ACC318 TMA Questions

ACC318 List of Questions

Q1 Nigerian Adjusted profit in special businesses is derived as :
Adjusted Profit Ratio x Nigerian Income
Adjusted profit Ratio x Global Income
Ratio of the Nigerian Income to the Global Income
Nigerian Profit Over Global adjusted profit

Q2 Calculate the Nigerian Income from Fast Airline in 2016 tax year with respect to the following Income from passengers from Kenya to Nigeria ?6M, Income from cargo from New york to Nigeria ?10M,Income from passengers from Nigeria to Gatwick ?18M, Income from Cargo from Nigeria to Ghana ?2M
�?�16 Million
�?�18 Million
�?�20 Million
�?�36 Million

Q3 For any company that wants to take advantage of special business tax provison a formal application to be assessed on the basis of the two ratio should be made not later than———- years from the year of assesssment concerned
Three
Six
Four
Two

Q4 Special businesses in Nigeria constitute the following EXCEPT:
Insurance business
Shipping business
Unit trust schemes
Free trade zone enterprises

Q5 The taxation of transportation and telecommunication businesses will arise on the:
Normal basis
Actual year basis
Preceding year basis
Best of judgement basis

Q6 Which of the following income is taxable in a free trade zone:
Income of a company established with an export processing zone and 50 percent production of such company is for export
Incomes in respect of goods exported from Nigeria and the proceeds are repatritated back and used exclusively for raw materials
dividends recived from investments is wholly export oriented businesses
Incomes of a company whose supplies are exclusively inputs to the manufacturing of products for export.

Q7 The following expenses are not allowable in a free trade zone EXCEPT
General provision for bad and doubtful debts
Depreciation expenses
Legal expenses for renewal of a long lease
Levy paid to National Science and Technology fund (NSTF)

Q8 Companies operating in a free trade zone are entitled to the following allowances EXCEPT:
Initial allowance
Investment allowance
Annual allowance
Balancing allowance

Q9 In Nigeria, Companies in free trade zones can be assessed to tax based on :
Preceding year basis
Best of Judgement assessment
Actual year basis
Accounting year basis

Q10 Allowance granted to a company in a free trade zone which has incurred an expeniture in its qualifying building and plant equipment is:
100% Investment allowance
100% Investment allowance
75% Investment allowance
50% capital allowance

Q11 Osasu Nig . Ltd has been in business for some time now. In 2013, turnover was ?475,000, Adjusted profit 390,000, capital allowance ?250,000. What is the taxable profit?
�?�225,000
�?�250,000
�?�85,000
�?�140,000

Q12 A small company is a company whose turnover does ————
Exceed �?�2,000,000
Exceed �?�1,000,000
Not exceed �?�1,000,000
Not exceed �?�2,000,000

Q13 The tax relief for small companies or business or trade is applicable for the first ——– of the business or trade
4 years
3 years
5 years
6 years

Q14 Minimum tax computation is not applicable to the following company EXCEPT:
A company carrying on manufacturing business
A company carrying on agricultural trade or business
A company with at least 25% imported equity capital
A company within its first four calender years of commencement of trade

Q15 The applicable rate tax for small company is
0.1
0.2
0.3
0.35

Q16 The dealing with the estate of a deceased person , that is collecting assets, paying debts and distributing any surplus among the persons entitled to is:
Settlement
Trusteeship
Executorship
Administration

Q17 The period between the date of death and the date the executor is able to set up a trust or distribute the residue of the estate is known as :
Trustee’s period
Executor’s period
Administrative period
Trust period

Q18 The assessment of income from settlements, trust and estates is governed by the provisions of :
Personal Income Tax Act (PITA)
Companies Income Tax Act (CITA)
Trusts and estates Tax Act (TETA)
Capital gains Tax ACT (CGTA)

Q19 Example of a beneficiary in an estate is:
A testator
A Trustee
An executor
A legatee

Q20 Where a person dies and leaves no valid will, the person has died
Testate
Intestate
a testator
a trustee

Q21 The Nigerian tax law permits companies to only use ——-
Carry forward loss Relief
Effective loss Relief
current year loss Relief
Loss Relief

Q22 The current year loss would be relieved from —— of income accruing to the tax payer
One source
All sources
Same source
Current year source

Q23 Loss incurred from———– business or trade is not allowed to be relieved on current year basis
Agricultural
Oil & Gas
Property letting
Insurance

Q24 Companies other than —— can carry forward losses indefinitely
Manufacturing companies
Agricultural companies
Insurance companies
oil companies

Q25 ________ loss relief is not available to coporate entities
Current year
Effective
Carry forward
Residual

Q26 The amount left in the account for tax purposes until the asset is finally disposed is :
Remedial value
Residual value
Retained earning
Book value

