.

14. Corporate directors, management, external auditors, and internal auditors all play important roles in creating a proper
control environment. Top management is primarily responsible for
A. Establishing a proper environment and specifying overall internal control.
B. Reviewing the reliability and integrity of financial information and the means used to collect and report such information.
C. Ensuring that external and internal auditors adequately monitor the control environment.
D. Implementing and monitoring controls designed by the board of directors.
15. Which of the following best describe the interrelated components of internal control?
A. Organizational structure, management philosophy, and planning.
B. Control environment, risk assessment, control activities, information and communication
systems, and monitoring.
C. Risk assessment, backup facilities, responsibility accounting and natural laws.
D. Legal environment of the firm, management philosophy, and organizational structure.

16. In an audit of financial statements, an auditor's primary consideration regarding a control is whether it
A. Reflects management philosophy and operating style
B. Affects management FS assertion
C. Provides adequate safeguards over access to assets
D. Enhanced management decision making processes

17. Which of the following statements about internal control is correct?

A. Properly maintained internal controls reasonably assure that collusion among employees cannot occur.
B. Establishing and maintaining internal control is the internal auditor's responsibility.
C. Exceptionally strong control allows the auditor to eliminate substantive tests. d.
D. The cost-benefit relationship should be considered in designing internal control.

18. The ultimate purpose of assessing control risk is to contribute to the auditor's evaluation of the risk that
A. Tests of controls may fail to identify controls relevant to assertions.
B. Material misstatements may exist in the financial statements.
C. Specified controls requiring segregation of duties may be circumvented by collusion.
D. Entity policies may be overridden by senior management.

19. A proper understanding of the client's internal control is an integral part of the audit planning process. The results of the
understanding a.
A. Must be reported to the shareholders and the SEC.
B. Bear no relationship to the extent of substantive testing to be performed.
C. Are not reported to client management.
D. May be used as the basis for withdrawing from an audit engagement.

20. An entity should consider the cost of a control in relationship to the risk. Which of the following controls best reflects
this philosophy for a large peso investment in heavy machine tools?
A. Conducting a weekly physical inventory.
B. Placing security guards at every entrance 24 hours a day.
C. Imprinting a controlled identification number on each tool.
D. Having all dispositions approved by the vice president of sales.

20. The ultimate purpose of assessing control risk is to contribute to the auditor's evaluation of the risk that
A. Material misstatements may exist in the financial state-ments.
B. Specified controls requiring segregation of duties may be circumvented by collusion.
C. Entity's control may be overridden by management.
D. Tests of controls may fail to identify procedures relevant to assertions.

21. An auditor assesses control risk in terms of

A. Types of potential fraud. C. Specific control activities.
B. Financial statement assertions. D. Control environment elements.
22. In performing tests of the operating effectiveness of an entity's controls, an auditor selects from a variety of techniques,
including
A. Reperformance and observation. C. Comparison and confirmation.
B. Inquiry and analytical procedures. D. Inspection and verification.

23. An auditor intends to perform tests of control on a client's cash disbursements procedures. If the control procedures leave
no audit trail of documentary evidence, the auditor most likely will test the procedures by
A. Inquiry and analytical procedures. C. Analytical procedures and confirmation.
B. Inquiry and observation. D. Confirmation and observation.

24. In an audit of financial statements, an auditor's primary consideration regarding

internal control is whether it
A. incorporates management's philosophy and operating style.
B. affects management's financial statement assertions.
C. provides adequate safeguards over access to assets.
D. supports management's decision-making processes.

25. The procedures to test effectiveness of control policies and procedures in

support of a reduced assessed control risk are called
A. tests of transactions. C. tests of controls.
B. analytical tests. D. a walk-through.

26. The actual operation of an internal control system may be most objectively
evaluated by
A. Completing a questionnaire and flowchart related to the accounting system in
the year under audit.
B. A review of the previous year's audit work papers to update the report of the
internal control evaluation.
C. A selection of items processed by the system and determination of the
presence or absence of errors and compliance deviations.
D. Substantive tests of accounts balances based on the auditor's assessment of
internal control strength

27. The auditor places, primary emphasis on controls over

I Classes of transactions
II. Account balances
A. I only. C. both I and II, because they are equally weighted.
B. II only. D. both I and II, because they vary from client to client

28. The three key concepts that underlie the study of an internal control structure and
the assessment of control risk would not include a criterion that
A. the control risk may range from zero to 100%.
B. Management, not the auditor, must establish and maintain the entity's
controls.
C. the internal control structure provides reasonable, but not absolute,
assurance that the financial statements are fairly sated.
D. the internal control structure can never be regarded as completely effective.
29. Even with the most effectively designed internal control structure, the auditor must obtain audit evidence, beyond testing
the controls, for every
A. Financial statement account.
B. Material financial statement account.
C. Financial statement account that will be relied upon by third parties.
D. Transaction

30. The primary purpose of performing controls is to provide reasonable assurance

that:
A. The internal control is effective. C. Transactions are recorded at the amounts executed.
B. The accounting system is documented accurately. D. All control activities leave visible evidence

31. A small entity may use less formal means to ensure that internal control objectives are achieved. For example, extensive
accounting procedures, sophisticated accounting records, or formal controls are least likely to be needed if
A. Management is closely involved in operations
B. The entity is involved in complex transactions
C. The entity is subject to legal or regulatory requirements also found in larger entities.
D. Financial reporting objectives have been established

32. Which of the following may represent the biggest challenge smaller public companies. face in implementing effective
internal control?
A. lack of expertise C. limited resources
B. reduced importance D. limited available guidance

33. The auditor's consideration of a company's internal control is:

A. required under the Philippine Accountancy Act. C. required by the Code of Ethics.
B. required by PSA. D. recommended by the SEC.

34. The auditors primary purpose in auditing the clients system of internal control over financial reporting is:
A. To prevent fraudulent financial statements from being issued to the public.
B. To evaluate the effectiveness of the company's internal controls over all relevant assertions in the financial statements.
C. to report to management that the internal controls are effective in preventing misstatements from appearing on the
financial statements.
D. To efficiently conduct the audit of financial statements.

35. Auditing standards require the auditor to obtain an understanding of the client's internal control structure
A. For every audit
B. For first time audits.
C. Sufficient to find any frauds which may exist.
D. Whenever it would be appropriate
 Saint Ferdinand College
College of Accountancy
TAXATION

Name: Score:
Course and Year: Date:

FINALS Drill
INSTRUCTIONS: Write your final answers on the answer sheet provided below. STRICTLY NO ERASURES.

1. 6. 11. 16. 21.

2. 7. 12. 17. 22.
3. 8. 13. 18. 23.
4. 9. 14. 19. 24.
5. 10. 15. 20. 25.

1-4. Mr. COH is a partner of Triple C Partnership, a partner in trade, and owns 50% interest. The gross sales of the
partnership amounted to P25,000,000 for taxable year 2024. The record cost of sales and operating expenses were
P12,500,000 and P5,280,000, respectively.

1. How much is the net income for distribution to partners?

a. 3,062,500 c. 7,250,000
b. 5,437,500 d. 12,250,000

2. How much is the share in income of Mr. COH?

a. 0 c. 2,718,750
b. 1,359,375 d. 5,437,500

3. How much should be withheld by the partnership in the share in income of Mr. COH?
a. 0 c. 271,875
b. 135,938 d. 543,750

4. How much is the income tax payable of Mr. COH?

a. 0 c. 271,875
b. 135,938 d. 543,750

5. Samahan ng mga Nagkakaisang Manggagawa ng Bagong Silang is a labor organization registered with the
Department of Labor and Employment. It collected union dues from its members amounting to P400,000, and it likewise
operated a memorabilia shop in which it earned an income of P350,000. The said labor organization used P600,000 of
the proceeds for the professional development of its union members. How much of the above amount is subject to the
regular corporate income tax of 30%?
a. 350,000 c. 600,000
b. 50,000 d. none

6. Angkas Akoh Plz Corporation is a resident foreign corporation with branches nationwide, including the Philippines.
Its Philippines branch had an income of P10,000,000 in 2020, and it earmarked P8,000,000 for remittance. It actually
remitted P7,000,000. How much is the branch profit remittance tax due of the Philippine branch?
a. 0 c. 1,200,000
b. 1,050,000 d. 1,500,000
7. SANAH PASS A DOUGH offshore banking unit had the following offshore banking transactions within the
Philippines during the taxable quarter ending September 30, 2021:

Income
With local commercial banks 1,200,000
With domestic corporations 3,400,000
With other offshore banking units 4,700,000
With non-residents 2,650,000
TOTAL 11, 950,00
If the offshore banking unit can claim allowable deductions of P2,830,000, how much is the offshore banking unit’s
income tax due?
a. 912,000 c. 2,280,000
b. 1,950,000 d. 143,143
8. On January 1, 2020, Ms. D. Nagkulang invested P1,000,000 to BDO's 5-year, tax-free time deposit. The long-term
deposit pays 10% annual interest every January 1. In need of cash, she pre-terminated her investment on July 1, 2023.
How much is the final tax due in 2023?
a. P6,000 c. R17,500
b. P12,000 d. P42,000

9. Assuming the same information in the preceding number, except that the investment was made by a domestic
corporation, how much final tax is withheld in the year of pre- termination?
a. P2,500 c. P10,000
b. P6,000 d. P12,000

10. During 2023, a domestic corporation derived the following items of revenues:
A. Gross receipts from a trading business, P500,000
B. Interests from money placements in the banks, P30,000 C. Dividends from its stock investments in domestic
corporations, P20,000
D. Gains from stock transactions through the Philippine Stock Exchange, P50,000
E. Proceeds under an insurance policy on the lost of goods, P100,000
How much should the corporation report as taxable income?
a. P500,000 c. P600,000
b. P550,000 d. P650,000

11. MANAHIMIK Corporation, a domestic corporation and a retailer of goods has gross sales of P1,400,000,000.00
with a cost of sales of P560,000,000.00 and allowable deductions of 150,000,000.00 for the calendar year 2024. Its total
assets of P180,000,000.00 as of December 31, 2024 per Audited Financial Statements includes the land costing
P50,000,000.00 and the building of P25,000,000.00 in which the business entity is situated, with an aggregate amount
of P75,000,000.00 as Fixed Assets. How much is the income tax due in 2024?
a. P125,000,000 c. P172,500,000
b. P138,000,000 d. P207,000,000

12. BINI MOCHA Corporation, a domestic corporation and a retailer of goods has gross sales of P14,000,000 with a
cost of sales of P7,600,000 and allowable deductions of 2,500,000 for the calendar year 2024. Its total assets of
P150,000,000 as of December 31, 2024 per Audited Financial Statements includes the land costing P50,000,000 and the
building of P25,000,000 in which the business entity is situated, with an aggregate amount of P75,000,000 as Fixed
Assets. How much is the income tax due in 2024?
a. P60,000,000 c. P975,000
b. P780,000 d. P1,170,0000

13. BINI BACKBURNER Corporation, a resident corporation and a retailer of goods has gross sales of P14,000,000
with a cost of sales of P7,600,000 and allowable deductions of 2,500,000 for the calendar year 2024. Its total assets of
P150,000,000 as of December 31, 2024 per Audited Financial Statements includes the land costing P50,000,000 and the
building of P25,000,000 in which the business entity is situated, with an aggregate amount of P75,000,000 as Fixed
Assets. How much is the income tax due in 2024?
a. P60,000,000 c. P975,000
b. P780,000 d. P1,170,0000
14. A foreign corporation sold a condominium unit to Pedro for P10,000,000 which it acquired at a cost of P5,000,000.
The fair market value of the said property per tax declaration was P12,000,000 while its zonal value was P15,000,000.
How much is the capital gains tax?
a. P600,000 c. P900,000
b. P720,000 d. nil

15. Kapa Good Partnership is a general professional partnership formed by medical doctors. The results of operations
for year 2023, its 5th year of operations, were as follows:
Gross Receipts 30,000,000
Cost of services 18,000,000
Salaries expense 5,800,000
Rent expense 2,500,000
Utilities expense 350,000
Depreciation expense 170,000
Transportation expenses 230,000
Miscellaneous expenses 90,000
Determine the income tax due of and fill-out the appropriate income tax return
a. P0 c. P715,000
b. P572,000 d. P858,000

16. East Star, a domestic corporation, sold shares of stock of a domestic corporation for P250,000 in 2024. The shares
were acquired in 2018 for investment purposes at a cost of P100,000 and were sold directly to a buyer.
How much is the capital gains tax assuming the shares sold were shares of a foreign corporation?
a. P10,000
b. P15,000
c. P22,500
d. nil

17. South West Corporation, a resident foreign corporation, sold shares of stock of a domestic corporation for P500,000.
The shares were acquired three (3) years ago for investment purposes at a cost of P300,000. The shares were sold outside
of the local stock exchange. How much is the capital gains tax?
a. P10,000 c. P22,500
b. P15,000 d. P30,000

18-20. The University of Saint Augustine Philippines (USAP)was a domestic educational institution established in
1432. It is the first to offer Accountancy, Law, and Medicine in Asia. It has produced many distinguished alumni
including presidents, statemen, and saints. For the taxable year ending December 31, 2025, USAP had the following
results of operations:
Gross Receipts:
From tuition fees 14,000,000
From rentals 2,500,000
From sale of school merchandise 6,300,000
Total Gross Receipts 22,800,000
Less: Cost of Services (13,450,000)
Gross Profit 9,350,000
Less: Operating Expenses (5,240,000)
Net Income 4,110,000
Included in the operating expenses is a full-year depreciation expense in the amount of P1,000,000 for a newly
acquired building with a useful life of five (5) years. The entire gross receipts were used for the acquisition of a land
for the expansion of the educational institution.

18. If University of Saint Augustine Philippines is a non-stock, non-profit educational institution, how much is income
tax due?
a. 1,233,000 c. 822,000
b. 411,000 d. 0
19. If University of Saint Augustine Philippines is a proprietary educational institution and it did not opt to deduct the
capital outlay as an expense, how much is income tax due?
a. 1,233,000 c. 511,000
b. 411,000 d. 0

20. If University of Saint Augustine Philippines is a proprietary education institution, and assuming the taxable year is
2021. and it did not opt deduct the capital outlay as an expense, how much is income tax due?
a.511,000 c. 41,100
b. 411,000 d. 0

21-23. Transit earned the following items of income for the taxable year ending December 31,2021.
Dividends from domestic corporation 480,000
Receipts from rental of machinery 330,000
Interest income from expanded FCDS 140,000
Royalties from literary compositions 190,000
1,140,000

21. If Transit is a partnership constituted in the Philippines, which of the following statements is true?
a. P1,140,000 will be subject to regular income tax at the rate of 0 to 35%
b. P330,000 will be subject to regular income tax at the rate of 25%.
c. All items will not be subject to regular income tax as they are passive income and are therefore subject to final
withholding tax.
d. All items will not be subject to any income tax as Transit will merely considered as pass-through entity.

22. If Transit is a resident foreign corporation, how much is final withholding tax?
a. 10,500 c. 48,500
b. 38,000 d. 59,000

23. If Transit is a non resident foreign corporation, how much is final withholding tax?
a. 144,250 c. 202,000
b. 153,750 d. 0

24-25. KFC University is a proprietary educational institution. It has the following selected information for the taxable
year 2023:
Tuition fees P12,800,000
Miscellaneous fees 1,800,000
Interest on bank deposits 12,300
Rent income 350,000
Salaries and bonuses, all personnel 7,500,000
Other operating expenses 3,500,000
Additional information: A new school building was built and finished on April 1, 2023 at a cost of P2,000,000 with a
depreciable life of 50 years.

24. Assuming the University opted to claim the cost of construction as an outright expense, the income tax payable
should be:
a. P107,500
b. P147,000
c. P344,000
d. P487,500

25. Assuming the University opted to capitalized the cost of building construction, the income tax payable should be:
a. P0
b. P215,600
c. P392,000
d. P980,000
 Taxation
Drills
Business Taxation

Name:___________________________ Score:
Date:__________________________

Ms. Queen Bee signified her intention to be taxed at 8% income tax rate on gross
sales in her first quarter return. However, her gross sales during the taxable year has
exceeded the VAT threshold.

First Quarter Second Third Quarter Fourth Quarter

Quarter
Total Sales P500,000 P1,000,000 P1,500,000 P4,000,000
Cost of Sales 300,000 500,000 700,000 1,500,000
Operating 100,000 200,000 250,000 500,000
Expenses

1. How much is the percentage tax 2. How much is output VAT for the
under Section 116 for the third quarter? fourth quarter, if any?
a. P210,000 a.P840,000
b. Not subject to Sec. 116 b. P120,000
c. P 45,000 c. P480,000
d. None of the choices d. None of the choices

In 2018, Mr. Bean, a financial comptroller of Stalk Company, earns annual

compensation of P1,500,000, inclusive of 13th month and other benefits in the
amount of P80,000 and mandatory SSS contribution of P3,500 and Philhealth
contribution of P2,000. Aside from his employment income, he owns a convenience
store, VAT-registered, with gross sales of P3,000,000. Sales discount amounts to
P300,000; sales returns and allowances amount to P150,000. His cost of sales and
operating expenses are P1,000,000 and P600,000 respectively and with non-
operating income of P100,000. Payments for the first three (3) quarters amount to
P300,000.

