Default for ACC201 The default category for questions shared in context 'ACC201'. Fill in the Blank Questions (FBQs) FBQ1 The basis of tax assessment under trusts, settlements and estates is on ________. *Preceding year basis* 1.0000000 0.0000000 FBQ2 The charge on gains made from the disposal of a chargeable asset is called ___________. *Capital gains tax* 1.0000000 0.0000000 0.0000000 FBQ3 ___________ has the right of election in a company when there is a change in accounting date *The tax authority* 1.0000000 0.0000000 FBQ4 Those expenses incurred by an employer in the provision of benefits to the employees are known as _____________. *Benefits in kind* 1.0000000 0.0000000 FBQ5 State if bad debts written off is an allowable deduction or a non allowable deduction *Allowable deduction* 1.0000000 0.0000000 FBQ6 ____________ assessment may be employed by the relevant tax authority in circumstances where the financial records are seen to be unreliable *Best of judgement* 1.0000000 0.0000000 FBQ7 Tenement rates are collected by ….. *Local Government* 1.0000000 0.0000000 FBQ8 _____________ income connotes trade, business, vocation and employment *Earned* 1.0000000 0.0000000 FBQ9 _____________ tax authority collects pools betting, lotteries and casino taxes *State Government* 1.0000000 0.0000000 FBQ10 __________refers to an agreement whereby a sum of money is set aside to make provision for another person *Settlement* 1.0000000 0.0000000 FBQ11 A non resident individual is one who is not ….. in Nigeria *Domiciled* 1.0000000 0.0000000 FBQ12 If after the cessation of business any unrelieved losses are termed ….. *Terminal losses* 1.0000000 0.0000000 FBQ13 The tax relief for small companies or business or trade is applicable for the first ….. years of the business or trade. *5* 1.0000000 *Five* 1.0000000 FBQ14 The maximum allowable deduction for donations in ascertaining the profit of a company is ….. percent of the profit before deducting the donation *10* 1.0000000 *Ten* 1.0000000 FBQ15 If the net profit of Susu is N500,000, depreciation is N250,000 and loss on disposal is N150,000. What is the adjusted profit of Susu for the period? *N900,000* 1.0000000 0.0000000 FBQ16 An ---------- is an individual appointed by the will to manage the estate of the deceased *Executor* 1.0000000 0.0000000 0.0000000 FBQ17 --------- assessment is raised by the board when a taxpayer has been under assessed *Additional* 1.0000000 0.0000000 FBQ18 Signboard and advertisement permit fees is collected by: *Local government* 1.0000000 0.0000000 FBQ19 ---------------------------- shall be granted to any settlement, trust or estate that the income includes any income which has suffered tax in Nigeria or outside Nigeria. *Double Taxation Relief* 1.0000000 0.0000000 0.0000000 FBQ20 If the turnover of a small company is N900,000; the adjusted profit 443,,000 and capital allowance is N297,500. Determine the tax liability of the company. *N29,100* 1.0000000 0.0000000 FBQ21 Individuals other than those engaged in agricultural business can carry forward losses up --------- years of assessment *4* 1.0000000 *Four* 1.0000000 FBQ22 -------- are charges that do not relate to any income but allowed as deduction in arriving at the chargeable income of an individual tax payer *General charges* 1.0000000 0.0000000 FBQ23 Non oil export under value added tax is an example of -------- goods and services *Zero-rated* 1.0000000 0.0000000 FBQ24 ------- are taxes on documents and not on transactions or persons *Stamp duties* 1.0000000 0.0000000 FBQ25 When a business commences operation, the basis period for assessable profit in the first year of commencement is on ------- basis *Actual year* 1.0000000 0.0000000 0.0000000 FBQ26 The acronym for the scheme in which tax is deducted from the income of an employee at source is: *PAYE* 1.0000000 0.0000000 0.0000000 FBQ27 The list of