Question and Answer

Samples and Techniques

Donors tax distinguished from estate tax:

1st distinction: The rates of donors tax are lower than those for
the estate tax.
2nd distinction: The donors tax exemption is P100,000 while the
estate tax is P200,000.
Both distinctions are correct.
Both distinctions are wrong.
1st distinction is correct while 2nd distinction is wrong.
1st distinction is wrong while 2nd distinction is correct.
None of the above

Statement 1: All gifts on the same date pay one donors tax only.
Statement 2: A donation to a legitimate child on account of marriage
when the property donated was already delivered, will not pay the
donors tax if the marriage did not actually take place.

Both statements are true

Both statements are false
1st statement is false; while 2nd statement is true
1st statement is true; while 2nd statement is false
None of the above

Which is considered wrong: The donors

tax is:
Computed on the basis of the net gifts of a calendar year;
Becomes proportionately bigger on later donations
Computed and paid within 30 days from the date of
donation.
Computed separately for each spouse in case of a joint
donation.
All of the above

A donation on account of marriage

will give the donor a deduction
from the gross gift made if:
The donee is a stranger.
The donee is not a stranger.
The donee is anybody
The donee is a legitimate child
All of the above

Who of the following is a stranger

under the donors tax law?
A child of a brother
A grandchild
A second cousin
A grand uncle
None of the above

Mr Lorenzon Cortes made donations to June Cortes and Ana

Dinio, son and daughter-in-law, on account of marriage, a real
property with a fair market value of P1,500,000, but subject to
a mortgage of P300,000 assumed by the donees. The donors tax
is:
P77,500
P84,950
P199,400
P185,950
None of the above

Statement 1 : Tax credit for donors tax paid to a foreign country is

allowed only if the donor is a citizen or resident of the PHL.
Statement 2: There can be a donors tax paid to a foreign country even
if the citizen or resident donor had no donation of property in the PHL.

Both statements are true

Both statements are false
Only the 1st statement is true
Only the 2nd statement is true
None of the above

B Co. of property in a foreign country with a FMV of P300,000.

Foreign donors tax of P70,000 was paid. There was a donation
earlier in the year of P150,000 cash to Mr C, a legitimate child.
How much was the donors tax on the donation to B Co. after
foreign donors tax credit?
P20,000.00
P29,333.33
P35,333.33
P32,677/67
None of the above

In computing the donors tax on a subsequent

donation, the donor must also consider:
All prior net gifts during his lifetime.
All prior net gifts during the calendar year.
The present and the immediately preceding donations.
Only the present donation.
None of the above

I. A donation on which the donors tax was not paid is not a

valid donation.
II. Title to the donated real property cannot be transferred to
the donee in the Register of Deeds unless the donors tax on the
donation had been paid.
Both I and II are true
Both I and II are false
I is true; II is false
I is false; II is true
None of the above

the donor may be required to pay the deficiency although he

does not possess or own the property anymore.
II. The government is not bound by any agreement between the
donor and donee that the donee shall pay the tax on the the
donation.
Only I is true
Only II is true
Both statements are true
Both statements are false
None of the above

An operating loss will result if gross

profit is less than
Cost of goods sold
Operating expenses
Purchases
Cost of goods sold plus operating expenses
None of the above

The primary operating cash

outflows are the following except,
Cash payments for purchase of merchandise
Payments for operating expenses
Income tax payments
Long-term debt payments
None of the above

The inventory cost flow assumption

where the oldest inventory items is
likely to remain on the balance sheet is
Last in first out (LIFO)
First in first out (FIFO)
Average cost
Specific identification cost
None of the above

The two methods of reporting cash

flows are:
Single and multiple methods
Direct and indirect methods
Operating and financing methods
Financing and investing methods
None of the above

Which of the following is a cash out

flow from financing activity?
Payment of current liabilities
Purchase of plant and equipment
Withdrawal of cash for personal use of owner
Proceeds of long-term loans obtained from a bank
None of the above

Which of the following cash flows is an

example of an operating activity?
Collection of accounts receivable
Sale of a property and equipment used in business
Repayment of a long-term debt
Purchase of land
None of the above

The owner invested P100,000 cash in his

new business. This will be reported in
the cash flow statement under the,
Operating activity
Financing activity
Investing activity
Operating and investing activities
None of the above

The inventory cost flow assumption where the

cost of most recent purchases are likely to
remain in the balance sheet is,
Average cost method
Last in first out (FIFO)
First in first out (FIFO)
Specific identification method
None of the above

A company has a gross profit of P45,000

which is 30% of net sales. How much
was the net sales?
P450,000
P300,000
P150,000
P135,000
None of the above

Which of the following is a cash out

flow from financing activity?
Payment of current liabilities
Purchase of plant and equipment
Withdrawal of cash for personal use of owner
Proceeds of long-term loans obtained from a bank
None of the above

A company has a net profit of P60,000 representing

10% of net sales. If gross profit was P240,000, how
much was the cost of goods sold?
P300,000
P360,000
P840,000
P180,000
Cannot not be computed due to insufficient information.

A company has net sales of P80,000 cost

of sales of P48,000 and net profit of
P8,000. What was the gross profit rate?
60%
30%
40%
10%
None of the above

A company has net sales of P80,000 cost of

sales of P48,000 and net profit of P8,000.
What was the operating expenses?
P56,000
P32,000
P24,000
P18,000
None of the above