3. How much is the out VAT, if any?

a. P306,000 c. P342,000
b. P360,000 d. None of the choices

Mr. Kenneth Daniels owns a nightclub and videoke bar, with gross sales/receipts of
P2,500,000.00. His cost of sales and operating expenses are P1.000,000.00 and
P600,000.00, respectively, and with non-operating income of P100,000.00.
4. How much is the Other Percentage Tax?
b. P450,000
a.
c. P75,000
b. P250,000
d. None of the choices

Kris Griffin Company, service provider, presented to you the following income
statement in line with the same company’s financial statements:
KRIS Griffin COMPANY
INCOME STATEMENT
For the Year Ended December 31, 2018

Sales P10,350,000
COGS 7,050,000
GP 3,300,000
Operating Expenses:
Selling P675,000
Administrative 1,050,000 1,725,000
Net Income P1,575,000
Kris Griffin Company disclosed the following information:
 Accounts receivable decreased  Accrued expenses payable
P540,000 during the year. decreased P150,000 during the year.
 Prepaid expenses increased  Administrative expenses include
P255,000 during the year. depreciation expense of P90,000.
 Accounts payable to suppliers of  Inventories decreased by P450,000.
merchandise decreased P412,500
during the year.
5. What is the total amount of cash received from customers during the year?
a. P10,890,000 b. P10,477,500
c. P10,350,000 d. None of the choices

6. How much is output tax?

a. P1,306,800 c. P1,242,000
b. P1,257,300 d. P1,177,200

7. What is the total basis of input tax on supplies and operating expenses (purchase
of services) during the year?
a. P9,052,500 c. P7,012,500
b. P8,640,000 d. None of the choices

8. - What is the input tax during the year?

a. P1,086,300 c. P841,500
b. P1,036,800 d. None of the choices
9. Assuming the taxpayer is seller of goods, how much is the output tax for the year?
a. P1,306,800 c. P1,242,000
b. P1,257,300 d. None of the choices

A domestic common carrier with Certificate of Public Convenience (CPC) has the
following data for the year 2018:
Gross receipts: P3,000,000
Cost of services: 1,000,000
Operating expenses: 500,000

10. Assuming the domestic common carrier is by land, how much is the common
carrier’s tax?
a. P90,000 c. P45,000
b. P60,000 d. None of the choices

11. Assuming the domestic common carrier is by air, VAT-registered, how much is
the Value Added Tax?
a. P360,000 c. Not subject to VAT
b. P240,000 d. None of the choices

12. Assuming the entity is allowed to transport passenger but does not have a CPC,
how much is the percentage tax, if any?
a. P90,000 c. P45,000
b. P60,000 d. None of the choices

BSA, non-VAT registered lessor of residential and commercial units had the following
data for the first and second quarters of 2018:
1st Qrt 2nd Qrt
Gross receipts from lease of residential
units
With monthly rental of P13,000 per unit P2,500,000 P2,300,000
With monthly rental of P18,000 per unit 1,000,000 1,200,000
Gross receipts from lease of commercial 2,300,000 2,400,000
units
Input tax paid from VAT suppliers 150,000 120,000
13. How much is the business tax of BSA for the first quarter?
a. P396,000 c. P174,000
b. P246,000 d. P 99,000

14. How much is the business tax of BSA for the first quarter?
a. P708,000 c. P312,000
b. P432,000 d. P108,000

15. How much is the business tax of BSA for the second quarter of 2018 assuming he
registered as a VAT taxpayer at the start of the second quarter 2018?
a. P708,000 c. P432,000
b. P588,000 d. P312,000
16. Assuming BSA is VAT-registered taxpayer instead of Non-VAT registered taxpayer,
how much is the business tax due for the first quarter of 2018?
a. P696,000 c. P396,000
b. P546,000 d. P246,000

Tagalabada, VAT-registered company is engaged in the laundry business. During the

first quarter of 2018, the following information were made available:

Net revenue, first quarter 2018 P1,000,000

Receivables from customers, January 1, 2018 224,000
Receivables from customers, March 31, 2018 336,000
Creditable withholding VAT, first quarter 2018 5,000
VAT purchases other than capital goods, first quarter 2018 300,000
VAT purchases, capital goods, first quarter 2018 (all in January 2018) 1,200,000

Receivable balances are all income related and are exclusive of VAT. Revenue and
purchases are VAT exclusive. Capital goods are estimated to have a useful life of 10
years.

17. Compute item 19B (Output tax) of 18. Compute item 22 (Total available
BIR Form No. 2550Q input tax) of BIR Form No. 2550Q
a. P132,000 c. P108,000 a. P185,000 c. P43,200
b. P120,000 d. P106,560 b. P180,000 d. P36,000

19. Compute the deferred input tax as

of March 31, 2018?
a. P141,600 c. P136,800
b. P140,400 d. None of the choices

20. Compute item 23C (Input tax allocated to exempt sales) of BIR Form No. 2550Q
a. P13,000 closed to expense
b. P11,000 closed to expense
c. P2,200 closed to income
d. None of the choices

A VAT-registered exporter, who is also engaged in VAT-exempt sales, has the

following VAT-exclusive data for the first calendar quarter of the current year:

Export sales P4,000,000

VAT-exempt domestic sales 6,000,000
Purchases attributed to export sales 2,000,000
Purchases attributed to all sales 1,000,000
21. How much is going to be reflected in Line 19 of BIR Form 2550Q (Total
sales/receipts)?
a. P10,000,000 c. P4,000,000
b. P 6,000,000 d. Zero

22. How much is the total VAT-subject sales?

a. P10,000,000 c. P4,000,000
b. P 6,000,000 d. Zero

23. What amount of input tax is chargeable to cost or expenses?

a. P216,000 c. P120,000
b. P144,000 d. P 72,000

24. What amount of input tax can be claimed as tax credit or refund?
a. P360,000 c. P240,000
b. P288,000 d. None

A lessor, not VAT-registered, rents his 5 commercial and 20 residential units for
monthly rent of P50,000 and P15,000 per unit, respectively. His accumulated gross
receipts during the taxable year amounted to:

Rent from 5 commercial units (P50,000 per unit x 12) P3,000,000

Rent from 20 residential units (P15,000 per unit x 12) 3,600,000
Aggregate gross receipts P6,500,000

25. A senior citizen is engaged in the sale of VATable goods. His gross annual sales,
however, do not exceed the VAT threshold and he is not VAT-registered. During the
first quarter year 2022, his gross sales amounted to P250,000. How much is the
business tax due, if any?
a. P7,500
b. P5,000
c. P2,500
d. None, senior citizens are exempt from business taxes

26. A VAT-registered taxpayer service provider has the following data taken from the
books of account for the month of January 2021:
 Accounts receivable, January 1, 2021 P 560,000
 Sales on account for the month of January 1,120,000
 Services paid in cash for the month of January 336,000
 Accounts receivable, January 31, 2021 784,000
 Cash purchases for the month of January 2021 448,000
How much is the output tax for the month of January, 2021 using 12% rate?
a. P201,600 c. P132,000
b. P147,840 d. P96,000
ABS-GMA, not VAT-registered, is a radio-TV broadcasting franchise grantee. The
previous year, its gross receipts did not exceed P 10,000,000. In the first month of
the current year, it had the following data:

Gross receipts, sale of airtime P 2,000,000

Payments received from user of radio station’s
communications facilities for overseas communications 500,000
Rentals of office spaces 3,500,000
Business expenses 700,000

27. How much was the franchise tax due?

a. P75,000 c. P50,000
b. P60,000 d. P20,000

28. How much was the overseas communications tax?

a. P250,000 c. P75,000
b. P200,000 d. P50,000

29. How much is output VAT, if any?

a. P720,000 c. P420,000
b. P660,000 d. None

30. Ms. Mysterious receives a package of goods from her sister who lives in
California, United States of America. Ms. Mysterious will use the goods for personal
purposes. She is not VAT-registered. Which of the following statements is correct in
connection with the receipt of a package?
a. Ms. Mysterious shall be subject to VAT on importation.
b. Ms. Mysterious shall not be subject to VAT on importation because she is not VAT
registered.
c. Ms. Mysterious shall not be subject to VAT on importation but shall be subject to
VAT on sales.
d. None of the choices.
 Saint Ferdinand College
College of Accountancy
Operations Auditing
Name: _________________________________________ Score: ____________

Course and Year: _________________________________ Date: _____________

Finals Drill __ - Internal Control

INSTRUCTIONS: Write your final answers on the answer sheet provided below. STRICTLY NO ERASURES.

1. 11. 21. 31.

2. 12. 22. 32.
3. 13. 23. 33.
4. 14. 24. 34.
5. 15. 25. 35.
6. 16. 26. 36.
7. 17. 27. 37.
8. 18. 28. 38.
9. 19. 29. 39.
10. 20. 30. 40.

1. Which of the following is not one of the three primary objectives of effective internal control?
A. Reliability of financial reporting.
B. Efficiency and effectiveness of operations.
C. Compliance with laws and regulations.
D. Assurance of elimination of business risk.

2. The primary responsibility for establishing and maintaining an internal control rests with
A . The external auditors
B. The internal auditors
C. Management and those charged with governance
D. The controller or the treasurer

3. Which of the following controls is not usually performed in the accounts payable department?
A. Indicating on the voucher the affected asset and expense accounts to be debited.
B. Approving vouchers for payment by having an authorized employee sign the vouchers.
C. Accounting for unused prenumbered purchase orders and receiving reports.
D. Matching the vendors invoice with the related purchase requisition, purchase order, and receiving report.

4. An auditor may decide to assess control risk at the maximum level for certain assertions because the auditor
believes
A. Controls are unlikely to pertain to the assertions.
B. The entity’s control components are interrelated.
C. Sufficient appropriate audit evidence to support the assertions is likely to be available.
D. More emphasis on tests of controls than substantive tests is warranted.

5. Which of the following deal with ongoing or periodic assessment of the quality of internal control by
management?
A. Quality control activities
B. Monitoring activities
C. Oversight activities
D. Management activities

6. Which of the following is not one of the components of an entity’s internal control?
A. Control risk
B. Control activities
 C. Information a and communication
D. The control environment

7. An auditor should consider two key issues when obtaining an understanding of a clients internal controls.
These issues are
A. The effectiveness and efficiency of the controls.
B. The frequency and effectiveness of the controls.
C. The design and implementation of the controls.
D. The implementation and efficiency of the controls.

8. In an auditor‘s consideration of internal control, the completion of a questionnaire is most closely associated
with which of the following?
A. Separation of duties
B. Flowchart accuracy
C. Understanding the system
D. Tests of controls

9. Test of controls are directed toward the control’s

A . Efficiency
B. Effectiveness
C. Efficiency and effectiveness
D. Cost benefit ratio

10. Which of the following procedures most likely would be included as part of an auditor’s tests of control
procedures?
A. Inspection
B. Reconciliation
C. Confirmation
D. Analytical procedures

11. An auditor considers internal control in order to

A. Determine whether assets are safeguarded
B. Suggest improvements in internal control.
C. Plan audit procedures
D. Express an opinion

12. Which of the following is least likely to be an evidence of effectiveness of controls?

A. Cancelation of supporting document.
B. The policy of documenting the usage of computer program
C. Confirmation of bank balances.
D. Signatures on authorization forms.

13. Control testing is performed in order to determine whether or not

A. The assessed level of control risk can be reduced
B. Necessary controls are absent
C. Incompatible functions exist
D. Material peso errors exist

14. To obtain an understanding of the relevant policies and procedures of internal control, the auditor performs
all of the following except:
A. Make inquiries
B. Make observations
C. Inspect documents and records
D. Design substantive tests

15. Tests of controls are used to test whether controls are

A. Operating effectively
B. Placed in operation (implemented)
C. Properly accumulated into balance sheet totals
 D. Properly documented by the client

16. Which of the following is an inherent limitation of any client‘s internal control?
A. The benefits expected to be derived from effective internal control should not exceed the costs of such
control.
B. The competence and integrity of client personnel provide an environment conducive to control and
provide assurance that effective control will be achieved.
C. The procedures that are designed to assure the execution and recording of transactions in accordance
with proper authorizations are effective against frauds perpetrated by management
D. The procedures whose effectiveness depends on segregation of duties can be circumvented by collusion.

17. Of the following control environment characteristics, identify the one that contributes most to effective
internal control.
A. The audit committee consists of the president, two vice-dents, and the corporate controller.
B. The company does not have a centralized human resource function
C. The company has an effective internal audit staffs that monitors controls on a continuous basis.
D. The company routinely transacts business with related parties.

18. Effective internal control

A. Reduces the need for management to review exception reports on a day-today basis.
B. Eliminates risk and potential loss to the organization.
C. Cannot be circumvented by management.
D. Is unaffected by changing circumstances arid conditions encountered by the organization.

19. Proper segregation of functional responsibilities in an effective system control calls for separation of the
functions of:
A. Authorization, execution and payment
B. Authorization, recording and custody
C. Custody, execution and reporting.
D. Authorization, payment, and recording.

20. In general, material irregularities perpetrated by which of the following are most difficult to detect?
A. Internal auditor
B. Computer operator
C. Cashier
D. Controller

21. An auditor evaluates the existing internal control in order to

A. determine the extent of substantive tests which must be performed
B. determine the extent of control tests which must be performed.
C. ascertain whether irregularities are probable.
D. ascertain whether any employees have incompatible functions.

22. Auditors frequently use flowcharts in connection with which of the following?
A. Preparation of generalized computer audit programs.
B. Review of the client’s internal control procedure
C. Use of statistical sampling in performing on
D. Performance of analytical review procedures for account balances.

23. Which of the following is of least concern to an auditor regarding a client‘s internal controls?
A. Efficiency and effectiveness of operations
B. Controls related to the reliability of financial reporting
C. Controls over classes of transactions
D. Auditors are equally concerned with each issue

24. Which of the following statements regarding the auditor’s documentation of the client‘s internal control
structure is correct?
A. Documentation must include flow chart.
B. Documentation must include procedural write-ups
 C. No documentation is necessary although it is desirable.
D. No one particular form of documentation is necessary and the extent of documentation may vary

25. After obtaining a sufficient understanding of internal control, the auditor assesses
A. The need to apply PSAs
B. detection risk to determine the acceptable level of inherent risk
C. Detection risk and inherent risk to determine the acceptable level control risk.
D. Control risk to determine the acceptable level of detection risk.

26. The understanding of internal control that relates to a financial statement assertion should be used to do all
of the following except:
A. Determine inherent risk for that assertion.
B. identify types of potential misstatements for that assertion.
C. Consider factors that affect the risk of material misstatement for that assertion and assess control risk.
D. Design substantive tests that correspond with the assessment of control risk.

27. For good internal control, which of the following functions should not be the responsibility of the treasurer’s
department?
A. Data processing.
B. Handling of cash
C. Custody of securities.
D. Establishing credit policies.

28. When an organization has strong internal control, management can expect various benefits. The benefit least
likely to occur is
A. a reduced cost of an external audit
B. an elimination of employee fraud
C. the availability of reliable data for decision-making purposes and protection of important documents and
records.
D. an assurance of compliance to applicable laws and regulations

29. Which of the following Internal control components relates to an entity’s process for identifying and
responding to business risks?
A . Control activities
B. Information and communication
C. Risk assessment
D. Monitoring of controls

30. Which of the following components of an entity’s internal control includes development and use of that
communicate prospective roles and training police responsibilities employees?
A. Monitoring of controls
B. Control activities
C. Control environment
D. Information and communication

31. Proper segregation of duties reduces persons to be in positions to both opportunities for persons to be in
positions to both
A. Establish internal control and authorize transactions
B. Perpetrate and conceal errors or fraud.
C. Record cash receipts and cash disbursements.
D. Record transactions and prepare financial statement

32. In obtaining an understanding of internal control relevant to the audit, an auditor the is required to obtain
knowledge about the
A. Effectiveness of controls that have been implemented
B. Consistency with which controls are currently being applied
C. Design of the controls pertaining to internal control components
D. Controls related to each class of transactions and account balance.
33. Which of the following procedures is essential in determining whether necessary control activities are
prescribed and are being followed?
A . Development of questionnaires and checklists
B. Evaluation of the entity’s procedures for risk assessment
C. Documentation of and testing controls.
D. Observing employees and making inquiries

34. Control risk is a measure of the auditor’s expectation that the internal control structure
A. Will prevent material misstatements from occurring.
B. Will detect and correct material misstatements.
C. Will either prevent material misstatements or detect and correct them
D. Will neither prevent material misstatements nor detect and correct them.

35. Which of the following duties would indicate a weakness in the internal control system?
A. The accounting function is under the controller
B. The custodianship of cash is the responsibility of the treasurer’s function.
C. The internal auditor reports to the board of directors.
D. The custodianship of buildings and equipment is the responsibility of the controller’s function.

36. Which of the following is not a part of the control environment?

A. Management philosophy and operating style
B. Organizational structure
C. Information rind communication systems
D. Assignment of authority and responsibility

37. Effective internal control requires organizational independence of different departments. Organizational,
independence would be impaired in which of the following situations?
A. The internal auditors report to the audit committee of the board of directors
B. The controller reports to the vice president of production.
C. The payroll accounting department reports to the chief accountant
D. The cashier reports to the treasurer

38. Which of the following is not an assurance to be provided by an effective internal control system?
A. Management is responsible for knowledge and authorization of transactions.
B. Transactions are recorded to maintain account accountability for assets
C. Access to assets is limited to members of management
D. Transactions are recorded to permit the preparation of reliable financial statements.

39. An auditor’s report on internal control of a publicly held company would ordinarily be of least use to
A. shareholders.
B. directors.
C. officers.
D. regulatory agencies.

40. Which of the following is an appropriate form of documenting the auditor’s understanding of a client’s
internal controls?
A. Narratives
B. Flowcharts
C. Internal control questionnaires
D. Each of the three documentation techniques is appropriate to do
Name: Score:

Course and Year: Date:

INSTRUCTIONS: Write your final answers on the answer sheet provided below. STRICTLY NO
ERASURES.

1. 6. 11. 16. 21.

2. 7. 12. 17. 22.

3. 8. 13. 18. 23.

4. 9. 14. 19. 24.

5. 10. 15. 20. 25.

CJ Company, service provider, presented to you the following income statement in line with the
same Company’s audit of the financial statements:

CJ COMPANY
INCOME STATEMENT
For the year ended December 31, 2021
- Sales: ₱10,350,000
- Cost of Goods Sold: ₱7,050,000
- Gross Profit: ₱3,300,000
- Operating expenses:
- Selling: ₱675,000
- Administrative: ₱1,050,000
- Total Operating Expenses: ₱1,725,000
- Net Income: ₱1,575,000

Additional audit information:

- Accounts receivable decreased ₱540,000 during the year.
- Prepaid expenses increased ₱255,000 during the year.
- Accounts payable to suppliers of merchandise decreased ₱412,500 during the year.
- Accrued expenses payable decreased ₱150,000 during the year.
- Administrative expenses include depreciation expense of ₱90,000.
- Inventories decreased by ₱450,000.