taxable persons assessed to income tax under Personal income tax act is called ------- *Assessment list* 1.0000000 0.0000000 FBQ28 Value added tax rate is computed at ------of the value of all vatable goods and services *5 percent* 1.0000000 *Five percent* 1.0000000 FBQ29 ------------------ refers to income from all sources other than those gotten from employment business or reward for services rendered. *Unearned income* 1.0000000 0.0000000 FBQ30 Where investment incomes are received net of withholding tax, they are termed ---- *Franked investment income* 1.0000000 0.0000000 0.0000000 FBQ31 ------ VAT refers to the amount paid to the tax authorities which reflects the difference between the total VAT collected from customers on sale. *Output* 1.0000000 0.0000000 FBQ32 ------ VAT is made by a person or individual who shall reimburse the supplier the VAT on Vatable goods and services purchased by or supplied to him. *Input* 1.0000000 0.0000000 FBQ33 In conversion of partnership into a limited liability company________ rules should be applied. *Cessation* 1.0000000 0.0000000 FBQ34 The basis period for the second year on commencement of business is profits of the first ------ months of trading. *12* 1.0000000 *Twelve* 1.0000000 FBQ35 An individual who earns daily wages is an ……………. *Itinerant worker* 1.0000000 0.0000000 0.0000000 FBQ36 One of the objectives/purposes/uses of taxation is to discourage the consumption of -------------------- products. *Dangerous products* 1.0000000 *Harmful products* 1.0000000 FBQ37 Under the cannons/principles of taxation the principle of economy relates to ------ of administering tax. *Cost* 1.0000000 0.0000000 0.0000000 FBQ38 ___________________ is levied on all companies at the rate of 2 percent of their assessable profits. *Tertiary Education Tax* 1.0000000 1.0000000 FBQ39 --------------- implements the decisions of the Joint Tax Board (JTB) and advices the JTB and the State local government on revenue matters. *State Joint Revenue Committee* 1.0000000 *SJRC* 1.0000000 FBQ40 _____________ advices the local government on tax related matters *Local government revenue committee* 1.0000000 *LGRC* 1.0000000 FBQ41 Where there is a merger of partnerships, the older partnership, will not ----- business. *Cease* 1.0000000 0.0000000 FBQ42 One disadvantage of indirect tax is that while direct taxes can be made progressive, indirect taxes are -----------------. *Regressive* 1.0000000 0.0000000 FBQ43 ------------------- assessment is normally used for non–resident companies. *Turnover* 1.0000000 0.0000000 FBQ44 For the purpose of determining adjusted profit, deduction of revenue expenditure must be wholly, ------------------ necessarily and reasonably incurred. *Exclusively* 1.0000000 0.0000000 0.0000000 FBQ45 --------------------- advices Federal Inland Revenue Service (FIRS) on its duties in administering the VAT. *Value added tax technical committee* 1.0000000 *VAT Technical Committee* 1.0000000 FBQ46 ____________ makes recommendations, where appropriate to the Joint Tax Board on tax policies, tax reforms, tax legislation, tax treaties and exemption as may be required from time to time. *State Inland Revenue Service Board* 1.0000000 *SIRSB* 1.0000000 0.0000000 FBQ47 If the price of a carton of Wine sold is N1,800 and VAT is levied at 5 percent, calculate the VAT payable on 20,000 cartons of wine. *N1,800,000* 1.0000000 0.0000000 0.0000000 FBQ48 The individual that creates settlements a trust or settlement either directly or indirectly is a -------------------------. *Settler* 1.0000000 1.0000000 FBQ49 Musa earns dividend of N1,100,000 in 2017, N1,200,000 in 2018 and N1,500,000 in 2019. What is the amount of dividend assessable to tax in 2018 Tax year? *N1,100,000* 1.0000000 0.0000000 0.0000000 FBQ50 The foreign currency portion of the ordinary share capital that is brought into Nigeria from abroad through