Q27 An allowance that can be prorated or apportioned if there is an elemetn of private use is :
Capital allowance
Initial allowance
Annual allowance
Investment allowance

Q28 The Tax Written Down value (TWDV) of an asset is :
Selling price minus the cost of the asset
Cost minus the initial allowance of an asset
Cost minus the annual allowance of an asset
Cost minus initial allowance and annual allowance of the asset

Q29 Given that an asset with a tax written down value of 250,000 is sold for ?480,000. Compute the balancing allowance or charge
�?�230,000 (Balancing allowance)
�?�480,000 (Balancing charge)
�?�480,000 (Balancing allowance)
�?�230,000 ( Balancing charge)

Q30 _______ allowance is computed on a striaght line basis
Investment
Initial
Annual
Capital allowance

Q31 For an on – going or subsisting business ——— is used in computing the assessable profit
The actual year basis
The preceding year basis
The pelnultimate year basis
The ultimate year basis

Q32 The year the business of the company ceased to exist is known for tax purposes as :
Real year
Penultimate year
Ultimate year
Actual year

Q33 Whenever there is a change in accounting date who has the right of election in a company?
The tax authority
The company
The tax payer
The agent

Q34 Where two basis periods over lap, the period common to both shall be deemed to fall in the basis period ending at the —–
Later date
Same date
ending date
earlier date

Q35 Over lapping of basis periods occurs mostly under the ——- rule
Cessation
Commencement
Normal
Abnormal

Q36 Amount of reserve made out of profits for research development fo a company is subject to a ceiling ( ie maximum value) of —– of the total profit of the company before the deduction is made
0.2
0.1
0.15
0.05

Q37 Which of the following statement is true of donations that are allowable
Donations should not be of a capital nature
Maximum allowable donation is limited to 20% of the total profit
Donations must not be made out of profit
Donations must be made to aproved traditional council only

Q38 With holding tax rate on dividends , interest or royalties due to non – resident companies are assesssed at :
0.2
0.15
0.05
0.1

Q39 The relevant tax authority administering company taxation is ——
National Inland Revenue Service
State Inland Revenue Service
Joint Tax Board
Federal Inland Revenue Service

Q40 The legal basis for assesing resident companies to tax is the :
Income tax Act CAP C 21 LFN 2004
Company Income Tax Act, CAP C 20 LFN 2004
Company Income Tax Act, CAP C 21 LFN 2004
Personal Income Tax Act, CAP C 20 LFN 2004

Q41 When a person pays less than he ought to pay by taking advantage of loopholes in a tax system is ————
Tax planning
Tax avoidance
Tax evasion
Fair taxation

Q42 Which of the following is not a good characteristic of desirable tax?
Equity
High productivity
Neutrality
Regressive nature

Q43 Other problems militating against business taxation in Nigeria include all EXCEPT:
Uniformity of assessment
Problem assessment
Attitudinal problem
Cumbersome process of payment

Q44 Another challenge of business taxation in Nigeria is that of not having ——— tax system
A flexible
A sensitive
A uniform
A fair

Q45 One of the major challenges of business taxation is Nigeria is that of ———— and ———-
Honest tax payers losing faith in the system
Tax evasion and avoidance
The diversity and complexity in human nature
Loss of government revenue and resources

Q46 Most developmental projects or activities are said to have been financed by the revenues generated from taxes in the area of business taxation emanity from ——
Personal Income tax
Value added Tax
Company tax
Tax clearance certificate

Q47   Tax clearance certificate is usually issued by the tax authority to any taxpayer who may have fully paid the assessed tax in the last ——— immediately preceding the current year of assessment.
Three (3) consecutive years
Three years
Five (5) consecutive years
One( 1) year

Q48 An outright dishonest action whereby the tax payer seeks to minimize his tax liabilities through illegal act is known as tax—–
Allowance
Avoidance
Deduction
Evasion

Q49      Under existing personal income Tax Act, transactions for which a tax clearance certificate must be produced include the following except—-
Application for a government loan for industry or business
Registration of motor vehicles
Application for allocation of petroleum products
Application for distributionship

Q50     Which of the criteria listed below is NOT an ideal principle of tax in a modern tax system?
Simple certain and convenient
Unit/ad valorem
Flexible
Administratively efficient

Q51 The following are the core objectives of a modern tax system, EXCEPT
strenghtening coporate governance
Harmonization
Economic regulator
Revenue generation

Q52      ————- was initiated to discourage tax avoidance with the use of heavy capital allowances and reliefs
Minimum tax
Tax evasion
Tax avoidance
None of the above

Q53 The principles of tax that relates to cost of administering tax is known as:
Principles of expenses
Principles of convenience
Principles of economy
Principles of certainty

Q54        The basic principles of taxation that guide tax administration as well as the implementation of the provision of relevant tax laws is known as :
Tax administration
Canon of taxation
Principles of taxation
None of the above