1. How much is output VAT?

A. ₱1,306,800
B. ₱1,257,300
C. ₱1,242,000
D. ₱1,177,200

2. What is the total basis of input VAT on supplies and operating expenses (purchase of
services) during the year?
A. ₱9,052,500
B. ₱8,640,000
C. ₱7,012,500
D. None of the above

3. What is the input tax during the year?

A. ₱1,086,300
B. ₱1,036,800
C. ₱841,500
D. None of the above

4. Assuming the taxpayer is a seller of goods, how much is the output tax for the year?
A. ₱1,306,800
B. ₱1,257,300
C. ₱1,242,000
D. None of the above

A domestic common carrier with Certificate of Public Convenience (CPC) has the following data
for the year 2018:
- Gross receipts: ₱3,000,000
- Cost of services: ₱1,000,000
- Operating expenses: ₱500,000

5. Assuming the domestic common carrier is by land, how much is the common carrier’s tax?
A. ₱90,000
B. ₱60,000
C. ₱45,000
D. None of the above

6. Assuming the domestic common carrier is by air, VAT-registered, how much is the VAT?
A. ₱360,000
B. ₱240,000
C. Not subject to VAT
D. None of the above

7. Assuming the entity is allowed to transport passengers but does not have a CPC, how much
is the percentage tax, if any?
A. ₱90,000
B. ₱60,000
C. ₱45,000
D. None of the above

Matcha, a non-VAT registered lessor of residential and commercial units, had the following data
for the first and second quarters of 2018:

1st Quarter 2nd Quarter

Gross receipts

With monthly rental of ₱2,500,000 ₱2,300,000

₱13,000 per unit

With monthly rental of 1,000,000 1,200,000

₱18,000 per unit

Gross receipts from lease of 2,300,000 2,400,000

commercial units

Input tax paid from VAT 150,000 120,000

suppliers

8. How much is the business tax due for the 1st quarter 2018 of Mr. Matcha?
A. ₱99,000
B. ₱174,000
C. ₱246,000
D. ₱396,000

9. How much is the business tax due for the 2nd quarter 2018 of Mr. Matcha?
A. ₱108,000
B. ₱312,000
C. ₱432,000
D. ₱708,000

10. How much is the business tax due for the 2nd quarter 2018 of Mr. Matcha. Assuming he
registered as VAT taxpayer at the start of the 2nd quarter 2018?
A. ₱312,000
B. ₱432,000
C. ₱588,000
D. ₱708,000
11. Assuming Mr. Matcha is VAT registered taxpayer instead of non-VAT registered taxpayer,
how much is the business tax due of Mr. Matcha for the first quarter of 2018?
A. ₱246,000
B. ₱396,000
C. ₱546,000
D. ₱696,000

Mochi is a VAT-Registered taxpayer. The following data from the books of accounts were
transactions for each of the months of January, February and March (first quarter) of 2018:

March February March

Credits to sales P440,000 P550,000 P770,000

account

Debits to purchases
account on local
purchases of goods
from:

VAT-registered 110,000 660,000 330,000

persons

Non-VAT registered 20,000 30,000 15,000

persons

Importation of goods, 50,000

landed cost

12. The VAT payable at the end of January is

A. P33,000
B. P39,600
C. P30,000
D. P52,800

13. The VAT payable (refundable) at the end of February is

A. P(19,200)
B. P19,800
C. P0
D. P66,000

14. The output taxes on the return for the period ending March is
A. P160,000
B. P176,000
C. P211,200
D. P92,400

15. The VAT payable at the end of March is

A. P13,800
B. P33,600
C. P13,200
D. P39,600

After recognizing the VAT payable for the month of December 2018, the books of accounts of
Kohi, a merchandising company, showed a debit balance in the input taxes account of P12,000.
Sales and purchases at total invoice prices/costs for January 2019 were:

Sales P896,000

Sales returns and allowances 56,000

Sales discount 22,400

Purchases of:

Goods for sale, from VAT-registered persons 224,000

Goods for sale, from non-Vat registered 56,000

persons

Services, from VAT-registered persons 21,280

Equipment (life of 10 years) from VAT- 112,000

registered person

Importation of goods for sale:

Invoice cost, country of origin 20,000

Freight 500

Insurance 200

Customs duty 600

 Excise tax 100

Other expenses prior to removal from 300

customs custody

Other expenses after removal from customs 250

custody

Operating expenses 30,000

16. The VAT on Importation is

A. P2,170
B. P2,604
C. P2,634
D. P6,234

17. The VAT payable for January 2019 is

A. P34,716
B. P41,150
C. P40,716
D. P46,716

ESTO Corporation, a VAT registered company engaged

in the lease of residential properties. During the first quarter of 2020, the following
information were made available (all amounts are exclusive of VAT):

• Rental income with monthly rental of P18,000 per unit – P800,000

• Rental income with monthly rental of P15,500 per unit – P600,000
• Rental income with monthly rental of P10,000 per unit – P400,000
• Receivable from tenants as of December 31, 2019, (60% is VAT Exempt) – P200,000
• Receivable from tenants as of March 31, 2020 (40% is VAT Exempt) – P300,000
• Deferred rent income as of December 31, 2019 (60% is VAT Exempt) – P200,000
• Deferred rent income as of March 31, 2020 (40% is VAT Exempt) – P250,000
• Input tax credit on purchases of goods and services for the first quarter of 2020
– P80,000

18. How much is the output tax due for the first quarter of 2020?
A. P92,400
B. P164,400
C. P171,600
D. None
19. How much is the creditable input tax credit for the first quarter of 2020?
A. P35,200
B. P61,838
C. P62,629
D. P80,000

20. Assuming on April 5, 2020, EX Corporation sold a residential house and lot for
P3,000,000 (VAT Exclusive). How much is the output tax due on its sale of real
property, assuming the zonal value of the property is P3,248,000?
A. P348,000
B. P360,000
C. P389,760
D. None

21. Star Telecom Inc. has the following collections for the month of April 2023:

Overseas call originating abroad P1,120,000

Overseas call originating in the Philippines 880,000

Local calls 2,240,000

How much is the overseas communications tax to be remitted by Star for the month?

a. P220,000

c. P200,000

b. P88,000

d. P80,000

22. Based on the preceding number, how much is the output tax?

a. P240,000

c. P360,000

b. P454,286

d. P268,800
A franchisee, had the following data on sales and receivables in the 1st quarter of 2023:

Quarter ended, Sales AR, beg. AR, end

March 31, 2023

Covered by the P4,000,000 P600,000 P800,000

franchise

Not covered by the 1,200,000 160,000

franchise

23. If the franchisee is generating and selling electricity, the correct amount of business tax is:

a. P200,800

b. P456,000

c. P580,800

d. P624,000

24. if the franchisee is a gas and water utility, the correct amount of business tax is:

a. P200,800

c. P580,800

b. P456,000

d. P624,000

25. if the franchisee is a radio television broadcasting company, the correct amount of business
tax is:

a. P200,800

b. P456,000

c. P580,800

d. P624,000
Name: ____________________________________________________________Score: __________
Course & Year: _____________________________________________________Date:___________

Finals - Drill
AUDIT RISK

INSTRUCTIONS: Write your final answers in the answer sheet provided below. NO ERASURES.
1. 6. 11. 16. 21.
2. 7. 12. 17. 22.
3. 8. 13. 18. 23.
4. 9. 14. 19. 24.
5. 10. 15. 20. 25.

Patrick, resident alien, made the following donations for the year 2024:
April 15:
• To Hayley (legally adopted child): Car worth P700,000 in the Philippines
• To Rebekah (daughter): Car in Canada, worth P300,000. The donor's tax paid in Canada was $200
($1 = P45)
July 20:
• To Sophie (niece in Manila): P200,000 worth of personal property.
• To Davina: Car in Manila, worth P400,000 but mortgaged for P200,000, ½ of which was assumed by the donee.
1. The gift tax payable on April 15 should be:
a. 45,600
b. 30,000
c. 44,000
d. 36,000
2. The gift tax payable on July 20 should be:
a. 40,000
b. 30,000
c. 84,000
d. 80,000

3. Nena made the following gifts to his relatives:

Phils USA UK Italy
Gross Profit 750,000 500,000 250,000 500,000
Deductions 250,000 200,000 150,000 150,000
Tax Paid - 25,000 12,000 10,000
The donor's tax payable after tax credit is:
a. 26,000
b. 30,800
c. 33,520
d. 60,000

Mr. and Mrs. Pinagpala, made the following donations during 2024:
Jan. 25:
To their legitimate son, Oliver, on account of marriage on January 20, 2024, a car worth P400,000 with P200,000
unpaid mortgage (½ of the mortgage was assumed by the donee).
May 31:
To John, brother of Mr. Pinagpala, his capital property worth P200,000 with a condition that the donee will pay
the donor's tax thereon.
July 15:
To Felicity (daughter of Mrs. Pinagpala by former marriage), Mrs. Pinagpala's paraphernal property worth
P100,000.
Aug. 20
Conjugal car of the couple worth 400,000, with 200,000 unpaid mortgage, ½ assumed by Felicity and P500,000
worth of land to their four sons on account of their graduation 20% of which was owned by their closest friend
Roy, who agreed to donate his share through a public document.
4. The gift tax payable of Mr. Pinagpala as of May 31 should be:
a. 8,000
b. 7,000
c. 7,200
d. 6,000
5. The gift tax payable of Mrs. Pinagpala as of July 15 should be:
a. 1,000
b. 2,600
c. 15,000
d. 0
6. The gift taxes payable of Mr. and Mrs. Pinagpala on August 20 should be:
a. P27,000 and P21,000
b. P21,000 and P27,000
c. P21,000 and P21,000
d. P6,000 and P0
7. The gift tax payable of Roy on June 20 should be:
a. 30,000
b. 6,000
c. 45,000
d. 0

Generous as he truly is, Ms. Mimi made the following donations to various persons and institutions during 2020:
- On February 13, he donated to 20,000 square meter parcel of land in Cavite to his niece subject to the
condition that she will graduate. The land was originally acquired at a price of P3,000,000, has a zonal value as
of this date of P3,500,000, and an assessed value of P3,550,000.
- On April 8, Newt's niece graduates from college. The parcel of land in Cavite has increased both its zonal and
assessed value by P200,00.
- On August 22, Newt gave 30,000 unlisted preference shares of Nimbus Corporation to his sister. Each share has
a par value of P30 and a market value of P32.

Ms. Mimi is a resident and a citizen of the Philippines. All of the above donations have complied with the
requirements for validity.

8. What is the status of the donation of the diamond ring on February 14?
a. The donation is void. Donations to spouses or other persons with whom the donor is in a romantic
relationship is generally void except if on occasion of family rejoicing.
b. The donation is void. A diamond ring is not a moderate gift.
c. The donation is void. Donations between persons guilty of adultery and concubinage is void.
d. The donation is valid.
9. How much is the donor's tax payable for the transaction of February 13?
a. 0
b. 165,000
c. 195,000
d. 198,000
10. How much is the donor's tax payable for the transaction on April 8?
a. 0
b. 210,000
c. 213,000
d. 225,000
11. How much is the donor's tax payable for the transaction on August 22?
 a. 0
b. 3,000
c. 54,000
d. 402,000

Dua Lipa is the owner of three parcels of land.

- Dua Lipa rented Land#1 to Hailee. Monthly rental payments by Hailee amount to P20,000. The rental contract is set
to last for two years. Land#1 has a value of P2,300,000. The land is located in Zamboanga. Dua Lipa gave
- Land#2 to Selena through a revocable deed of donation on March 13, 2018. Dua Lipa revoked the donation on
September 2, 2018. Land#2 has a value of P3,400,000 on March 13 and P3,920,000 on
- September 2. The land is located in Zambales. Dua Lipa gave Land#3 to Carly in exchange of cash worth P500,000.
The land's value is P2,440,000. The transaction was documented in a notarized deed. The land is located in Japan.
12. If Dua is a resident citizen, how much is the donor's tax due?
a. 101,400
b. 131,400
c. 305,400
d. 336,600
13. If Dua is a non-resident alien, how much is the donor's tax due?
a. 0
b. 101,400
c. 131,400
d. 305,400
14. Statement 1: Regardless of the relationship to the donee, donations shall be subject to 6% donor's tax rate in
excess of P250,000 exempt gifts.
Statement 2: Donations made by or in favor of juridical persons shall be subject to 6% donor's tax rate in excess
of P250,000 exempt gifts.
a. Only the first statement is correct
b. Only the second statement is correct.
c. Both statements are correct.
d. Both statements are incorrect.
15. Lisa sold a real property used in business for P600,000 to his brother-in-law. The assessed value and zonal value
of the land were P750,000 and P1,000,000 respectively.
The sale is subject to:
a. Subject to donor's tax only of P9,000.
b. Subject to capital gains tax only of P60,000
c. Subject to donor's tax of P9,000 and capital gains tax of P60,000.
d. Subject to donor's tax of P9,000 or capital gains tax of P60,000 at the option of Jose.
16. Pedro gave gifts to the following persons on June 12, 2024, his 40th birthday
- A second-hand car worth P350,000 to Kaskasero, his trusted driver The donation was made orally Since then, the
driver had taken possession of the property.
- To his Mayordoma, Ms. Mercy, a lot with a bungalow thereon. The value of the property is P1,200,000. The
donation provides that it may be revoked anytime at the pleasure of Pedro.
- His flower shop worth P700,000 to Hardinero, his gardener The donation is provided in his will.
- Cash of P100,000 each to his three long-time friends.
How much is the donor's tax due
a. 720,000
b. 45,000
c. 100,000
d. 3,000
17. In 2024, Ronald gave a property with a fair market value of P2,000,000 (with unpaid mortgage of P200,000 to be
paid by him) to his son Daniel and Daniel's bride, Emily, on account of their marriage 15 months ago. The allowable
deduction is:
a. 10,000
b. 20,000
c. 40,000
 d. 0
18. The donor's tax payable should be:
a. 300,000
b. 344,000
c. 105,000
d. 120,000
19. Ani donated P500,000 to her friend Lisa who was getting married. Ani gave no other gift during the calendar year
What is the donor's tax implication on Ani's donation?
a. The P10,000 portion of the donation is exempt as dowry since it was given in consideration of marriage.
b. Ani donated to a stranger, hence, she shall pay a 30% donor's tax on her donation in excess of P250,000.
c. Ani shall pay a 6% donor's tax on her donation in excess of P250,000.
d. The donation is exempt.
20. Rita sold his car to Rose for 200,000. Rita's car costs 500,000, and had a fair market value of 400,000 at the time
of sale. What is the tax consequence of the sale?
a. There is a taxable gift of 300,000
b. There is it taxable gift of 200,000
c. The transfer is for insufficient consideration, hence, not subject to donors tax
d. The transfer involved a personal property, hence, not subject to donors tax
21. The spouses Ana and Pedro wanted to donate a parcel of land to their son Lorna who is getting married in
December, 2016. The parcel of land has a zonal valuation of P420,000.00. What is the most efficient mode of
donating the property?
a. The spouses should first donate in 2016 a portion of the property valued at P20,000, then spread the
P400,000 equally for 2017, 2018, 2019 and 2020.
b. Spread the donation over a period of 5 years by the spouses donating P100,000 each year from 2016 to
2020.
c. The spouses should each donate a P110,000 portion of the value of the property in 2016 then each should
donate P100,000 in 2017.
d. The spouses should each donate a P100,000 portion of the value of the property in 2016, and another
P100,000 each in 2017 Then, in 2018, Pedro should donate the remaining P20,000.
22. Which transfer for insufficient consideration is exempted from donor's tax?
a. A sale, exchange, or other transfer of property made outside the ordinary course of business.
b. A sale, exchange or other transfer of property which is a bona fide, at arm's length, and free from any
donative intent.
c. A sale, exchange or other transfer of property the consideration of which is the generosity or liberality of
the transferor.
d. A sale, exchange or other transfer of property which is relatively simulated in order to escape the payment
of income tax.
23. What is the threshold for annually exempted donation by an individual donor?
a. Not exceeding 500,000
b. Not exceeding 250,000
c. Not exceeding 1,000,000
d. Not exceeding 1,500,000
24. Which property donated by a resident alien the subject to donors tax without any qualification?
a. Intangible assets located outside Philippine territory
b. Intangible assets located inside Philippine territory
c. Tangible assets located outside Philippine territory
d. All of the above
25. What is the donors tax rate for taxable donation made by an individual to his or her relative?
a. 2% - 15%
b. 30%
c. 5%
d. 6%
 St Ferdinand College Inc.
COLLEGE OF ACCOUNTANCY
City Of Ilagan Isabela

AUDIT REVIEW

Name: _________________________________________________ Score:____________________

Course&Year:____________________________________________ Date: ____________________

DRILL – AUDIT OPINION

Write your answers on the box provided. USE CAPITAL LETTERS. Strictly no ALTERATIONS AND
ERASURES.

1. 11. 21. 31.

2. 12. 22. 32.
3. 13. 23. 33.
4. 14. 24. 34.
5. 15. 25. 35.
6. 16. 26. 36.
7. 17. 27. 37.
8. 18. 28. 38.
9. 19. 29. 39.
10. 20. 30. 40.