approved government channels is called ----------------. *Imported equity capital* 1.0000000 0.0000000 Multiple Choice Questions (MCQs) MCQ1 From the following taxes, which is indirect tax? Capital gains tax 0.0000000 Petroleum profit tax 0.0000000 Value added tax 1.0000000 Company income tax 0.0000000 MCQ2 If the assessable profit of a company is N3,000,000 and capital allowance is N500,000. What is the company’s tax liability? N900,000 0.0000000 N750,000 1.0000000 N2,300,000 0.0000000 N450,000 0.0000000 MCQ3 The assessable profit of a company is N900,000. Calculate the tertiary education tax N10,000 0.0000000 N80,000 0.0000000 N180,000 0.0000000 N18,000 1.0000000 MCQ4 Mr. Best received gross dividend of N200,000 and N800,000 for 2018 and 2019 years of assessment respectively. Determine the unearned income for 2019 tax year. N200,000 1.0000000 N800,000 0.0000000 N1,000,000 0.0000000 N400,00 0.0000000 MCQ5 ….. is an example of deductions allowed from the profits of companies General provisions for bad debts 0.0000000 Specific provision for bad debt 1.0000000 Depreciation 0.0000000 Capital repaid or withdrawn 0.0000000 MCQ6 Who has the right of election in a company on cessation of business? The tax authority 1.0000000 The tax payer 0.0000000 Both the tax payer and the tax authority 0.0000000 The company 0.0000000 MCQ7 Where a person dies and leaves a valid will, the person died A trustee 0.0000000 A legatee 0.0000000 Intestate 0.0000000 Testate 1.0000000 MCQ8 Donation made to one of the following research institutions are not allowable deductions Christian Council of Nigeria 0.0000000 Christian Association of Nigeria 1.0000000 Islamic Education Trust 0.0000000 Boys Brigade of Nigeria 0.0000000 MCQ9 Which of the following is not needed in the computation of tax liability in a small company? : Adjusted profit 0.0000000 Taxable profit 0.0000000 Capital allowance 0.0000000 Turnover 1.0000000 MCQ10 Which of the following is not a tax exempt income? Life assurance premium 0.0000000 Gratuities 0.0000000 Dividend 1.0000000 National pension scheme 0.0000000 MCQ11 The provision of Personal income tax act (PITA) requires a penalty of ….. percent of tax not deducted plus interest for failure to deduct tax 5 0.0000000 10 1.0000000 15 0.0000000 20 0.0000000 MCQ12 An obligation given in faith to one or more individuals to dispose property and apply the benefits in favour of the owners of the property refers to: Intestate 0.0000000 An estate 0.0000000 Trust 1.0000000 Settlement 0.0000000 MCQ13 The imposition of tax, penalty and fines by legal authority can be referred to as : Taxation 0.0000000 Subscription 0.0000000 Dues 0.0000000 Levy 1.0000000 MCQ14 Where the increase in income results in the increase of tax rate, it is called ___________________. Proportional tax 0.0000000 Regressive tax 0.0000000 Progressive tax 1.0000000 Direct tax 0.0000000 MCQ15 The tax authority’s consideration of a person’s ability to pay tax is a function of the principle of ___________ Equity 1.0000000 Convenience 0.0000000 Certainty 0.0000000 Simplicity 0.0000000 MCQ16 Personal income tax, capital gains tax and company income tax are all examples of : Indirect tax 0.0000000 Direct tax 1.0000000 Progressive tax 0.0000000 Regressive tax 0.0000000 MCQ17 Monetary charge imposed by the government on persons, entities or property to yield revenue can be referred to as: Subscription 0.0000000 Levy 0.0000000 Dues 0.0000000 Taxation 1.0000000 MCQ18 If a tax of N30 is imposed on a loaf of bread making a total of N90,000 for 3,000 loaves of bread sold by YumYum bakery. What type of tax is this? Ad valorm 0.0000000 Direct tax 0.0000000 Specific tax 1.0000000 Indirect tax 0.0000000 MCQ19 Given computed income of N28,000,000; discretionary payments of N8,000,000; Specific payment of N18,000,000. What is the excess apportionment? N2,000,000 1.0000000 N4,000,000 0.0000000 