Q55       A good tax system should be ———— in the distribution of tax burden
Acceptable
cashless
popular
Equitable

Q56     The rate of minimum tax was increased to ———- under the personal income Tax (Amendment) Act 2011
0.5% of gross income
0.5% of total income
1% of total income
1% of gross income

Q57        The penalty for ———– offence is that the offender will pay an amount equal to the income tax chargeable on him for the preceding year of assessment
A.      Non �?? compliance with notice
Failure to summit returns
Inappropriate returns
False statements and returns

Q58        Earnings from royalty, trademark , dividend , and rentals are examples of
Earnced income
Unearned income
Business income
Dividend and rental income

Q59        ————– Specifically refers to all incomes that emanates from a trade business, profession, vocation or employment, carried on or exercised by an individual.
A.      Unearned income
B. Earned income
Employment income
Business income

Q60 With respect to development of taxation in Nigeria, the era where the Finance. Miscellaneous ( Taxation provisions ) Decree of 1985 was amended is
A.      Period between 1985 �?? 1990
B. Period between 1980 �?? 1985
C. Period between 1985 �?? 1987
D. Period between 1985 �?? 1988

Q61 When a person pays less than he ought to pay by taking advantage of loopholes in a tax system is ————
Tax planning
Tax avoidance
Tax evasion
Fair taxation

Q62 Which of the following is not a good characteristic of desirable tax?
Equity
High productivity
Neutrality
Regressive nature

Q63 Other problems militating against business taxation in Nigeria include all EXCEPT:
Uniformity of assessment
Problem assessment
Attitudinal problem
Cumbersome process of payment

Q64 Another challenge of business taxation in Nigeria is that of not having ——— tax system
A flexible
A sensitive
A uniform
A fair

Q65 One of the major challenges of business taxation is Nigeria is that of ———— and ———-
Honest tax payers losing faith in the system
Tax evasion and avoidance
The diversity and complexity in human nature
Loss of government revenue and resources

Q66 Most developmental projects or activities are said to have been financed by the revenues generated from taxes in the area of business taxation emanity from ——
Personal Income tax
Value added Tax
Company tax
Tax clearance certificate

Q67   Tax clearance certificate is usually issued by the tax authority to any taxpayer who may have fully paid the assessed tax in the last ——— immediately preceding the current year of assessment.
Three (3) consecutive years
Three years
Five (5) consecutive years
One( 1) year

Q68 An outright dishonest action whereby the tax payer seeks to minimize his tax liabilities through illegal act is known as tax—–
Allowance
Avoidance
Deduction
Evasion

Q69      Under existing personal income Tax Act, transactions for which a tax clearance certificate must be produced include the following except—-
Application for a government loan for industry or business
Registration of motor vehicles
Application for allocation of petroleum products
Application for distributionship

Q70     Which of the criteria listed below is NOT an ideal principle of tax in a modern tax system?
Simple certain and convenient
Unit/ad valorem
Flexible
Administratively efficient

Q71 The following are the core objectives of a modern tax system, EXCEPT
strenghtening coporate governance
Harmonization
Economic regulator
Revenue generation

Q72      ————- was initiated to discourage tax avoidance with the use of heavy capital allowances and reliefs
Minimum tax
Tax evasion
Tax avoidance
None of the above

Q73 The principles of tax that relates to cost of administering tax is known as:
Principles of expenses
Principles of convenience
Principles of economy
Principles of certainty

Q74        The basic principles of taxation that guide tax administration as well as the implementation of the provision of relevant tax laws is known as :
Tax administration
Canon of taxation
Principles of taxation
None of the above

Q75       A good tax system should be ———— in the distribution of tax burden
Acceptable
cashless
popular
Equitable

Q76     The rate of minimum tax was increased to ———- under the personal income Tax (Amendment) Act 2011
0.5% of gross income
0.5% of total income
1% of total income
1% of gross income

Q77        The penalty for ———– offence is that the offender will pay an amount equal to the income tax chargeable on him for the preceding year of assessment
A.      Non �?? compliance with notice
Failure to summit returns
Inappropriate returns
False statements and returns

Q78        Earnings from royalty, trademark , dividend , and rentals are examples of
Earnced income
Unearned income
Business income
Dividend and rental income

Q79        ————– Specifically refers to all incomes that emanates from a trade business, profession, vocation or employment, carried on or exercised by an individual.
A.      Unearned income
B. Earned income
Employment income
Business income

Q80 With respect to development of taxation in Nigeria, the era where the Finance. Miscellaneous ( Taxation provisions ) Decree of 1985 was amended is
A.      Period between 1985 �?? 1990
B. Period between 1980 �?? 1985
C. Period between 1985 �?? 1987
D. Period between 1985 �?? 1988

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