1. The auditor‘s responsibility in an audit engagement is limited to:

a. expression of an opinion on the financial statements
b. expression of an opinion on the financial statements and adequacy of summary of accounting
policies and other notes
c. opinion issued and the fairness of presentation of the financial statements
d. expression of opinion and an inclusion of supplementary information if necessary
2. Under certain circumstances, the CPA may wish to emphasize specific matters regarding the financial
statements even though he or she intends to express an unqualified opinion. Normally, such an
explanatory information should be included in
a. the introductory paragraph
b. a separate paragraph following the opinion paragraph in the report
c. the opinion paragraph
d. A separate paragraph preceding the opinion paragraph
3. Salmon Company's financial statements adequately disclose uncertainties that concern future events,
the outcome of which cannot reasonably be estimated. The auditor's report should include a(an)
a. unqualified opinion
b. except for qualified opinion
c. "subject to" qualified opinion
d. adverse opinion
4. In extreme cases such as situations involving multiple uncertainties that are significant to the financial
statements, the auditor
 a. may consider to express a disclaimer of opinion
b. may qualify his opinion instead of issuing an unqualified opinion with emphasis of matter
paragraph
c. may issue an adverse opinion because of their significance
d. may issue a "subject to" opinion because the situations related to uncertainties
5. A client company has issues that cause substantial doubt regarding the entity's ability to continue as a
going concern. If this is the only major audit issue, which type of opinion will the auditor usually
refrain from issuing?
a. Adverse
b. Unqualified with explanatory language
c. Clean opinion
d. Disclaimer of opinion
6. The auditor may continue to express unqualified opinion though there are modifications made in the
audit report. Which of the following situations, would the auditor likely modify his opinion?
a. The existence of multiple uncertainties that are adequately described in the notes to financial
statements
b. The prior year's financial statements were audited by other CPAs
c. An important subsidiary whose financial statements were included in the consolidated
financial statements were audited by other CPAs
d. A substantial doubt about the client's ability to continue as a going concern that is adequately
disclosed in the financial statements.
7. In which of the following situations would qualified opinion be inappropriate?
a. Financial statements are materially misstated
b. A doubt that is more than substantial about the ability of the company to continue as a going
concern
c. A significant scope limitation
d. The management insisted of not attaching the statement of cash flows
8. Which of the following is not a reason to issue a modified audit report with opinion other than
unqualified opinion?
a. The scope of the auditor's work is restricted by the client
b. The amount of inventories at cost as presented in the balance sheet significantly exceeded
their market values
c. Certain significant matter is omitted from either the financial statements or notes to financial
statement
d. An adequately disclosed significant uncertainty, the resolution of which is dependent upon
future events and which may affect the financial statements.
9. Which of the following circumstances may not result- to a disclaimer of opinion?
a. A significant scope limitation in auditing the existence of inventories. The inventory amount
comprises 75 percent of the total assets of the client
b. The auditor believes that there are multiple, uncertainties that are significant to the financial
statements
c. The accounts receivable of the client comprises 80 percent of the total assets. The auditor was
instructed by the client not to confirm account balances. The auditor, however, was satisfied by
the results of alternative audit procedures
d. The auditor's wife owns very a few number of common shares of the client.
10. Whenever an auditor issues a qualified report, he or she
a. must use the term "subject to" in the opinion paragraph
b. may use either the terms "subject to" or " except for" in the opinion paragraph, depending on the
nature of the qualification
c. must use the term "except for" in the opinion paragraph
d. must not use the terms "subject to" or "except for" in the opinion paragraph
11. Under which of the following sets of circumstances might an auditor disclaim an opinion?
a. The financial statements contain a departure from PFRS, the effect of which is material
b. The principal auditor decides to make reference to the report of another auditor who audited a
subsidiary
c. There has been a material change between periods in the method of the application of accounting
principles
d. There were significant limitations on the scope of the audit.
12. If an auditor is engaged to audit a client's financial statements after the annual physical inventory
count was made and the accounting records are not sufficiently reliable to enable the auditor to
become satisfied as to the year-end inventory balances, the opinion to be expressed is
a. either an "except for" qualified opinion or an adverse opinion
b. either a disclaimer or opinion or an "except for" qualified opinion
c. either an adverse opinion or disclaimer of opinion
d. an unqualified opinion.
13. An adverse opinion is issued when the auditor believes
a. some parts of the financial statements are materially misstated or misleading
b. the financial statements investigation be found to be misleading or misstated, if an adequate
investigation is performed
c. the overall financial statements are so materially misstated or misleading as a whole that they do
not present fairly the financial position or results of operations, changes in cash and stockholders'
equity in conformity with PFRS
d. the audit firm is not independent
14. If the scope of the auditors procedures in conducting an audit is significantly restricted by the client
management, the audit opinion will most likely be a(n):
a. Adverse opinion
b. Qualified opinion
c. Unqualified with explanatory paragraph
d. Disclaimer of opinion
15. The auditor would most likely disclaim his opinion because of
a. the client's failure to present supplementary information required by the FRSC
b. inadequate disclosure of material information
c. the qualification of an opinion by the other auditor of a subsidiary where there is a division of
responsibility
d. a client-imposed scope limitation
16. An entity changed from the straight-line method to the declining balance method of depreciation for
all newly acquired assets. This change has no material effect on the current year’s financial
statements but is reasonably certain to have a substantial effect in later years. If the changes is
disclosed in the notes to the financial statements, the auditor should issue a report with a (an)
a. “Except for” qualified opinion
b. Unqualified opinion
c. Explanatory paragraph
d. Consistency modification
17. When the audited financial statements of the prior year are presented together with those of the
current year, the continuing auditor's report should cover
a. Both years
b. Only the current year
c. Only the current year, but the prior year's report should be presented
d. Only the current year, but the prior year's report should be referred to
18. . An auditor includes a separate paragraph in an otherwise unqualified report to emphasize that the
entity being reported upon had significant transactions with related parties. The inclusion of this
separate paragraph
 a. Violates generally accepted auditing standards if this information is already disclosed in footnotes
to the financial statements
b. Necessitates a revision of the opinion paragraph to include the phrase "with the foregoing
explanation"
c. Is appropriate and would not negate the unqualified opinion
d. Is considered an "except for" qualification of the report
19. Client A reports property, plant, and equipment at appraisal values and records depreciation based on
the appraised amounts. Also, the company does not defer income taxes for temporary differences
arising from using the installment method of recognizing gross profit for tax purposes. The company
uses the accrual method for financial reporting purposes. Under these circumstances, the auditor will
probably issue a(n)
a. Audit opinion qualified for a departure from GAAP
b. Adverse audit opinion
c. Disclaimer of opinion
d. Unqualified audit opinion with an explanatory paragraph describing the client's unique
accounting practices
20. X, an independent auditor, was engaged to perform an audit of the financial statements of a
corporation one month after its fiscal year had ended. Although the inventory count was not observed
by X, and accounts receivable were not confirmed by direct communication with customers, X was
able to gain satisfaction by applying alternative auditing procedures. X’s audit report will probably
contain
a. A standard unqualified opinion
b. An unqualified opinion and an explanatory paragraph
c. Either a qualified opinion or a disclaimer of opinion
d. An "except for" qualification
21. The following statements relate to the auditor’s reporting responsibilities regarding comparative
information. Which is incorrect?
I. For corresponding figures, the auditor’s report only refers to the financial statements of the
current period
II. For comparative financial statements, the auditor’s report refers to each period that financial
statements are presented
a. I only
b. II only
c. Both I and II
d. Neither I nor II
22. Which of the following best describes the auditor’s responsibility when reporting on comparatives?
a. For corresponding figures, the auditor’s opinion on the financial statements refers to the current
period only
b. For all comparatives, the auditor’s opinion refers to each period for which the financial
statements are presented
c. For all comparatives, the auditor’s opinion refers to the current period only
d. For comparative financial statements, the auditor’s opinion on the financial statements refers to
the current period only
23. A framework of presentation where amounts and other disclosures for the prior period are included
as an integral part of the current period financial statements, and are intended to be read only in
relation to the amounts and other disclosures relating to the current period
a. Current period figures
b. Comparative financial statements
c. Comparatives
d. Corresponding figures
24. When audited financial statements are presented in a client’s document containing other information,
the auditor should
a. Perform inquiry and analytical procedures to ascertain whether the other information is
reasonable
b. Add an explanatory paragraph to the auditor’s report without changing the opinion on the
financial statements
c. Perform the appropriate substantive auditing procedures to corroborate the other information
d. Read the other information to determine that it is consistent with the audited financial statements
25. Before the date of the auditor’s report, the auditor found a material inconsistency between the other
information and the information presented in the financial statements. If revision of the financial
statements is necessary and management refuses to make the revision, the auditor shall
a. Modify the opinion on the financial statements
b. Include Other Matter paragraph in the unmodified report to describe the material inconsistency
c. Disclaim an opinion on the financial statements
d. Disclaim an opinion on the other information
26. When the auditor concludes that the use of the going concern assumption is appropriate in the
circumstances, but material uncertainty exists, the auditor shall
a. Issue either qualified or adverse opinion
b. Consider the adequacy of disclosure in the notes to financial statements
c. Report to the audit committee the need to adjust management estimates
d. Reissue the prior year’s audit report and add an emphasis of a matter paragraph
27. An auditor who concludes that an uncertainty is not adequately disclosed in the financial statements
would most likely issue a
a. Disclaimer of opinion
b. Special report
c. A report with emphasis of matter paragraph
d. Qualified opinion
28. In extreme cases, such as situations involving multiple uncertainties that are significant to the
financial statements, the auditor may consider it appropriate to express a
a. Qualified opinion
b. Disclaimer of opinion
c. A report with emphasis of matter paragraph
d. Adverse opinion
29. When an auditor of financial statements has substantial doubt about an entity's ability to continue as
a going concern because of the probable discontinuance of operations, the auditor most likely would
express a qualified opinion if
a. The effects of the adverse financial conditions likely will cause a bankruptcy filing
b. Information about the entity's ability to continue as a going concern is not disclosed
c. Management has no plans to reduce or delay future expenditures
d. Negative trends and recurring operating losses appear to be irreversible
30. An independent auditor has concluded that a substantial doubt remains about a client's ability to
continue as a going concern, but the client's financial statements have properly disclosed all of its
solvency problems. The auditor would probably issue a(an)
a. Unqualified opinion with emphasis of paragraph
b. Standard unqualified opinion
c. "Except for" qualified opinion
d. Adverse opinion
31. An auditor concludes that a client’s illegal act, which has a material effect on the financial statements,
has not been properly accounted for or disclosed. Depending on the materiality of the effect on the
financial statements, the auditor should express either a(n)
a. Adverse opinion or a disclaimer of opinion.
 b. Qualified opinion or an adverse opinion.
c. Disclaimer of opinion or an unmodified opinion with a separate emphasis-of-matter paragraph.
d. Unmodified opinion with a separate emphasis-of matter paragraph or a qualified opinion.
32. Which of the following phrases would an auditor most likely include in the auditor’s report when
expressing a qualified opinion because of inadequate disclosure?
a. Subject to the departure from US generally accepted accounting principles, as described above.
b. With the foregoing explanation of these omitted dis closures.
c. Except for the omission of the information discussed in the preceding paragraph.
d. Does not present fairly in all material respects.
33. In which of the following circumstances would an auditor be most likely to express an adverse
opinion?
a. The chief executive officer refuses the auditor ac cess to minutes of board of directors’ meetings.
b. Tests of controls show that the entity’s internal control is so poor that it cannot be relied upon.
c. The financial statements are not in conformity with a t FASB requirement regarding the
capitalization of leases
d. Information comes to the auditor’s attention that raises substantial doubt about the entity’s ability
to continue as a going concern
34. In which of the following situations would an auditor ordinarily choose between expressing an
“except for” qualified opinion or an adverse opinion?
a. The auditor did not observe the entity’s physical inventory and is unable to become satisfied as to
its balance by other auditing procedures
b. The financial statements fail to disclose information that is required by generally accepted
accounting principles
c. The auditor is asked to report only on the entity’s balance sheet and not on the other basic
financial statements
d. Events disclosed in the financial statements cause the auditor to have substantial doubt about the
entity’s ability to continue as a going concern
35. In which of the following situations would an auditor ordinarily choose between expressing a
qualified opinion or an adverse opinion?
a. The auditor did not observe the entity’s physical inventory and is unable to become satisfied
about its balance by other auditing procedures
b. Conditions that cause the auditor to have substantial doubt about the entity’s ability to continue
as a going concern are inadequately disclosed
c. There has been a change in accounting principles that has a material effect on the comparability
of the entity’s financial statements
d. The auditor is unable to apply necessary procedures concerning an investor’s share of an
investee’s earnings recognized on the equity method
36. An auditor decides to issue a qualified opinion on an entity’s financial statements because a major
inadequacy in its computerized accounting records prevents the auditor from applying necessary
procedures. The opinion paragraph of the auditor’s report should state that the qualification pertains
to
a. A client-imposed scope limitation
b. A departure from generally accepted auditing standards
c. The possible effects on the financial statements
d. Inadequate disclosure of necessary information
37. A scope limitation sufficient to preclude an unmodified opinion always will result when management
a. Prevents the auditor from reviewing the working papers of the predecessor auditor
b. Engages the auditor after the year-end physical inventory is completed
c. Requests that certain material accounts receivable not be confirmed
d. Refuses to acknowledge its responsibility for the fair presentation of the financial statements in
conformity with GAAP
38. An uncertainty facing the firm relating to the possible future results of litigation filed against client is
most likely to result in which of the following types of audit report?
a. Adverse with a basis for adverse opinion paragraph
b. Qualified due to a scope limitation
c. Qualified with a basis for qualification paragraph
d. Unqualified with emphasis-of-matter paragraph
39. An auditor may not issue a qualified opinion when
a. An accounting principle at variance with GAAP is used
b. The auditor lacks independence with respect to the audited entity
c. A scope limitation prevents the auditor from completing an important audit procedure
d. The auditor’s report refers to the work of a specialist
40. When an auditor expresses an adverse opinion, the opinion paragraph should include
a. The principal effects of the departure from generally accepted accounting principles
b. A direct reference to a separate paragraph disclosing the basis for the opinion
c. The substantive reasons for the financial statements being misleading
d. A description of the uncertainty or scope limitation that prevents an unmodified opinion
Name: Score:
Course & Year: Date:

1 6 11 16 21 26 31
2 7 12 17 22 27 32
3 8 13 18 23 28 33
4 9 14 19 24 29 34
5 10 15 20 25 30 35

1. This involves the application of the procedures to less than 100% of the items within an
account balance or class of transactions. This enables the auditor to obtain and evaluate audit
evidence about some characteristics of the selected items in order to form an opinion about
the characteristics of all the items supporting an account balance or transaction class
a. Audit techniques
b. Selective testing
c. Audit sampling
d. Specific identification

2. PSA 530 identifies two general approaches to audit sampling. They are
a. Random and non-random
b. Statistical and non-statistical
c. Precision and reliability
d. Risk and non-risk

3. An advantage of statistical over non-statistical sampling is that statistical sampling

a. Enables auditors to objectively measure the reliability of their sample results
b. Permits use of a smaller sample size than would be necessary with non-statistical sampling
c. Is compatible with a wider variety of sample selection methods than is non-statistical sampling
d. Allows auditors to inject their subjective judgment in determining sample size and selection
process in order to audit items of greatest value and highest risk

4. Of the following statements, which one best differentiates statistical sampling from
nonstatistical sampling?
a. Statistical sampling is a mathematical approach to inference, whereas nonstatistical sampling
is a more subjective approach
b. Nonstatistical sampling has greater applicability to large populations than does statistical
sampling
c. Nonstatistical sampling is more subjective but produces greater consistency in the application
of audit judgment
d. Nonstatistical sampling has greater applicability to populations that lend themselves to
random selection

5. There are many kinds of statistical estimates that an auditor may find useful, but basically
every statistical estimate in auditing is of either a quantity or of an error rate. The statistical
terms that roughly correspond to "quantities" and "occurrence rate", respectively, are
a. Attributes and variables
b. Variables and attributes
c. Constants and attributes
d. Constants and variables
6. Which of the following sampling methods is most useful to auditors when testing for internal
control effectiveness?
a. Stratified random sampling
b. Attribute sampling
c. Variables sampling
d. Unrestricted random sampling with replacement

7. Which of the following sampling plans would be designed to estimate a numerical

measurement of a population such as peso value during substantive testing phase?
a. Numerical sampling
b. Sampling for attributes
c. Discovery sampling
d. Variables sampling

8. A sample in which every possible combination of items in the population has a chance of
constituting the sample is a
a. Representative sample
b. Random sample
c. Statistical sample
d. Judgment sample

9. The process which requires the calculation of an interval and then selects the items based on
the size of the interval is
a. Statistical sampling
b. Systematic selection
c. Random selection
d. Computerized selection

10. If certain forms are not consecutively numbered

a. Selection of a random sample probably is not possible
b. Systematic sampling may be appropriate
c. Stratified sampling should be used
d. Random number tables cannot be used

11. A method of sampling in which all the items in the population are divided into two or more
sub-population is
a. Variable sampling
b. Stratified sampling
c. Attribute sampling
d. Divisible sampling

12. What is the primary objective of using stratification as a sampling method in auditing?
a. To increase the confidence level at which a decision will be reached from the results of the
sample selected
b. To determine the occurrence rate for a given characteristic in the population being studied
c. To decrease the effect of variance in the total population
d. To determine the precision range of the sample selected
13. In which sampling method is the probability of selection of an item proportional to the size or
the value of the item?
a. Discovery sampling
b. Value weighted sampling
c. Ration estimation
d. Stratified sampling

14. In comparison with classical variables sampling, which of the following is an advantage of value
weighted sampling?
a. Value weighted sampling automatically results in a stratified sample
b. Value weighted sampling results in a smaller sample size if many differences are expected
between audited and recorded amounts
c. Value weighted sampling is particularly appropriate when understatement errors are expected
d. Value weighted sampling is less likely to overstate the allowance for sampling risk when errors
are found in the sample

15. If the auditor is concerned that a population may contain exceptions, the determination of a
sample size sufficient to include at least one such exception is a characteristic of
a. Discovery sampling
b. Variables sampling
c. Random sampling
d. PPS Sampling

16. An auditor samples cash disbursement records for significant errors of P500 or more. Upon
finding one such error, these records are scheduled for a complete review. This conclusion is
most likely based on a
a. Cluster sample
b. Discovery sample
c. Systematic sample
d. Stratified sample

17. When the auditor goes through a population and selects items for the sample without regard
to their size, source or other distinguishing characteristics, it is called
a. Block selection
b. Systematic selection
c. Haphazard selection
d. Random selection

18. Which of the following statistical selection techniques is least desirable for use by an auditor?
a. Systematic selection
b. Stratified selection
c. Block selection
d. Sequential selection

19. The possibility that the auditor’s conclusion based on a sample may be different from the
conclusion reached if the entire population were subjected to the same procedure is called
a. Audit risk
b. Non-sampling risk
c. Sampling risk
d. Detection risk
20. Which of the following best illustrates the concept of sampling risk?
a. A randomly chosen sample may not be representative of the population as a whole on the
characteristics of interest
b. An auditor may select audit procedure that are not appropriate to achieve the specific
objective
c. An auditor may fail to recognize errors in the documents examined for chosen sample
d. The documents related to the chosen sample may not be available for inspection

21. Which of the following is not among the characteristics of the procedures performed in
completing the audit?
a. They are optional since they have only an indirect impact on the opinion to be expressed
b. They involve many subjective judgments by the auditor
c. They are performed after the balance sheet date
d. They are usually performed by audit managers or other senior members of the audit team
who have extensive audit experience with the client

22. A Type I subsequent event involves subsequent information about a condition that existed at
the balance sheet date. Subsequent knowledge of which of the following would cause the
entity to adjust its December 31 financial statements?
a. Sale of an issue of new stock for P500,000 on January 30
b. Settlement of a damage lawsuit for a customer’s inquiry sustained February 15 for P100,000
c. Settlement of litigation in February for P100,000 that had been estimated at P120,000 in the
December 31 financial statements
d. Storm damage of P1 million to the entity’s buildings on March 1

23. A major customer of an audit client suffers a fire just prior to completion of year-end field
work. The auditor believes that his event could have a significant direct effect on the financial
statements. The auditor should
a. Advise management to disclose the events in notes to the financial statements
b. Disclose the event in the auditor’s report
c. Withhold submission of the auditor’s report until the extent of the direct effect on the financial
statements is known
d. Advise management to adjust the financial statements