N8,000,000 0.0000000 N7,000,000 0.0000000 MCQ20 Which of the following is a tax exempt income? Dividend 0.0000000 Gratuities 1.0000000 Rent 0.0000000 Capital gains 0.0000000 MCQ21 Donations made to one of the following research institutions are not allowable deductions. Nigeria institute of oil Palm research 0.0000000 Nigeria institute of international trade 1.0000000 Nigeria council for medical research 0.0000000 Cocoa research institute of Nigeria 0.0000000 MCQ22 Legal expenses not allowed as deductions for the purpose of ascertaining the income of an individual include _____________________. Retainers fees 0.0000000 General legal advisory services 0.0000000 Renewal of a short lease 0.0000000 Renewal of a long lease 1.0000000 MCQ23 The assessment of income from Trusts, settlements and estates is governed by the provisions of : Personal income tax act (PITA) 1.0000000 Companies income tax act (CITA) 0.0000000 Trusts, settlements and estates act (TSEA) 0.0000000 Capital gains tax act (CGTA) 0.0000000 MCQ24 Minimum tax computation is not applicable to the following companies EXCEPT: A company carrying on manufacturing business 1.0000000 A company carrying on agricultural trade or business 0.0000000 A company with at least 25 percent imported equity capital 0.0000000 A company within its first four calendar years of commencement of trade 0.0000000 MCQ25 Wizzy Nig. Ltd has been in business for some time now. In 2018, turnover was N950,000. Adjusted profit N780,000 and capital allowance N500,000. What is the Taxable profit? N450,000 0.0000000 N500,000 0.0000000 N170,000 0.0000000 N280,000 1.0000000 MCQ26 Where turnover is N500,000 and below, minimum tax is the highest of any of the following EXCEPT____________ 0.5 percent of net asset 0.0000000 0.5 percent of gross profit 0.0000000 0.25 percent of turnover for the year 0.0000000 0.5 percent of paid up share capital 1.0000000 MCQ27 If the total profit of a company is N10,000,000 and adjusted profit is N4,000,000. Calculate the Tertiary education tax for the relevant year N200,000 0.0000000 N120,000 0.0000000 N80,000 1.0000000 N1,200,000 0.0000000 MCQ28 If the net profit as per account of Edo enterprises is N4,000,000. Depreciation is N800,000 and loss on disposal of non current assets is N300,000. What is the adjusted profit of the business for the period? N3,900,000 0.0000000 N5,100,000 1.0000000 N3,700,000 0.0000000 N3,200,000 0.0000000 MCQ29 If the earned income of Alhaji Jigawa is N7,000,000 for 2019 tax year. His life assurance premium is N480,000 p.a; National pension scheme is N800,000; National health insurance scheme N1,200,000 and National housing fund contribution is N720,000. What is Alhaji Jigawa’s total income? N3,800,000 1.0000000 N1,400,000 0.0000000 N9,200,000 0.0000000 N920,000 0.0000000 MCQ30 Mrs. Yemisi is an employee of Noun Plc. Noun provided for her exclusive use of a Prado SUV which cost N14,000,000. Calculate the income derived by Mrs. Yemisi’s use of the vehicle. N1,400,000 0.0000000 N14,000,000 0.0000000 N280,000 0.0000000 N700,000 1.0000000 MCQ31 The following benefits to employees are exempted from tax EXCEPT_________. Provision of meals in a canteen for all staff 0.0000000 Provision of uniforms 0.0000000 Provision of a generator for exclusive use of an employee 1.0000000 Expenses connected with the transfer of an employee 0.0000000 MCQ32 If the gross income of Mallam Sambo is N8,000,000. Determine his consolidated relief allowance N200,000 0.0000000 N800,000 0.0000000 N1,200,000 0.0000000 N1,800,000 1.0000000 MCQ33 The chargeable income of Savvy is N500,000 for 2019 tax year. Calculate her personal income tax for the relevant tax year Tax Table: 1st 300,000 is 7% Next 300,000 is 11% Next 500,000 is 15% etc N75,000 0.0000000 N43,000 1.0000000 N21,000 0.0000000 N55,000 0.0000000 MCQ34 Great Limited commenced business on 1st June, 2018. His assessable