1. How does GAAP differ from tax law in the matter of recognizing income?

a. Under GAAP, companies report revenues, expenses and net income. Conversely, tax-basis entities report gross income, deductions, and taxable income.

b. Under GAAP, companies report gross income, deductions, and taxable income. Conversely, tax-basis entities report revenues, expenses and net income.

c. Both a and b

d. None of the above

2. Excises are levied on goods or services that are considered harmful or undesirable, in an attempt to discourage consumption. Taxes based on this rationale are classified as-

a. Fiscal tax

b. Regulatory tax

c. Sumptuary tax

d. Any of the above

3. It refers to the ultimate burden of the tax. It emerges when the tax finally settles or comes to rest on the person who bears it. It, in fact, is the ultimate result of shifting

a. Impact of taxation

b. Incidence of taxation

c. Both a and b

d. Power of taxation

4. All except one are examples of direct taxes.

a. Transfer taxes

b. Property tax

c. Capital gains tax

d. Excise tax on production of certain commodities

5. Which of the following statements is not true?

a. If a taxpayer is acquitted in a criminal violation of the Tax Code, this acquittal does not exonerate him from his civil liability to pay the taxes.

b. A conviction for tax evasion is not a bar for collection of unpaid taxes.

c. A tax assessment is necessary to a criminal prosecution for willful attempt to defeat and evade payment of taxes.

d. Criminal proceedings under the Tax Code are now a mode of collection of internal revenue taxes, fees or charges.

6. Which statement is NOT correct? A revenue bill:

a. Must originate from the House of Representatives and on which same bill the Senate may propose amendments.

b. May originate from the Senate and on which same bill the House of Representatives may propose amendments.

c. May have a House version and a Senate version approved separately, and then consolidated, with both houses approving the consolidation version.

d. May be recommended by the President to Congress.

7. Tax laws, being imposition of burden, shall be strictly construed against:

a. A person who refuses to pay the tax

b. The taxpayer

c. The government

d. Either the taxpayer or the government, depending on the evidence presented

8. Which of the following is NOT an example of an excise tax?

a. Transfer tax

b. Sales tax

c. Real property tax

d. Income tax

9. Estate tax is an example of a:

a. Direct, property, and national tax

b. Direct, excise, and national tax

c. Direct, personal, and national tax

d. Indirect, property, and national tax

10. For the purpose of computing the taxable income and the income tax, it shall include all business expenses directly incurred to produce the merchandise to bring them to their present location and use.

a. Cost of goods sold

b. Operating expenses

c. Both a and b

d. Cost