24. Which of the following subsequent events will be least likely to results in an adjustment to the
financial statements?
a. Culmination of events affecting the realization of accounts receivable owned as of the balance
sheet date
b. Culmination of events affecting the realization of inventories owned as of the balance sheet
date
c. Material changes in the settlement of liability which were estimated as of the balance sheet
date
d. Material changes in the quoted market prices of listed investment securities since the balance
sheet date

25. Which of the following is not a procedure normally performed while completing the audit?
a. Obtain a lawyer's letter
b. Obtain a representations letter
c. Perform an overall review using analytical procedures
d. Obtain confirmation of capital stockholdings from shareholders
26. Which of the following auditing procedures is ordinarily performed last?
a. Reading of the minutes of the directors' meetings
b. Confirming accounts payable
c. Obtaining a management representation letter
d. Testing of the purchasing function

27. Analytical procedures are required as a part of the

a. Detailed tests of balances
b. Internal control assessment
c. Overall review at the conclusion of the audit
d. Substantive testing

28. One reason why the independent auditors perform analytical procedures on the client's
operations is to identify
a. Weaknesses of a material nature in internal control
b. Non-compliance with prescribed control procedures
c. Improper separation of accounting and other financial duties
d. Unusual transactions

29. Analytical procedures performed in the overall review stage of an audit suggest that several
accounts have unexpected relationships. The results of these procedures most likely indicate
that
a. The communication with the audit committee should be revised
b. Irregularities exist among the relevant account balances
c. Additional substantive tests of details are required
d. Internal control activities are not operating effectively

30. The auditor notices significant fluctuations in key elements of the company’s financial
statements. If management is unable to provide an acceptable explanation, the auditor should
a. Consider the matter as a scope limitation
b. Perform additional audit procedures to investigate the matter further
c. Intensify the examination with the expectation of detecting management fraud
d. Withdrawal from the engagement

31. The responsibility for the identification and disclosure of related parties and transactions with
such parties’ rests with the
a. Auditor
b. Entity’s management
c. Financial Reporting Standards Council (FRSC)
d. Securities and Exchange Commission (SEC)

32.When auditing related party transactions, an auditor places primary emphasis on

a. Ascertaining the rights and obligations of the related parties
b. Confirming the existence of the related parties
c. Ensuring that the recording of the related party transactions is equivalent to an arm’s-length
transaction
d. Evaluating the disclosure of the related party transactions
33. Which of the following events most likely indicates the existence of related parties?

a. Making a loan without scheduled terms for repayment of the funds

b. Discussing merger terms with a company that is a major competitor
c. Selling real estate at a price that differs significantly from its book value
d. Borrowing a large sum of money at a variable rate of interest

34. After determining that a related party transaction has, in fact, occurred, an auditor should

a. Obtain an understanding of the business purpose of the transactions

b. Substantiate that the transaction was consummated on terms equivalent to an arm’s-length
transaction
c. Add a separate paragraph to the auditor’s report to explain the transaction
d. Perform analytical procedures to verify whether similar transactions occurred, but were not
recorded

35. The main purpose of management representations is to

a. Shift responsibility for financial statements from the auditors to management

b. Shift responsibility for financial statements from the management to auditors
c. Provide a substitute source of audit evidence for substantive procedures that auditors would
otherwise perform
d. Impress on management its ultimate responsibility for the financial statements and disclosures
 Saint Ferdinand College
College of Accountancy
Operations Auditing

Name: Score:
Course and Year: Date:

Finals Drill: Estate tax

INSTRUCTIONS: Write your final answers on the answer sheet provided below. STRICTLY NO ERASURES.

1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25

Items 1-6
Don Juan, single, Filipino, and resident of Makati City, died intestate on November 15, 2023. He left the
following properties and interests:

House and lot (family home) in Makati City ₱ 800,000

Vacation house in Beverly Hills, California, USA 5,500,000
Commercial land in Makati donated by his father in 1985 2,000,000
Mustang car located in Makati being used by his girlfriend 500,000
Proceeds of life insurance where the beneficiary is his girlfriend (revocable) 1,000,000
Collectible toy collection 1,000,000
Claims against an insolvent person (Filipino resident) whose assets total ₱10,000
and whose liabilities total ₱100,000 100,000
Shares of stock in AB Corp (domestic, not listed with FMV = ₱200,000)
and book value of 100,000
BPI Peso bank account assigned to daughter before death 5,000,000

The expenses and charges on the estate are as follows:

Funeral expenses ₱ 250,000
Accountant's fees incurred before death 600,000
Medical expenses of last illness 800,000
Other claims against the estate 310,000

1. Compute the gross estate.

Hint: The BIR has ruled (in BIR Ruling No. 365-2016, date October 27, 2016) that bank accounts which have been
assigned by the decedent to another before his/her death shall be EXCLUDED from the gross estate of the decedent.
Such bank accounts do not form part of the decedent’s gross estate even though the same are still in the name of the
decedent.
a. ₱11,500,000 c. ₱5,500,000
b. ₱11,000,000 d. None of the above

2. Compute the total allowable deductions against the gross estate.

a. ₱3,500,000 c. ₱3,400,000
b. ₱6,800,000 d. None of the above

3. Compute the estate tax.

a. ₱840,000 c. ₱0
b. ₱252,000 d. None of the above
4. Compute the gross estate if the decedent was a non-resident alien.
a. ₱11,000,000 c. ₱5,500,000
b. ₱5,000,000 d. None of the above

5. Compute the total allowable deductions against the gross estate if the decedent was a non-resident alien
a. ₱ 600,000 c. ₱5,500,000
b. ₱1,000,000 d. None of the above

6. Compute the estate tax if the decedent was a non-resident alien.

a. ₱454,000 c. ₱0
b. ₱270,000 d. None of the above

7. A decedent died single, leaving a family home which consists of a piece of land that he inherited 3 – 1⁄2 years ago
(with a value at the time of P600,000) with a fair value of P800,000 at the time of his death, and a house thereon
which he built at a cost of P650,000, and a fair market value at the time of his death of P450,000. Other properties
in his gross estate have a fair market value of P550,000. Unpaid obligations at the time of his death amounted to
P300,000.

The vanishing deduction is:

a. P 200,000 c. P 40,000
b. P 500,000 d. P225,000

Items 8-9
Maria Cruz, Filipino, single, died on December 24, 2019 leaving the following properties and expenses:
Apartment and lot ₱ 500,000
Toy collection 300,000
Shares of San Miguel Corp. 300,000
Land 100,000
Jeep 20,000
The last 3 properties, namely the SMC shares, the land, and the jeep were acquired by the decedent by gratuitous title
with the following fair market values:
Date FMV on FMV in estate
Acquired date acquired of Maria Cruz
San Miguel shares (donated) July 1, 2012 ₱ 400,000 ₱ 300,000
Land (inherited) October 1, 2016 50,000 100,000
Jeep (inherited) October 1, 2016 100,000 20,000

Expenses:
Funeral expenses ₱ 50,000
Mortgage paid on apartment and lot 300,000
Loss of jeep 20,000

Other information:
a. The land which Maria Cruz inherited had a mortgage of ₱30,000 which he paid before he died.
b. The amount of ₱70,000 of the mortgage on the apartment and lot remained unpaid upon his death.
c. The jeep was carnapped on July 5, 2020.

8. Compute the vanishing deduction that may be availed of in computing the estate tax.
a. ₱22,230
b. ₱14,820
c. ₱7,410
d. ₱0.

9. Compute the vanishing deduction assuming Maria Cruz paid only the amount of ₱20,000 of the mortgage on the
inherited land.
a. ₱27,541
b. ₱16,525
c. ₱18,361
d. ₱0
Items 10-12
Yumao N. Rin, single, died on December 6, 2018, leaving the following assets, expenses, charges, and obligations:
Assets:
Domestic shares ₱ 5,000,000
Foreign shares, U.S. Company has 90% business in the Phils. 700,000
Investment in a foreign partnership 1,000,000
Cash in bank, Manila 1,200,000
Account receivable from a debtor residing in the U.S. (The
account is worthless. Debtor is fully insolvent.) 100,000
Car, model 2017, located in Makati 700,000

Expenses, charges, and obligations:

Funeral expenses 150,000
Judicial expenses incurred in settlement of the estate 100,000
Unpaid income tax for 2016 160,000
Loss through robbery 2 months after death 200,000
Loss in business 80,000
Cash legacy in favor of Philippine National Red Cross 50,000
Cash legacy to City of Makati for children's playground. 100,000

10. Compute the taxable net estate and the estate tax due if decedent was a resident of the Philippines at the time of his
death.
a. ₱3,090,000; ₱185,400
b. ₱3,790,000; ₱227,400
c. ₱2,840,000; ₱170,400
d. None of the above.

11. Compute the taxable net estate and the estate tax due if decedent was a non-resident alien, and there was no
reciprocity.
a. ₱6,635,517: ₱398,131
b. ₱3,090,000; ₱185,400
c. ₱6,923,103; ₱415,386
d. None of the above.

12. Compute the taxable net estate and the estate tax due if decedent was a non-resident alien, and there was reciprocity.
a. ₱521,034; ₱31,262
b. (₱310,000); ₱0
c. ₱21,034; ₱1,262
d. None of the above.

13. One of the assets left by J. Cruz when he died is 100,000 shares of stock of Walt Stick Company with a par value
of ₱4.00 per share. The company has an authorized capital stock of 1,200,000 shares. Unissued shares total
400,000 shares. Retained earnings amount to ₱600,000. The shares of stock of the company are not traded in the
stock exchange. How much will be included in the gross estate of J. Cruz?
a. ₱475,000
b. ₱316,667
c. ₱400,000
d. None of the above.

14. Peter died on Nov. 2, 2021, leaving the following properties

• Common stocks of Sunchamp Corporation (2,000 shares) - listed in the Philippine StockExchange
(highest - P40; lowest - P39).
• Common stocks of AgriNurture Corporation (1,500 shares) - not listed in the stockexchange.
Cost - P50 per share; book value - P45 per share.
• Preferred stocks of Greenergy Inc. (3,000 shares) - not listed in the stock exchange. Cost -P70 per share;
book value - P60 per share; par value - P50 per share
• Car (cost - P600,000; book value - P350,000; market value - P400,000)
• Real properties (zonal value - P120,000; assessed value - P72,000)
The gross estate of Pedro is
a. P817,500
b. P824,000
c. P846,500
d. P816,500

Mr. Delacruz died on November 20, 2023. Some of the properties he left are the following:
Market Value
Mode Date Date Date of
Asset of Acquisition Acquired Acquired Death
Land Purchase 7-3-19 500,000 350,000
Car Donation 10-2-22 800,000 980,000

Other information:
a. The gross estate of the decedent amounts to P3,000,000.
b. The car was mortgaged for P50,000 when it was acquired and Mr. Delacruz paid the same is before he died.
c. The allowable deductions totaled P325,000, which includes judicial expenses of P30,000 and funeral
expenses of P150,000.

15. The vanishing deduction is –

a. P581,000
b. P648,783
c. P637,617
d. P571,000

Mrs. Nathy Gok died on March 20, 2023 leaving a gross estate of P8,000,000 including a land inherited from his uncle
on October 15, 2019 and a car donated to him on April 20, 2017. The following data pertain to the two properties:

Unpaid Mortgage FMV upon receipt FMV upon death

Land P1,000,000 P18, 000,000 P12, 500,000
Car 500,000 3,000,000 4,000,000

The decedent was able to pay ½ of the unpaid mortgage on the land before his death. The deductions are:
Expenses, losses, indebtedness, taxes (excluding the unpaid mortgage
above but including actual funeral expenses of P3,000,000 and
medical expenses of P6,000,000) P12,000,000
Transfer to the Government, included above 3,000,000
Family home (included above) 20,000,000

16. The allowable vanishing deduction is:

a. P2,130,000 c. P4,380,000
b. P4,260,000 d. P6,260,000

17. The taxable net estate based on the preceding number is:
a. P2,174,000 c. P53, 620,000
b. P40,000,000 d. P52,000,000

Martin Marietta Ramsey, single, died on December 15, 2022, leaving the following assets, expenses, charges, and
obligations:

Assets:
Domestic shares ₱ 5,000,000
Foreign shares, U.S. Company has 80% business in the Phils. 700,000
Investment in a domestic partnership 1,000,000
Cash in bank, Manila 1,200,000
Account receivable from a debtor residing in the U.S. (The
account is worthless. Debtor is fully insolvent.) 100,000
Car, model 2021 630,000
Expenses, charges, and obligations:
Funeral expenses 150,000
Judicial expenses incurred in settlement of the estate 100,000
Unpaid income tax for 2020 160,000
Loss through robbery 2 months after death 200,000
Loss in business 80,000
Cash legacy in favor of Philippine National Red Cross 50,000
Cash legacy to City of Makati for basketball court 100,000

18. Compute the taxable net estate and the estate tax due if decedent was a resident of the Philippines at the time of his
death.
a. ₱3,020,000; ₱181,200
b. ₱3,120,000; ₱187,200
c. ₱2,840,000; ₱170,400
d. None of the above.
19. Compute the taxable net estate and the estate tax due if decedent was a non-resident alien, and there was no
reciprocity.
a. ₱7,723,103: ₱463,386
b. b.₱3,090,000; ₱185,400
c. ₱6,820,000; ₱409,200
d. d.₱6,853,372; ₱411,202

20. In which of the following cases will filing an estate tax return be necessary?
a. When the gross estate does not include any registrable property and is valued at ₱640,000. Total deductions
amount to ₱530,000.
b. When the gross estate consists of the following properties: Cash, ₱40,000 and jewelry worth ₱4,730,000.
Standard deduction of ₱5,000,000 was claimed.
c. When the gross estate, which does not include any registrable property, is valued at ₱450,000. Standard
deduction is claimed.
d. None of the above.

J. Cruz, Filipino, married, died testate on January 10, 2018. Records show the following assets and deductions on the
date of death:
Condominium unit in Makati (family home) ₱40,000,000
Apartment in HongKong 300,000
Y Corporation shares (domestic shares), exclusive 250,000
Note receivable from insolvent debtor residing in Manila 60,000
Note receivable from insolvent debtor residing in HongKong 40,000

Deductions claimed:
Cost of cemetery lot 35,000
Expenses of internment 25,000
Note payable, contracted 2017, not notarized 30,000
Note payable, contracted 2016, notarized, paid on Jan. 22, 2018 100,000
Note payable, contracted 2016, notarized, paid on Jan. 4, 2018 50,000
Mortgage on condominium unit in Makati 100,000
Mortgage on apartment in HongKong 50,000
Legacy of Y shares to J. Cruz's brother 40,000
Legacy of Y shares to Municipality of Orani, Bataan for schoolhouse 100,000
Legacy of Y shares to a social welfare organization which uses
35% of bequests/gifts it receives to cover administration costs 30,000

21. Determine the gross estate of J. Cruz.

a. ₱40,300,000 c. ₱40,350,000
b. ₱40,250,000 d. None of the above.

22. Determine the net estate of J. Cruz subject to the estate tax.
a. ₱40,050,000 c. ₱ 5,145,000
b. ₱ 5,175,000 d. None of the above.
Martha Cruz, Filipino, single, died on December 24, 2018 leaving the following properties and expenses:
Apartment unit ₱ 500,000
Toy collection 300,000
Shares of San Miguel Corp. 300,000
Land 100,000
Jeep 20,000
The last 3 properties, namely the SMC shares, the land, and the jeep were acquired by the decedent by gratuitous title
with the following fair market values:
Date FMV on FMV in estate
Acquired date acquired of Maria Cruz
San Miguel shares (donated) July 1, 2012 ₱ 400,000 ₱ 300,000
Land (inherited) October 1, 2016 50,000 100,000
Jeep (inherited) October 1, 2013 100,000 20,000

Expenses:
Funeral expenses ₱ 50,000
Mortgage paid on apartment unit 300,000
Loss of jeep 20,000

Other information:
a. The land which Martha Cruz inherited had a mortgage of ₱30,000 which he paid before he died.
b. The amount of ₱70,000 of the mortgage on the apartment and lot remained unpaid upon his death.
c. The jeep was carnapped on July 5, 2019

23. Compute the vanishing deduction that may be availed of in computing the estate tax.
a. ₱22,230
b. ₱11,115
c. ₱18,525
d. None of the above.

24. Compute the vanishing deduction assuming Martha Cruz paid only the amount of ₱20,000 of the mortgage on the
inherited land.
a. ₱27,541
b. ₱16,525
c. ₱18,361
d. None of the above.

25. Mr. A died leaving a gross estate of ₱870,000. Among the assets are: (1) a receivable from B, businessman, in the
amount of ₱40,000; and (2) another receivable from C, a cousin, in the amount of ₱30,000.

B was declared an insolvent by a court. The court determined that B’s assets that were available for payment to his
creditors totalled ₱60,000, while his total liabilities totaled ₱100,000.

On the other hand, C, without properties, was able to pay only ₱10,000.

How much can the estate deduct as claims against insolvent persons for purposes of computing the
net estate?
a. ₱70,000
b. ₱36,000
c. ₱58,000
d. None of the above.
 Saint Ferdinand College

College of Accountancy

TAX REVIEW

Name: Score:
Year and course: Date:
1. 6. 11. 16. 21.
2. 7. 12. 17. 22.
3. 8. 13. 18. 23.
4. 9. 14. 19. 24.
5. 10. 15. 20. 25.

The decedent was married at the time of death.

