ACTIVITY/EVALUATION: TRUE OR FALSE

Determine whether the following statements are true or false.

1. Only corporate taxpayers may use the fiscal accounting year.

2. The interest on unpaid taxes is computed based on the basic tax due and surcharge penalty.

3. The crop year basis is an accounting period.

4. The accounting period of a deceased taxpayer shall be terminated on December 31 of the year of his/her death.

5. The excess mortgage is considered as a payment on the date of sale when using the instalment method.

6. The use of different methods for different businesses of the same taxpayer is permitted by law.

7. When using the percentage of completion method, the gross income to be reported for income tax purposes is the computed amount of construction revenue earned during the year.

8. Payments made covering future expenses are deductible on the year of outflow.

9. The 25% ratio rule must be satisfied in order for a dealer of personal property to use the instalment method.

10. Withheld taxes on income payments are creditable against the income tax due of the payee.

Identify the terminologies best described by the following statements.

1. The tax scheme for most passive income

2. The online filing and payment of taxes in the Philippines

3. This is the sum of all consideration receivable by the seller in an instalment sale

4. This is the sum of all consideration's receivable by the seller on the year of sale in an instalment sale

5. A full accounting period not ending with December 31