Accounting Periods

Accounting Periods
1. Gross income is reported partially in each taxable year in proportion to collections made
in such period as it bears to the total contract price refer to
Installment sales method
2. A short accounting period may arise under the following scenarios, except one. Select
the exception?
When an individual taxpayer changes his accounting period to a fiscal year.
3. The following accounts relates to book of Zeus, a dealer of household appliances:
How much taxable gain is to be reported in 2017?

P 800,000
4. XYZ Corporation changed its accounting period from a calendar year to a fiscal year
ending every March 31. XYZ Corporation should file its annual income tax return not
later than
July 15
5. On October 1, 2017, Vicky sold one of her business establishment (ordinary asset). The
land and building cost Vicky P10,000,000 and was sold for P14,000,000. P500,000 was
paid upon the signing of the contract. The establishment is subject to P11,000,000 real
mortgage and is to be assumed by the buyer. Compute the amount of taxable gain to be
reported in 2017.
P4,000,000
6. A corporation may change its taxable year to calendar or fiscal year in filing its annual
income tax return, provided:
It seeks prior BIR approval of its proposed change in accounting period.
7. On December 31, 2016, Carlo received P100,000 notes due April 1, 2017 as payment
for his business advisory services from his client. The notes can be discounted at
various bank at P96,000. Under deferred payment method, how much is taxable in 2016
and in 2017?
P100,000; P0
8. Mr. Mario was alleged to have under-declared his income during the previous year. An
examiner conducted an evaluation of Mr. Mario based on his statement of assets and
liabilities. The following information were available:
*40% was discovered unsupported and apparently fictitious
In the same period, Mr. Mario donated a parcel of land out of its declared asset with a
declared value of P200,000. Mr. Mario also presented a lists of his personal and family
expenditures aggregating P150,000 during that year. Using the net worth method, what
is Mr. Mario's possible income?
P220,000
9. XYZ Corporation changed its accounting period from a calendar year to a fiscal year
ending every March 31. XYZ Corporation should file its annual income tax return not
later than
July 15
10. Mac Joe, a resident citizen, changed its accounting period for internal reporting purposes
from a calendar year to a fiscal year ending every June 30 after a significant change in
the nature of his business. Mac Joe should file its annual income tax not later than
April 15
11. Which among the following taxpayers may use a fiscal year as its taxable period?
Joint accounts
12. Which is correct? The fiscal accounting period is applicable only to
Any taxpayers who are not individuals.
13. The following accounts relates to book of Zeus, a dealer of household appliances:
How much taxable gain is to be reported in 2017?

P 800,000
14. Effective February 2017, DEF Corporation changed its accounting period from a fiscal
year ending every January 31 to another fiscal year ending every August 31. Which is
correct?
DEF Corporation should file an adjustment return covering the period of February 1,
2017 to August 31, 2017.
15. Starting August, 2017, ABC Corporation changed its accounting period from a fiscal year
ending every June 30 to the calendar year. Which statement is correct?
ABC Corporation should file an adjustment return on April 15, 2018 covering the period
of July 1, 2017 to December 31, 2017.
16. On July 1, 2017, Eliazar sold a real property for P600,000. 10% down-payment is due
upon signing of the contract of sale. The balance is payable as follows: 15% December
31, 2017; 50% March 31, 2018; 35% July 31, 2018
Since the property is classified as ordinary asset only the gain of P300,000 is subject to
progressive tax. How much of the gain is taxable in 2017?
P300,000
17. Which is incorrect? The calendar year accounting period is applicable to
individual income taxpayers only
18. The following computations were shown by the taxpayer as support of his GAAP income
under the accrual basis:
Determine the income for taxation purposes.

P800,000
19. The fiscal year may be adopted instead of the calendar year as the taxable year if:
None of the foregoing.
20.

Accounting Periods

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Accounting Periods

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Accounting Periods

How much taxable gain is to be reported in 2017?

How much taxable gain is to be reported in 2017?

Determine the income for taxation purposes.

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