Cash owned by the decedent before the marriage P5,000,000
Real property inherited by the decedent before the marriage 6,000,000
Personal property received by the wife as gift before the marriage 400,000
Property acquired by the decedent with cash owned before the marriage 600,000
Clothes of the decedent, purchased with the exclusive money of the wife 500,000
Jewelry purchased with the exclusive cash of the decedent 1,000,000
Property unidentified when and by whom acquired 1,200,000
Cash-income during the marriage 2,000,000

1. Exclusive gross estate if the spouses were under the system of conjugal partnership of gains?
a. 11,600,000 b. 10,600,000 c. 6,600,000 d. 12,600,000
2. Community gross estate if the spouse were under the system of absolute community property?
a. 10,200,000 b. 8,200,000 c. 9,200,000 d. 7,200,000
Mr. J Chavez died leaving the following properties
Rest house in Cebu, acquired before marriage P6,000,000
Income from rest house in Cebu 600,000
Condominium in Davao, brought to marriage by wife 3,600,000
Income from condominium in Davao 360,000
Town house in Quezon City, acquired during marriage 10,500,000
Income from town house in Quezon City 1,050,000
Car, inherited by the wife during marriage (the decedent provided in his will that it shall form part of
1,300,000
the common properties of the spouse)
Jewelry, acquired during marriage for exclusive use of the wife 200,000

3. How much is the conjugal properties under Conjugal Partnership of Gains?

a. 12,510,000 b. 18,510,000 c. 22,310,000 d. 23,610,000
4. How much is the gross estate under Conjugal Partnership of Gains?
a. 12,510,000 b. 18,510,000 c. 22,310,000 d. 23,610,000
5. How much is the community properties under Absolute Community of Property?
a. 12,510,000 b. 18,510,000 c. 22,310,000 d. 23,610,000
6. How much is the gross estate under Absolute Community or Property?
a. 12,510,000 b. 18,510,000 c. 22,310,000 d. 23,610,000
The estate of Pedro, resident citizen decedent, married, who died on April 1, 2021 were as follows:
House and lot (Family Home)
The lot was acquired at a cost of P3M, five (5) years ago, before marriage, while the house was
P 14,000,000
constructed on March 1, 2021, during marriage, at a cost of P10M from partnership funds. The lot had
a FMV of P4,000,000 after construction of the house
Other properties acquired during marriage 6,000,000
Vacation house in Batanes inherited on Feb. 14, 2020, during marriage, then with a fair market value of
2,500,000
P1,300,000
Property in Davao, received as gift during marriage from a friend on Jan. 12, 2020 (the applicable
2,300,000
donor's tax was not paid by the donor)
Rental income on the property in Davao up to the time of death 1,200,000
Expenses/Claims:
Funeral Expenses 420,000
Judicial Expenses 800,000
Casualty losses incurred on December 10, 2021 600,000
Claims against the estate 1,600,000
Medical expenses within 1 year prior to death, only half was receipted 4,000,000
7. The vanishing deduction is?
a. 1,190,000 b. 952,000 c. 960,000 d. 714,000
8. How much is the net taxable estate under Conjugal partnership of Gains?
a. 3,926,000 b. 6,426,000 c. 3,426,000 d. 1,348,000
9. How much is the net taxable estate under Absolute Community of Property?
a. 4,836,000 b. (2,714,000) c. 1,948,000 d. 2,714,000
The decedent was married and under the system of absolute community of property.
Property inherited one and one-half years ago and before the marriage (with a fair market value of
P 250,000
P160,000 when inherited and a mortgage of P60,000, which mortgage was paid in full by the decedent)
Other properties 2,750,000
Deductions against community properties, except vanishing deduction 600,000

10. Vanishing deduction is?

a. 64,000 b. 80,000 c. 32,000 d. Some other amount
11. Net taxable estate?
a. 1,336,000 b. 168,000 c. 2,336,000 d. Some other amount
Mr. X, a resident citizen of the Philippines died October 10,2020 leaving the following properties, rights, obligations and
chargers.
Conjugal properties (including a family home of P13,000,000 and amount receivable under RA 4917
P 16,000,000
of P200,000)
Exclusive properties (including cash of P500,000 inherited 4 ½ years ago) 4,000,000
Medical expenses, unpaid January 2013 350,00
Judicial Expenses 500,000
Other obligations 100,000

12. The deduction for family home

a. 13,000,000 b. 10,000,000 c. 7,500,000 c. 6,500,000
13. Vanishing deduction
a. 467,500 b. 99,500 c. 191,500 d. 145,500
Mr. And Mrs. J. Reyes have the following assets:
Properties inherited by Mr. Reyes before the marriage P 100,000
Properties brought to the marriage by Mrs. Reyes 400,000
Properties inherited during the marriage by Mr. Reyes 200,000
Income of the properties in No. 3 20,000
Properties inherited during the marriage by Mrs. Reyes 500,000
Income from properties in No. 5 50,000
Property acquired during the marriage 300,000
Income of the property in No. 7 100,000

14. Under Conjugal partnership of gains, how much is the total exclusive properties of Mr. Reyes?
a. 400,000 b. 420,000 c. 300,000 d. 200,000
15. Under Conjugal partnership of gains, how much is the total exclusive properties of Mrs. Reyes?
a. 400,000 b. 900,000 c. 300,000 d. 920,000
16. Under conjugal partnership of gains, how much is the total conjugal properties?
a. 470,000 b. 500,000 c. 200,000 d. 420,000
17. Under absolute Community, how much is the total community properties?
a. 400,000 b. 900,000 c. 300,000 d. 920,000
18. Under absolute Community, how much is the total exclusive properties of Mr. Reyes?
a. 200,000 b. 220,000 c. 320,000 d. 550,000
Mr. Eks died on December 1, 2021 leaving the following properties:
Farmland in Baguio, brought to marriage by wife 5,400,000
Income from farmland in Baguio 500,000
Apartment units in Quezon City, acquired during marriage 4,000,000
Rental income from apartment units in Quezon City 80,000
Rest house in Tagaytay, acquired before marriage 5,000,000
Income from rest house in Tagaytay 400,000
Car, inherited by wife during marriage 1,950,000
Jewelry, acquired during marriage for exclusive use
300,000
and using the exclusive money of the wife
House and lot inherited from his father on September 1, 2020
4,000,000
(fair market value when inherited, P3,000,000), used as family home 4,000,000
Unpaid mortgage on the inherited house and lot (original mortgage, P1,200,000) 200,000
Car received as gift from his mother in 2021 750,000
Deductible losses, indebtedness, taxes 1,500,000
19. How much is the estate tax due under Conjugal Partnership of Gains (CPG)?
 a. 367,771 b. 427,771 c. 232,171 d. 127,771
20. How much is the estate tax due under Absolute Community of Property (ACP)?
a. 145,110 b. 570,510 c. 385,110 d. 445,110
The following information are gathered regarding the inheritance due to death of a married individual, Filipino and a
resident of Baguio City, Philippines:

• Residential house and lot in Baguio, acquired at P1,000,000 with zonal value of P3,000,000 at the date of death.
• Jewelry found on the body of the decedent at the date of death, with fair market value of P500,000. This asset is
determined as exclusive property of the decedent.
• Real property in Mindanao, Philippines, bought 10 years ago, assessed at that time for P1,000,000. An interested
buyer would like to buy this property a week before his death at P5,000,000
• Investment in Bonds, local and foreign, P600,000
• Shares of stock of various domestic corporations, listed in the local stock exchange at date of death at aggregate
value of 400,000
• Real property located in Pangasinan, inherited from his father 3 years ago. This was taxed at 2,500,000 when
transferred from his father to hi name. At that time, he assumed the unpaid mortgage of 500,000. This has 20%
assessment level at declared fair market value of 2,600,000. The BIR zonal valuation stated a fair value of
2,800,0
• Income from farm earned before the date of death, 800,000 (net of related income tax).00 at date of death.
• Commercial lot inherited by wife during marriage. This was valued at 6,000,000 when inherited by wife and it
has a fair market value of 10,000,000 at the date of death, 3,000,000, (net of related income tax).
• Property brought to marriage by his wife, 6,000,000.
Deductions claimed by the executor:
Actual funeral expenses 180,000
Judicial expenses 900,000
Medical expenses 1,000,000
Unpaid mortgage on property in Pangasinan 200,000
Various claims of creditors 8,000,000
Claims against insolvent person 800,000

21. Under the regime of conjugal partnership of gains, how much is the gross exclusive estate?
a. 3,300,000 b. 13,600,000 c. 16,900,000 d. 16,600,000
22. Under the regime of conjugal partnership of gains, how much is the gross conjugal estate?
a. 3,300,000 b. 13,600,000 c. 16,900,000 d. 16,600,000
23. Under the regime of absolute community of property, how much is the exclusive estate?
a. 3,300,000 b. 13,600,000 c. 16,900,000 d. 16,600,000
24. Under the regime of absolute community of property, how much is the conjugal estate?
a. 3,300,000 b. 13,600,000 c. 16,900,000 d. 16,600,000
25. Under the regime of absolute community of property, how much is the total gross estate?
a. 3,300,000 b. 13,600,000 c. 16,900,000 d. 16,600,000
Name: ____________________________________________________Score:____________________
Course and Year:____________________________________________Date:_____________________

1 6 11 16 21 26 31
2 7 12 17 22 27 32
3 8 13 18 23 28 33
4 9 14 19 24 29 34
5 10 15 20 25 30 35

AUDITING IN A COMPUTERIZED ENVIRONMENT

1. Which statement is incorrect when auditing in a CIS environment?
a. A CIS environment exists when a computer of any type or size is involved in the processing by the
entity of financial information of significance to the audit, whether that computer is
operated by the entity or by a third party.
b. The auditor should consider how a CIS environment affects the audit.
c. The use of a computer changes the processing, storage and communication of financial information
and may affect the accounting and internal control systems employed by the entity.
d. A CIS environment changes the overall objective and scope of an audit.

2. Which of the following standards or group of standards is mostly affected by a computerized

information system environment?
a. General standards
b. Reporting standards
c. Second standard of field work
d. Standards of fieldwork

3. Which of the following is least considered if the auditor has to determine whether specialized CIS
skills are needed in an audit?
a. The auditor needs to obtain a sufficient understanding of the accounting and internal control
system affected by the CIS environment.
b. The auditor needs to determine the effect of the CIS environment on the assessment of overall risk
and of risk at the account balance and class of
transactions level.
c. Design and perform appropriate tests of controls and substantive procedures.
d. The need of the auditor to make analytical procedures during the completion stage of audit.

4. It relates to materiality of the financial statement assertions affected by the computer processing.
a. Threshold
b. Relevance
c. Complexity
d. Significance

5. Which of the following least likely indicates a complexity of computer processing?

a. Transactions are exchanged electronically with other organizations without manual review of their
propriety.
b. The volume of the transactions is such that users would find it difficult to identify and correct errors
in processing.
c. The computer automatically generates material transactions or entries directly to another
applications.
d. The system generates a daily exception report

6. The nature of the risks and the internal characteristics in CIS environment that the auditors are
mostly concerned include the following except:
a. Lack of segregation of functions.
b. Lack of transaction trails.
c. Dependence of other control over computer processing.
d. Cost-benefit ratio.

7. Which of the following is least likely a risk characteristic associated with CIS environment?
a. Errors embedded in an application’s program logic maybe difficult to manually detect on a timely
basis.
b. Many control procedures that would ordinarily be performed by separate individuals in manual
system maybe concentrated in CIS.
c. The potential unauthorized access to data or to alter them without visible evidence maybe greater.
d. Initiation of changes in the master file is exclusively handled by respective users.
8. Which of the following significance and complexity of the CIS activities should an auditor least
understand?
a. The organizational structure of the client’s CIS activities.
b. Lack of transaction trails.
c. The significance and complexity of computer processing in each significant accounting application.
d. The use of software packages instead of customized software.

9. Which statement is correct regarding personal computer systems?

a. Personal computers or PCs are economical yet powerful self-contained general purpose computers
consisting typically of a central processing unit (CPU), memory, monitor, disk drives, printer cables
and modems.
b. Programs and data are stored only on non-removable storage media.
c. Personal computers cannot be used to process accounting transactions and produce reports that
are essential to the preparation of financial statements.
d. Generally, CIS environments in which personal computers are used are the same with other CIS
environments.

10. A personal computer can be used in various configurations, including

a. A stand-alone workstation operated by a single user or a number of users at different times.
b. A workstation which is part of a local area network of personal computers.
c. A workstation connected to a server.
d. All of the above.

11. Which statement is incorrect regarding personal computer configurations?

a. The stand-alone workstation can be operated by a single user or a number of users at different
times accessing the same or different programs.
b. A stand-alone workstation may be referred to as a distributed system.
c. A local area network is an arrangement where two or more personal computers are linked together
through the use of special software and communication lines.
d. Personal computers can be linked to and used as part of such systems, for example, as an
intelligent on-line workstation or as part of a distributed accounting system.

12. Which of the following is the least likely characteristic of personal computers?
a. They are small enough to be transportable.
b. They are relatively expensive.
c. They can be placed in operation quickly.
d. The operating system software is less comprehensive than that found in larger computer
environments.

13. Which of the following is an inherent characteristic of software package?

a. They are typically used without modifications of the programs.
b. The programs are tailored-made according to the specific needs of the user.
c. They are developed by software manufacturer according to a particular user’s specifications.
d. It takes a longer time of implementation.
14. Which of the following is not normally a removable storage media?
a. Compact disk
b. Tapes
c. Diskettes
d. Hard disk

15. It is a computer program (a block of executable code) that attaches itself to a legitimate program
or data file and uses itself as a transport mechanism to reproduce itself without the knowledge of the
user.
a. Virus
b. System management program
c. Utility program
d. Encryption

16. Which statement is incorrect regarding internal control in personal computer environment?
a. Generally, the CIS environment in which personal computers are used is environment, the
distinction between general CIS controls and CIS less structured than a centrally-controlled CIS
environment.
b. Controls over the system development process and operations may not be viewed by the
developer, the user or management as being as important or cost-effective.
c. In almost all commercially available operating systems, the built-in security provided has gradually
increased over the years.
d. In a typical personal computer application controls is easily ascertained.

17. Personal computers are susceptible to theft, physical damage, unauthorized access or
misuse of equipment. Which of the following is least likely a physical security to restrict
access to personal computers when not in use?
a. Using door locks or other security protection during non-business hours.
b. Fastening the personal computer to a table using security cables.
c. Locking the personal computer in a protective cabinet or shell.
d. Using anti-virus software programs.

18. Which of the following is not likely a control over removable storage media to prevent
misplacement, alteration without authorization or destruction?
a. Using cryptography, which is the process of transforming programs andinformation into an
unintelligible form.
b. Placing responsibility for such media under personnel whose responsibilities include duties of
software custodians or librarians.
c. Using a program and data file check-in and check-out system and locking the designated storage
locations.
d. Keeping current copies of diskettes, compact disks or back-up tapes and hard disks in a fireproof
container, either on-site, off-site or both.
19. Which of the following least likely protects critical and sensitive information from unauthorized
access in a personal computer environment?
a. Using secret file names and hiding the files.
b. Keeping of back up copies offsite.
c. Employing passwords.
d. Segregating data into files organized under separate file directories.

20. It refers to plans made by the entity to obtain access to comparable hardware, software and data
in the event of their failure, loss or destruction.
a. Back-up
b. Encryption
c. Anti-virus
d. Wide Area Network (WAN)
21. The effect of personal computers on the accounting system and the associated risks
will least likely depend on
a. The extent to which the personal computer is being used to process accounting applications.
b. The type and significance of financial transactions being processed.
c. The nature of files and programs,utilized in the applications.
d. The cost of personal computers.

22. The auditor may often assume that control risk is high in personal computer systems since, it may
not be practicable or costeffective for management to implement sufficient controls to reduce the
risks of undetected errors to a minimum level. This least likely entail
a. More physical examination and confirmation of assets.
b. More analytical procedures than tests of details.
c. Larger sample sizes.
d. Greater use of computer-assisted audit techniques, where appropriate.

23. Computer systems that enable users to access data and programs directly through workstations
are referred to as
a. On-line computer systems
b. Personal computer systems
c. Database management systems (DBMS)
d. Database systems

24. On-line systems allow users to initiate variousfunctions directly. Such functions include:
I. Entering transactions
II. Requesting reports
III. Making inquiries
IV. Updating master files
a. I, II, III and IV
b. I and II
c. I, II and III
d. I and IV

25. Many different types of workstations may be used in on-line computer systems. The functions
performed by these workstationsleast likely depend on their
a. Logic
b. Transmission
c. Storage
d. Cost

26. Types of workstations include General Purpose Terminals and Special Purpose Terminals. Special
Purpose Terminals include
a. Basic keyboard and monitor
b. Point of sale devices
c. Intelligent terminal
d. Personal computers

27. Special Purpose Terminal used to initiate, validate, record, transmit and complete various banking
transactions
a. Automated teller machines
b. Intelligent terminal
c. Point of sale devices
d. Personal computers
28. Which statement is incorrect regarding workstations?
a. Workstations may be located either locally or at remote sites.
b. Local workstations are connected directly to the computer through cables.
c. Remote workstations require the use of telecommunications to link them to the computer.
d. Workstations cannot be used by many users, for different purposes, in different locations all at the
same time.

29. On-line computer systems may be classified according to

a. How information is entered into the system.
b. How it is processed.
c. When the results are available to the user.
d. All of the above.

30. In an on-line/real time processing system

a. Individual transactions are entered at workstations, validated and used to update related computer
files immediately.
b. Individual transactions are entered at a workstation, subjected to certain validation checks and
added to a transaction file that contains other transactions entered during the period.
c. Individual transactions immediately update a memo file containing information which has been
extracted from the most recent version of the master file.
d. The master files are updated by other systems.

31. It combines on-line/real time processing and on-line/batch processing.

a. On-Line/Memo Update (and Subsequent Processing)
b. On-Line Downloading/Uploading Processing
c. On-Line/Inquiry
d. On-Line/Combined Processing

32. It is a communication system that enables computer users to share computer equipment,
application software, data and voice and video transmissions.
a. Network
b. File server
c. Host
d. Client

33. A type of network that multiple buildings are close enough to create a campus, but the space
between the buildings is not under the control of the company is
a. Local Area Network (LAN)
b. Metropolitan Area Network (MAN)
c. Wide Area Network (WAN)
d. World Wide Web (WWW)

34. Which of the following is least likely a characteristic of Wide Area Network (WAN)?
a. Created to connect two or more geographically separated LANs.
b. Typically involves one or more longdistance providers, such as a telephone company to provide the
connections.
c. WAN connections tend to be faster than LAN.
d. Usually more expensive than LAN.