profit to 31st May, 2019 is N4,800,000. Determine his assessable income for 2018 tax year. N2,800,000 1.0000000 N2,400,000 0.0000000 N2,000,000 0.0000000 N4,800,000 0.0000000 MCQ35 On commencement of business, the basis period for the third year of assessment is on: Actual year basis 0.0000000 Normal year basis 0.0000000 Abnormal year basis 0.0000000 Preceding year basis 1.0000000 MCQ36 The following are examples of indirect taxes ECEPT: Export duties 0.0000000 Excise duties 0.0000000 Capital gains tax 1.0000000 Value added tax 0.0000000 MCQ37 The penalty for failing to file returns according to the Personal Income Tax (Amendment) Act, 2011 for corporate organizations is --------------. N1,000,000 0.0000000 N200,000 0.0000000 N2,000,000 0.0000000 N500,000 1.0000000 MCQ38 Welfare funds are allowable under companies income tax Act but limited to the following institutions EXCEPT; Nigerian Institute of Trypanosomiasis Research 1.0000000 Nigerian sports commission and its state associations 0.0000000 Musical Society of Nigeria 0.0000000 Rotary International (Polioplus programme) 0.0000000 MCQ39 ------ is an example of services exempted from VAT Baby products 0.0000000 Plays and performances conducted by educational learning institutions 1.0000000 Basic food items 0.0000000 All exports 0.0000000 MCQ40 When the net profit of ABC Ltd is N2,000,000 is arrived at after deducting Depreciation 800,000, General provision for bad debts 900,000, Repairs of Motor Vehicle 500,000 and adding profit on sale of non- current assets of 700,000. Calculate the adjusted profit. N4,000,000 0.0000000 N4,400,000 0.0000000 N3,000,000 1.0000000 N3,900,000 0.0000000 MCQ41 A tax system in which each tax payer pays the same rate or percentage of his income as tax is ; Progressive tax 0.0000000 Regressive tax 0.0000000 Proportional tax 1.0000000 None of the above 0.0000000 MCQ42 The following are tax exempt items EXCEPT: National Pension Fund 0.0000000 Life Assurance Premium 0.0000000 Gratuities 0.0000000 Benefits in Kind 1.0000000 MCQ43 A normal accounting year includes the following EXCEPT___________. Absolutely 12 Months 0.0000000 Commencement of business 1.0000000 Year end consistency 0.0000000 Continuity of basis period 0.0000000 MCQ44 The period for which the entity pays its tax on earned income is ________. Basis Period 1.0000000 Assessment Year 0.0000000 Accounting period 0.0000000 Accounting Year 0.0000000 MCQ45 A change in the composition of partnership will arise on ______________. Death of a partner 0.0000000 Cessation of the partnership business 0.0000000 Retirement of a partner 1.0000000 Commencement of the partnership business 0.0000000 MCQ46 Where the objective of taxation is the redistribution of income from the well to do to the less privileged then the tax is _____________________. Progressive 1.0000000 Regressive 0.0000000 Proportional 0.0000000 Equitable 0.0000000 MCQ47 In case of conversion of Partnership to a limited liability company, the ------------------- rules will apply. Change in accounting in accounting date 0.0000000 Conversion rule 0.0000000 Commencement 0.0000000 Cessation 1.0000000 MCQ48 What is the benefit in kind of Shehu Usman if the employer provided him with an asset which cost N2,500,000? N25O,OOO 0.0000000 N125,000 1.0000000 N50,000 0.0000000 N100,000 0.0000000 MCQ49 The incentive bonus available to a tax payer for early filing of self-assessment returns is______________ 10 % of tax payable 0.0000000 20% of tax payable 0.0000000 5% of tax payable 0.0000000 1% of tax payable 1.0000000 MCQ50 The actual year basis (AYB) of assessment on commencement of business starts from _____________. From the day of commencement of that year to 31st December of that year 0.0000000 The day it changed business in that year 0.0000000 1st January to 31st December of that year 1.0000000 1st January to the day it ceased business 0.0000000