35. Gateway is
a. A hardware and software solution that enables communications between two
dissimilar networking systems or protocols.
b. A device that forwards frames based on destination addresses.
c. A device that connects and passes packets between two network segments that use the same
communication protocol.
d. A device that regenerates and retransmits the signal on a network.
 Saint Ferdinand College
College of Accountancy
AUDITING REVIEW
Name:________________________________________________________________ Score:________________
CourseandYear:__________________________________________________________ Date:_________________

1. 6. 11. 16. 21. 26 31

2. 7. 12. 17. 22. 27 32
3. 8. 13. 18. 23. 28 33
4. 9. 14. 19. 24. 29 34
5. 10. 15. 20. 25. 30 35

1. Which of the following is not an element of quality control?

a. Acceptance and continuance of client relationships and specific engagements.
b. Human resources.
c. Internal control.
d. Monitoring.
2. Quality control for a CPA firm, as referred to in Statements on Quality Control Standards, applies to
a. Auditing services only.
b. Auditing and management advisory services.
c. Auditing and tax services.
d. Auditing and accounting and review services.
3. One of a CPA firm’s basic objectives is to provide professional services that conform with professional standards. Reasonable assurance
of achieving this basic objective is provided through
a. A system of quality control.
b. A system of peer review.
c. Continuing professional education.
d. Compliance with generally accepted accounting principles.
4. Which of the following is correct concerning PCAOB guidance that uses the term “should”?
a. The auditor must fulfill the responsibilities.
b. The auditor must comply with requirements unless s/he demonstrates that alternative actions were sufficient to achieve the
objectives of the standard.
c. The auditor should consider performing the procedure; whether the auditor performs depends on the exercise of professional
judgment in the circumstances.
d. The auditor has complete discretion as to whether to perform the procedure.
5. Firm includes the following except
A. A sole practicing professional accountant.
B. An entity that controls a partnership of professional accountants.
C. An entity controlled by a partnership of professional accountants.
D. A sole practitioner, partnership or corporation of professional accountants.
6. Existing accountant, as defined in the Code of Ethics, means:
A. A professional accountant employed un industry, commerce, the public sector or education.
B. A professional accountant in public practice currently holding an audit appointment or carrying out accounting taxation,
consulting or similar professional services for a client.
C. Those persons who hold a valid certificate issued by the Board of Accountancy
D. A sole proprietor or each partner or person occupying a position similar to that of a partner and each staff in a practice providing
professional services to a client irrespective of their functional classification (e.g. audit, tax or consulting) and professional
accountants in a practice having managerial responsibilities.
7. The term professional accountant in public practice includes the following except:
A. A sole proprietor providing professional services to a client.
B. Each partner occupying a position similar to that of a partner staff in a practice providing professional services to a client.
C. Professional accountants employed in the public sector having managerial responsibilities.
D. A firm of professional accountants in public practice.
8. The term receiving accountant includes the following except:
A. A professional accountant in public practice to whom the existing has referred tax engagement.
B. A professional accountant in public practice to whom the client of the existing accountant has referred audit engagement.
C. A professional accountant in public practice who is consulted in order to meet the needs of the client.
D. A professional accountant in public practice currently holding an audit appointment or carrying out accounting, taxation,
consulting or similar professional services for a client.
9. Related entity is an entity that has any of the following relationships with the client, except:
A. An entity that has direct or indirect control over the client provided that the client is material to such entity.
B. An entity with a direct financial interest in the client even though such entity has no significant influence over the client
provided the interest in the client is material to such entity.
C. An entity over which the client has direct or indirect control.
 D. An entity which is under common control with the client (referred to as a ―sister entity‖) provided the sister entity and the
client are both material to the entity that controls both the client and sister entity.
10. A primary purpose for establishing a code of ethics within a professional organization is to:
A. Demonstrate the acceptance of responsibility to the interest of those served by the profession.
B. Reduce the likelihood that members of the profession will be sued for substandard work.
C. Ensure that all members of the profession possess approximately the same level of competence.
D. Require the members of profession to exhibit loyalty in all matters pertaining to the affairs of the organization.
11. Which statement is incorrect regarding the Code of Ethics for Professional Accountants in the Philippines?
A. Professional accountants refer to persons who are registered in the PRC AS Certified Public Accountants (CPA) and who hold a valid
certificate issued by the Board of Accountancy.
B. Where a national statutory requirement is in conflict with a provision of the IFAC Code, the IFAC Code requirement prevails.
C. The Code of Ethics for Professional Accountants in the Philippines is mandatory for all CPAs and is applicable to professional services
performed in the Philippines on or after June 30, 2008.
D. Professional accountants should consider the ethical requirements as the basic principles, which they should follow in performing their
work.
12. The communication to the public of facts about a professional accountant, which are not designed for the deliberate promotion of that
professional accountant.
A. Publicity
B. Indirect Promotion
C. Advertising
D. Solicitation
13. Advertising, as defined in the Code of Ethics, means
A. The communication to the public of facts about a professional accountant which are not designed for the deliberate promotion
of that professional accountant.
B. The approach to a potential client for the purpose of offering professional services.
C. The communication to the public of information as to the services or skills provided by professional accountants in public
practice with a view to procuring professional business.
D. Any of the given choices.
14. The following bodies develop and or issue technical and professional standards for implementation:
I. Board of Accountancy
II. National Economic Development Authority
III. Financial Reporting Standards Council
IV. Securities and Exchange Commission
V. Auditing and Assurance Standards Council
VI. Cooperative Commission of the Philippines
According to the revised code of ethics for CPAs, which of the foregoing are sources of technical and professional standards in the
Philippines?
A. I, III, IV, V
B. I, III, IV, V, VI
C. I, III, IV
D. All of them
15. The attainment of professional competence can be fulfilled by a combination of:
I. Period of work experience
II. High standard for professional education
III. High standard of general education
IV. Training and examination in professionally relevant subjects What should be the logical pattern of the foregoing development
for a professional accountant?
A. III, II, IV, I
B. III, I, II, IV
C. II, III, IV, I
D. II, III, I, IV
16. Which of the following is least likely the basis of determining audit fees?
A. The skill and knowledge required for the type of work involved.
B. The degree of responsibility ad urgency that the work entails.
C. The expected outcome of the engagement.
D. The required level of training and experience of the persons engaged on the work.
17. Which of the following is not allowed by the revised code of ethics?
A. A professional accountant in public practice may issue to client or, in response to an unsolicited request, to a non-client a
factual and objectively worded of the services provided.
B. Booklets and other documents bearing the name of a professional and giving technical information for the assistance of staff
or clients may be issued to such persons, or other professional accountants or other interested parties.
C. The use of the name of an international accounting firm affiliation/ correspondence is generally allowed.
D. A firm or CPA practitioner can continue to use the term ―Accredited‖ or any similar words or phrase calculated to convey the
same meaning if the claimed accreditation has not expired.
18. How frequent can a professional accountant have press and other media releases commemorating their anniversaries in public practice
by informing the public of their achievements or accomplishments in contributing toward nation building or enhancing the image r
standards of the accounting profession?
A. 2 years
B. 3 years
C. 5 years
 D. 6 years

19. Which of the following is not allowed to be included in a website of a firm of professional accountants?
A. Names of partners/ principals with their educational attainment.
B. Membership in any professional body.
C. Awards received
D. Listing of the firm ‘s clients.
20. In their fiduciary role, the professional accountants owe their primary loyalty to:
A. The accounting profession
B. The general public
C. The client
D. Government regulatory agencies
21. Which of the following is a distinguishing mark of the accountancy profession?
A. A drive to excellence
B. Acceptance of the responsibility to act in the public interest
C. Professional objectivity
D. Professional skepticism
22. Which statement is incorrect regarding the Code of Ethics for Professional Accountants in the Philippines?
A. The objectives as well as the fundamental principles are of a general nature and are not intended to be used to solve a
professional accountant ‘s ethical problems in a specific case.
B. The code is divided in two parts, part A and part B.
C. Part A applies to all professional accountants unless otherwise specified.
D. Part B applies only to those professional accountants in public practice.
23. A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession.
This is a fundamental principle of:
A. Objectivity
B. Professional competence and due care
C. Professional behavior
D. Integrity
24. The IFAC Code of Professional Conduct will ordinarily be considered to have been violated when the member represents that specific
consulting services will be performed for a stated fee and it is apparent at the time of the representation that the
A. Actual fee would be substantially higher.
B. Actual fee would be substantially lower than the fees charged by other members for comparable services.
C. Fee was a competitive bid.
D. Member would not be independent.
25. Which of the following is not one of the fundamental principles of ethical conduct for professional accountants?
A. Integrity
B. Confidentiality
C. Loyalty
D. Professional competence and due care
26. To what fundamental principle does the following statement best fit? A professional accountant is likened to a prudent father to his son.
A. Professional competence and due care
B. Confidentiality
C. Integrity
D. Objectivity
27. Which fundamental principle is seriously threatened by an engagement that is compensated based on the net proceeds on loans received
by the client from a commercial bank?
A. Objectivity
B. Professional behavior
C. Confidentiality
D. Integrity
28. Which of the following is required to comply with the fundamental principle of professional competence and due care?
A. A professional accountant should not allow bias, conflict of interest or undue influence of others to override professional or
business judgment.
B. A professional accountant should act diligently and in accordance with technical and professional standards when providing
professional services.
C. A professional accountant should comply
D. The accountant should observe fair dealings and truthfulness.
29. “A professional accountant should be straight-forward and honest in all his professional and business relationships”. This description
appropriately describes the fundamental principle of:
A. Integrity
B. Objectivity
C. Confidentiality
D. Professional Behavior
30. It is essential that uses of the audited financial statements regard CPA firms as
A. Competent
B. Unbiased
C. Technically proficient
D. All of the given choices
31. The Code of Professional Ethics states, in part, that a CPA should maintain integrity and objectivity. Objectivity refers to the CPA‘s
ability to
A. Determine accounting practices that were consistently applied
B. Maintain an impartial attitude on all matters which come under his review
C. Determine the materiality of items
D. Insist on all matters regarding audit procedures
32. Which of the following values is not necessary for a professional accountant?
A. Honesty
B. Objectivity
C. Integrity
D. A primary commitment to self-interest
33. Which of the following is not a fundamental principle in codes of ethics for professional accountants?
A. Act in the client‘s best interest
B. Objectivity and independence
C. Maintain the good reputation of the profession
D. Maintain confidentiality
34. Which of the following statements about conceptual framework of the code of ethics is incorrect?
A. A conceptual framework that requires a professional accountant to identify, evaluate and address threats to compliance with
the fundamental principles, rather than merely with a set of specific rules which may be arbitrary is in the public interest.
B. As a concern to public interests, the professional accountant should comply with a set of specific rules rather than arbitrarily
identify, evaluate and address threats to compliance with fundamental principles.
C. If identifies threats are other than clearly insignificant, a professional accountant should appropriately apply safeguards to
eliminate the threats or reduce them to an acceptable level.
D. The Code provides a framework to assist a professional accountant to identify, evaluate and respond to threats to compliance
with the fundamental principles.
35. Which of the following is true of the conceptual framework approach?
A. It is impossible to define every situation that creates specific threats and and specify the appropriate mitigating action.
B. A professional accountant should take qualitative but not quantitative factors into account when considering the significance
of a threat.
C. A professional accountant should take quantitative but not qualitative factors into account when considering the significance
of a threat.
D. All inadvertent violations of the code of Ethics, irrespective of their nature and significance, always compromise compliance
with the fundamental principles
 Saint Ferdinand College
College of Accountancy
TAX REVIEW

Name: Score:
Course and Year: Date:

ESTATE TAX - MARRIED

INSTRUCTIONS: Write your final answers on the answer sheet provided below. STRICTLY NO ERASURES.

1. 6. 11. 16. 21.

2. 7. 12. 17. 22.
3. 8. 13. 18. 23.
4. 9. 14. 19. 24.
5. 10. 15. 20. 25.
BHABYQ, a resident citizen, died on August 15, 2020.
Value at the death of BHABYQ
Conjugal property 4,500,000
House, exclusive property of BHABYQ 1,500,000
Other exclusive property of BHABYQ 1,200,000
AMOUNT
Actual funeral expenses incurred 250,000
Judicial expenses, incurred evenly for twelve months 480,000
Deductible claims against the estate 420,000
Loss from claims against insolvent persons 140,000
Insured loss from earthquake 200,000
The house, when it was inherited on September 16, 2015, had a fair market value of P1,150,000. The house was mortgage
to secure a debt of P600,000, which was assumed by BHABYQ. Up to this date, the debt has not been fully paid, and it is
now being claimed as a deductible claim against the estate. Assume that all ordinary deductions are chargeable to the
community property.
1. Compute for the gross estate.
a. P2,700,000 c. P7,200,000
b. P4,950,000 d. P7,620,000
2. Compute for the vanishing deduction.
a. P178,911 c. P232,404
b. P183,202 d. P271,010

Chris, a resident citizen, is an engineer and is married to Dessary on April 25, 2019. Chris and Dessary did not enter into
any antenuptial agreement as to their property relations. Due to a freak accident at work, Chris died on August 5, 2022,
leaving behind the ff items:
Car acquired on March 5, 2017 P850,000
House and lot where the entire family resides,
purchased on April 17, 2019 P12,000,000
Vacation house and lot located from Chris’s uncle,
mortgage was assumed by Chris
FMV on January 3, 2021 P6,000,000
FMV on August 5, 2022 P8,800,000
Mortgage due on January 3, 2021 P1,500,000
Mortgage still due on August 5, 2022 P870,000
Unpaid real property taxes on the property as of Aug. 5, 2022 P50,000
Balance as of August 5, 2022 of Chris’s cash in bank in the
PNB unknown when earned P1,600,000
Life insurance proceeds, wife Dessary is designated as the
revocable beneficiary P1,200,000
Parcel of land located in Minnesota, United States P3,500,000
Shares in ABC Corp., a corp. listed in the local stock exchange P80,000
Household effects (furniture, electronics), 80% purchased
before the marriage, for the common use of the family P600,000
Personal effects (clothing, hygiene items) P50,000
Receivables collectible from Mr. Banks, outstanding as of death P500,000
After Chris’s death, the following events transpired or were made known to the executor of the estate:
a. Chris’s uncle provided no instruction to Chris as to whom the vacation house and lot will be transmitted in the event of
the latter’s death.
b. Mr. Banks is insolvent. Mr. Banks had an asset of P1,000,000 and an outstanding liability of P4,000,000.
c. Chris’s heirs made withdrawal on December 1, 2022 of P500,000 on his PNB account.
d. Chris’s car was stolen on September 3, 2022.
3. Statement 1: As a general rule, Chris’s gross estate will include his properties within and outside the Philippines.
Statement 2: Assuming Chris is a non-resident citizen, his estate will still include his properties within and outside PH.
a. Only Statement 1 is true c. Both statements are true
b. Only Statement 2 is true d. Both statements are not true
4. The property regime which governs Chris and Dessary is:
a. Absolute community of property c. Complete separation of property
b. Conjugal partnership of gains d. Separation of Church and State
5. How much is Chris’s gross estate?
a. P25,380,000 c. P25,880,000
b. P25,505,000 d. P28,680,000
6. How much is the amount of claims against insolvent persons?
a. P0 c. P375,000
b. P125,000 d. P500,000
7. How much is the amount of vanishing deduction?
a. P3,782,699 c. P3,974,699
b. P4,105,017 d. P3,982,188
8. How much is the share of the surviving spouse?
a. P9,302,500 c. P9,062,500
b. P9,915,000 d. P9,577,500
9. How much is the special deduction?
a. P6,000,000 c. P12,000,000
b. P11,000,000 d. P15,000,000
10. How much is the estate tax due?
a. P98,718 c. P118,968
b. P104,532 d. P135,468
11. When is the deadline for the filing of the estate return in relation to Chris’s death?
a. December 31, 2022 c. August 5, 2023
b. February 5, 3023 d. August 5, 2024

Mr. J. Chavez died leaving the following properties

Rest house in Cebu, acquired before marriage P6,000,000
Income from rest house in Cebu P600,000
Condominium in Davao, brought to marriage by wife P3,600,000
Income from Condominium in Davao P360,000
Town house in Quezon City, acquired during marriage P10,500,000
Income from town house in Quezon City P1,050,000
Car, inherited by wife during marriage (the decedent provided in his will that
it shall form part of the common properties of the spouses) P1,300,000
Jewelry, acquired during marriage for exclusive use of the wife P200,000
12. How much is the conjugal properties under Conjugal Partnership of Gains?
a. P12,510,000 c. P22,310,000
b. P18,510,000 d. P23,610,000
13. How much is the gross estate under Conjugal Partnership of Gains?
a. P12,510,000 c. P22,310,000
b. P18,510,000 d. P23,610,000
14. How much is the community properties under Absolute Community of Property?
a. P12,510,000 c. P22,310,000
b. P18,510,000 d. P23,610,000
15. How much is the gross estate under Absolute Community of Property?
a. P12,510,000 c. P22,310,000
b. P18,510,000 d. P23,610,000

Mr. Pim Manaw, resident decedent, married, died, leaving the following properties:
Real and personal properties acquired during the marriage P3,000,000
House and lot inherited from his father one year and 3 months before he died
(fair market value when inherited, P1,500,000) used as the decedent's
family home P2,000,000
Car purchased with cash received as gift from his mother during
the year he died P500,000
Cash (inclusive of P500,000 received as inheritance from the father) P1,500,000

The following obligations and expenses were also made available:

Claims against conjugal properties P600,000
Unpaid mortgage on the inherited house and lot
(original mortgage was for P600,000) P100,000
16. How much is the total Vanishing deduction for estate tax purposes?
a. P1,000,000 c. P1,530,000
b. P1,080,000 d. nil

A married, nonresident citizen decedent has the following common properties, obligations, and expenses:
Real property, Philippines P40,000,000
Real property, USA P50,000,000
Funeral expenses P700,000
Judicial expenses P800,000
Indebtedness P3,000,000
Unpaid taxes P1,000,000
Unpaid medical expenses P2,000,000
The real property in the Philippines includes the family home valued at P15,000,000.
17. How much is the taxable net estate?
a. P26,000,000 c. P30,500,000
b. P28,000,000 d. P33,000,000

Mr. Pim Musay, Filipino and married, died in 2023, leaving his estate in favor of his surviving spouse. The following
information were made available:

Real property in Quezon City, acquired during marriage. Said property is supported by a barangay certification that the
spouses resided in this property at the time of Mr. Musay's death. The fair market value of this property as per latest tax
declaration is P15,000,000 while the zonal valuation as of the time death is P 20,000,000. Said real property was held as a
mortgage in a loan applied by the spouses. As of the time of death, the outstanding balance of the mortgage payable
amounted to P5,000,000.

Real property in Batangas, inherited by Mr. Musay during marriage, two and half years ago, from his late father. The fair
market value per tax declaration as of his death is P8,000,000 while the zonal valuation is P12,000,000. Said property was
previously taxed at a value of P10,000,00 when Mr. Musay inherited the property from his father.

Real property in Cavite, donated to Mrs. Musay, 10 years ago (before marriage) by his parents- in-law. The fair market
value as per latest tax declaration as of the time of Mr. Musay's death is P3,000,00 while the zonal valuation is
P4,000,000.
Other exclusive properties of Mr. Musay P1,000,000; Other properties of Mr. and Mrs. Musay P3,000,000. Funeral
expenses incurred by the estate during the wake and burial of Mr. Musay amounted to P1,900,000.
18. How much is the correct amount of gross estate?
a. P28,500,000 c. P30,000,000
b. P32,500,000 d. P40,000,000
19. How much is the correct amount of ordinary deductions?
a. P5,000,000 c. P12,000,000
b. P10,250,000 d. P8,500,000
20. How much is the net taxable estate?
a. P3,750,000 c. P29,750,000
b. P13,750,000 d. P0
21. How much is the estate tax payable?
a. P225,000 c. P1,785,000
b. P825,000 d. P0

The decedent is a married man with a surviving spouse with the following data:
Conjugal real properties P6,000,000
Conjugal family house P1,000,000
Exclusive family lot P400,000
Other exclusive properties P4,500,000
Conjugal ordinary deductions P1,500,000
Exclusive ordinary deductions P500,000
22. The taxable net estate is
a. P9,900,000 c. P3,500,000
b. P3,750,000 d. P1,250,000
23. How much is the estate tax payable?
a. P594,000 c. P210,000
b. P225,000 d. P75,000

A decedent died leaving a family home composed of the following: Conjugal house worth P8,000,000, and the land which
he exclusively owned valued at P4,000,000. He also owns a vacation house in Baguio worth P7,000,000.
24. The deductible amount of family home is
a. P8,000,000 c. P12,000,000
b. P10,000,000 d. P19,000,000
25. Based on the preceding number, if the house is also an exclusive property, how much is the deductible family home
allowance?
a. P8,000,000 c. P12,000,000
b. P10,000,000 d. P19,000,000
 Saint Ferdinand College
College of Accountancy
Taxation Review

Name: _______________________________________ Score: ____________

Course and Year: _______________________________ Date: _____________

Finals Drill __ - Estate Tax (Married)

INSTRUCTIONS: Write your final answer on the answer sheet provided below. STRICTLY NO
ERASURES.
1. 6. 11. 16. 21.
2. 7. 12. 17. 22.
3. 8. 13. 18. 23.
4. 9. 14. 19. 24.
5. 10. 15. 20. 25.

Items 1-2.
J. Cruz, Filipino, married, died testate on January 10, 2018. Records show the following assets
and deductions on the date of death:
Condominium unit in Makati (family home) 40,000,000
Apartment in Hong Kong 300,000
Y Corporation shares (domestic shares), exclusive 250,000
Note receivable from insolvent debtor residing in Manila 60,000
Note receivable from insolvent debtor residing in Hong Kong 40,000

Deductions claimed:
Cost of cemetery lot 35,000
Expenses of internment 25,000
Note payable, contracted 2017, not notarized 30,000
Note payable, contracted 2016, notarized, paid on Jan. 22, 2018 100,000
Note payable, contracted 2016, notarized, paid on Jan. 4, 2018 50,000
Mortgage on condominium unit in Makati 100,000
Mortgage on apartment in Hong Kong 50,000
Legacy of Y shares to J. Cruz's brother 40,000
Legacy of Y shares to Municipality of Orani, Bataan for schoolhouse 100,000
Legacy of Y shares to a social welfare organization which uses 35% of
bequests/gifts it receives to cover administration costs 30,000
1. Determine the gross estate of J. Cruz.
a. P40,300,000
b. P40,250,000
c. P40,350,000
d. None of the above.
2. Determine the net estate of J. Cruz subject to the estate tax.
a. P40,050,000
b. P 5,175,000
c. P 5,145,000
d. None of the above.

Items 3-7
The decedent is a married man with a surviving spouse with the following data died on February
1, 2021:
Conjugal real personal properties (excluding land
valued at P200,000 transferred inter vivos to a son) P10,000,000
Conjugal personal properties (including P800,000 bank
deposit which was withdrawn and subjected to 6% final
withholding tax) 4,800,000
Exclusive family home 30,000,000
Conjugal ordinary deductions claimed (including P500,000
funeral expenses but excluding P300,000 judicial expenses) 2,500,000

3. Using BIR From No. 1801 what amount shall be reflected in Line 34 page 2 (Gross estate)
a. P45,000,000
b. P44,800,000.
c. P44,000,000.
d. P21,000,000.
4. Using BIR From No. 1801 what amount shall be reflected in Line 35 page 2 (Ordinary
deductions)
a. P2,800,000
b. P2,500,000
c. P2,000,000
d. P1,700,000
5. Using BIR From No. 1801 what amount shall be reflected in Line 37D page 2 (Total special
deductions)
a. P30,000,000
b. P15,000,000
 c. P10,000,000
d. P1,000,000
6. Using BIR From No. 1801 what amount shall be reflected in Line 40 page 2 (Net taxable
estate)
a.P31,500,000
b. P27,500,000
c. P27,000,000
d. P21,000,000
7. Using BIR From No. 1801 what amount shall be reflected in Line 18 page 1 (Estate tax due)
a. P1,890,000
b. P1,632,000
c. P1,620,000
d. P1,260,000

Items 8-10
Tom Cruz. Filipino, married (in 1990), died on April 22, 2018, leaving the following assets and
expenses:

Assets:
Farm Pampanga P 1,800,000
House and lot Makati (Family home) 1,350,000
Investment, partnership 400,000
Personal properties 160,000
Cash in bank 200,000
Apartment, Quezon City, donated to Tom Cruz by his parents in 2011 7,000,000

Expenses:
Funeral expense 130,000
Unpaid mortgage in farm 140,000
Unpaid mortgages apartment 100,000
Unpaid income tax for 2017 24,000
Medical expenses in 2018 75,000
Support allowances given to the widow during the settlement
of the estate 30,000

8. Compute the gross estate

a. P10,910,000
b. P10,710,000
c. P 9,110,000
d. None of the above
9. Compute the total ordinary deductions
a. P499,000
b. P264,000
c. P939,000
d. None of the above
10. Compute the net estate subject to estate tax
a. P3,098,500
b. P 264,000
c. P 939,000
d. None of the above

Items 11-15
The decedent is a married man with a surviving spouse under conjugal partnership of gains with
the following data died on February 1, 2021:

Real properties received by the decedent as inheritance during the P 10,000,000

marriage (including land valued at P200,000 transferred inter vivos
by the decedent to a son).
Personal properties acquired during the marriage using common fund 6,000,000
(including car valued at P1,800,00 acquired for the exclusive use of
the surviving spouse).
Personal properties received as gift by the surviving spouse during 5,000,000
the marriage.
Exclusive family home 5,200,000
Conjugal deductions claimed (including funeral expenses amounting 2,600,000
to P200,000; judicial expenses amounting to P300,000 and medical
expenses amounting to P100,000).
Exclusive deductions claimed (including unpaid mortgage of 2,500,000
P500,000 on the personal properties received as gift by the surviving
spouse during marriage).

11. Using BIR From No. 1801 what amount shall be reflected in Line 34 page 2 (Gross estate)
a. P26,200,000
b. P21,200,000
c. P21,000,000
d. P16,000,000
12. Using BIR From No. 1801 what amount shall be reflected in Line 35 page 2 (Ordinary
deductions)
a. P5,100,000
b. P5,000,000
c. P4600,000
d. P4,000,000
13. Using BIR From No. 1801 what amount shall be reflected in Line 37D page 2 (Total special
deductions)
a. P10,200,000
b. P10,000,000
c. P7,600,000
d. P5,200,000
14. Using BIR From No. 1801 what amount shall be reflected in Line 40 page 2 (Net taxable
estate)
a. P10,900,000
b. P8,800,000
c. P 6,800,000
d. P4,800,000
15. Using BIR From No. 1801 what amount shall be reflected in Line 18 page 1 (Estate tax due)
a. P654,000
b. P528,000
c. P408,000
d. P288,000

Items 16-19
H, Filipino, married to W in 1998, died on August 13, 2018. The estate reported the following
assets and deductions:
Conjugal properties:
Fishpond. Pampanga P 2,000,000
Apartment house, Quezon City 1,000,000
Cash in bank 800,000
Family home 30,000,000

Exclusive Properties of H:
Land, inherited from father who died on August 13, 2016. Value
of land when inherited was P210,000 The land had a mortgage of
P30,000 when inherited, of which P10,000 was paid by H before he died. 400,000
Land, donated on February 14, 2014 by H’s mother who died on
November 2, 2018. Value of land when donated was P500,0000. 600,000

Exclusive Properties of W:
Farm in Leyte, acquired during marriage 3,000,000

Deductions Claimed:
Funeral expenses (actual) 250,000
Fire loss, apartment house (occurred 5 months after death) 80,000
Bad debt (unpaid receivable from an insolvent debtor) 100,000
Mortgage on inherited land 30,000
Vanishing deduction on inherited land 75,000
Vanishing deduction on donated land 90,000
Standard deduction 1,000,000

16. Determine the gross estate of H.

a. P34,900,000
b. P34,800,000
c. P35,000,000
d. None of the above.
17. What is total amount of proper deductions chargeable against the conjugal properties of the
estate?
a. P180,000
b. P200,000
c. P458,510
d. None of the above.
18. What is total amount of proper deductions chargeable against the exclusive properties of the
estate?
a. P195,000
b. P185,000
c. P 20,000
d. None of the above.
19. What is the net taxable estate?
a. P2,581,490
b. P2,580,747
c. P2,601,341
d. None of the above.

Items 20-21
Mr. Eks died on December 1, 2021 leaving the following properties:
Farmland in Baguio, brought to marriage by wife 5,400,000
Income from farmland in Baguio 500,000
Apartment units in Quezon City, acquired during marriage 4,000,000
Rental income from apartment units in Quezon City 80,000
Rest house in Tagaytay, acquired before marriage 5,000,000
Income from rest house in Tagaytay 400,000
Car, inherited by wife during marriage 1,950,000
Jewelry, acquired during marriage for exclusive use
and using the exclusive money of the wife 300,000
House and lot inherited from his father on September 1, 2020
(fair market value when inherited, P3,000,000), used as family home 4,000,000
Unpaid mortgage on the inherited
house and lot (original mortgage, P1,200,000) 200,000
Car received as gift from his mother in 2021 750,000
Deductible losses, indebtedness, taxes 1,500,000
20. How much is the estate tax due under Conjugal Partnership of Gains (CPG)?
a. P367,771
b. P427,771
c. P232,171
d. P127,771
21. How much is the estate tax due under Absolute Community of Property (ACP)?
a. P145,110
b. P570,510
c. P385,110
d. P445,110

Items 22-25
A married resident decedent, under conjugal partnership of gains, left the following:
Investments P4,000,000
Vehicles 6,000,000
Exclusive family home (assessed value, P10,000,000, zonal value, 7,000,000)
Conjugal piece of land (cost, P12,000,000; fair market value, P15,000,000)
Conjugal deductible losses, indebtedness, taxes, etc. 500,000
Medical expenses (including P300,000 unpaid bill) 700,000

22. How much is the gross estate?

a. P35,000,000
b. P32,000,000
c. P29,000,000
d. None of the choices
23. How much is the deductible medical expenses?
a. P700,000
b. P500,000
c. P400,000
d. None
24. How much is the total special deductions?
a. P15,000,000
b. P10,000,000
c. P 7,000,000
d. P 5,000,000
25. How much is the net taxable estate?
a. P18,800,000
b. P14,900,000
c. P 7,250,000
d. P 6,550,000
 St Ferdinand College Inc.
COLLEGE OF ACCOUNTANCY
City Of Ilagan Isabela

TAX REVIEW

Name: _________________________________________________ Score:____________________

Course&Year:____________________________________________ Date: ____________________

DRILL – ESTATE TAX

Write your answers on the box provided. USE CAPITAL LETTERS. Strictly no ALTERATIONS AND
ERASURES.
1. 6. 11. 16. 21.
2. 7. 12. 17. 22.
3. 8. 13. 18. 23.
4. 9. 14. 19. 24.
5. 10. 15. 20. 25

Mr. Hades Riego died leaving the following properties:

Rest house in Alegria, acquired before marriage P6,000,000

Income from rest house in Alegria 600,000
Condominium in Aklan, brought to marriage by wife 3,600,000
Income from condominium in Aklan 360,000
Town house in Makati, acquired during marriage 10,500,000
Income from town house in Makati 1,050,000
Car, inherited by wife during marriage (the decedent provided in his will that it shall form part of 1,300,000
the common properties of the spouses)
Jewelry, acquired during marriage for exclusive use of the wife 200,000

1. How much is the conjugal properties under Conjugal Partnership of Gains?

a. P12,510,000 c. P22,310,000
b. P18,510,000 d. P23,610,000
2. How much is the gross estate under Conjugal Partnership of Gains?
a. P12,510,000 c. P22,310,000
b. P18,510,000 d. P23,610,000
3. How much is the community properties under Absolute Community of Property?
a. P12,510,000 c. P22,310,000
b. P18,510,000 d. P23,610,000
4. How much is the gross estate under Absolute Community of Properties?
a. P12,510,000 c. P22,310,000
b. P18,510,000 d. P23,610,000
Ali, Filipino, widower, died leaving the following:

 Real properties P4,000,000

 Family home 1,200,000
 Personal properties 2,000,000
 Paid medical expense 600,000
 Allowable deductions 800,000
5. Determine the net estate subject to tax
a. 100,000 c. 300,000
b. 200,000 d. 400,000
6. Determine the net distributable estate
a. 7, 388,000 c. 7,400,000
b. 6,388,000 d. 6,400,000

Romer, Filipino, married, died in 2018 leaving the following:

 Real property – conjugal P4,000,000
 Real property – exclusive (A) 2,500,000
 Family home – exclusive (A) 1,200,000
 Unpaid medical expenses 600,000
 Allowable ordinary deductions – conjugal 1,400,000

7. Determine the net estate subject to tax:

a. ₱2,500,000 c. ₱3,400,000
b. (₱1,200,000) d. None of the above.

8. Determine the net distributable estate:

a. ₱4,210,000 c. ₱4,000,000
b. ₱4,400,000 d. None of the above.

A decedent is a citizen and resident of the Philippines:

 Gross estate P10,000,000

 Claims against the estate 3,000,000

9. How much is the net taxable estate if the decedent was single?
a. P7,000,000 c. P6,000,000
b. P9,000,000 d. P2,000,000

Mr. Aris, a resident and citizen of the Philippines, died on October 10, 2020, leaving the following properties, rights,
obligations and charges:
Conjugal properties (including a family home of P13,000,000 and amount receivable P16,000,00
under RA 4917 of P200,000)
Exclusive properties (including cash of P500,000 inherited 4 ½ years ago) 4,000,000

Medical expenses, unpaid January 2013 350,000

Judicial Expenses 500,000
Other Obligations 100,000

10. The deduction for family home:

a. 13,000,000 c. 7,500,000
b. 10,000,000 d. 6,500,000
11. In number the vanishing deduction:
a. P467,500 c. P191,500
b. P99,500 d. P145,500

The decedent is a married man with a surviving spouse under conjugal partnership of gains with the following data
died on February 1, 2021:

 Real properties received by decedent as inheritance during the marriage (including land valued P10,000,000
at P200,000 transferred inter vivos by decedent to a son)
 Personal properties acquired during the marriage using common fund (including car valued at 6,000,000
P1,800,000 acquired for the exclusive use of the surviving spouse)

 Personal properties received as gift by the surviving spouse during the marriage 5,000,000

 Exclusive family home 5,200,000

 Conjugal deductions claimed (including funeral expenses amounting to P200,000; judicial 2,600,000
expenses amounting to P300,000 and medical expenses amounting to P100,000)

 Exclusive deductions claimed (including unpaid mortgage of P500,000 on the personal 2,500,000
properties received as gift by the surviving spouse during the marriage)

12. Using BIR From No. 1801 what amount shall be reflected in Line 34 page 2 (Gross estate)
a. P26,200,000. c. P21,200,000.
b. P21,000,000. d. P16,000,000.
13. Using BIR From No. 1801 what amount shall be reflected in Line 35 page 2 (Ordinary deductions)
a. P5,100,000 b. P5,000,000
b. P4,600,000 d. P4,000,000
14. Using BIR From No. 1801 what amount shall be reflected in Line 37D page 2 (Total special deductions)
a. P10,200,000 c. P10,000,000
b. P7,600,000 d. P5,200,000
15. Using BIR From No. 1801 what amount shall be reflected in Line 40 page 2 (Net taxable estate)
a. P10,900,000 c. P 8,800,000
b. P6,800,000 d. P4,800,000
16. Using BIR From No. 1801 what amount shall be reflected in Line 18 page 1 (Estate
tax due)
a. P654,000 c. P528,000
b. P408,000 d. P288,000

The decedent is a resident alien, married, with the following data:

Conjugal properties
Real and personal properties, outside the Philippines P14,000,000

Family home, Philippines 30,000,000

Exclusive properties, Philippines 5,000,000

Conjugal deductions 2,000,000

17. The total gross estate is:

a. P49,000,000 c. P34,000,000
b. P35,000,000 d. P20,000,000
18. The special deductions are:
a. P40,000,000 c. P30,000,000
b. P15,000,000 d. P10,000,000
19. The taxable net estate is:
a. P47,000,000 c. P37,000,000
b. P32,000,000 d. P11,000,000
20. The estate tax due is:
a. P2,820,000
b. P1,920,000
c. P2,220,000
d. P 660,000

The following information were from the estate of a married citizen decedent:

Property:
Family home 12,000,000
Domestic shares inherited 6 years ago during marriage 6,000,000
Bank deposit, representing dividend earned during marriage 1,000,000
Jewelry received as gift 8 years ago during marriage 1,000,000
Expenses:
Claim against the estate 4,000,000
Funeral Expenses 1,000,000
Judicial Expenses 500,000

21. Under conjugal partnership of gains, gross conjugal property is

a. P13,000,000 c. P8,000,000
b. P12,000,000 d. P6,000,000
22. The ½ share of the surviving spouse is
a. P6,000,000 c. P5,000,000
b. 4,500,000 d. P3,000,000

23. The net taxable estate of the decedent is

a. P600,000
b. P575,000
c. P500,000
d. P475,000
24. A decedent died leaving a family home composed of the following: Conjugal house worth P8,000,000, and the
land which he exclusively owned valued at P4,000,000. He also owns a vacation house in Baguio worth
P7,000,000. The deductible amount of family home is:
a. P8,000,000
b. P10,000,000
c. P12,000,000
d. P19,000,000
25. Based on the preceding number, if the house is also an exclusive property, how much is the deductible family
home allowance?
a. P8,000,000
b. P10,000,000
c. P12,000,000
d. P19,000,000