1. Which of the following statements is true? A. Payments which constitute bribes, kickbacks and others of similar nature which are necessary to realized profits are allowed as deductions from gross income. B. The taxes which are deductible from gross income include the taxes, interest and penalties incident to tax delinquency. c. Deduction are amounts allowed by the Tax Code to be deducted from gross income to arrive at the income tax liability of a taxpayer. D. Losses from wagering transactions shall be allowed only up the extent of the gains from such transactions. 2. This is not deductible from gross income A. Transportation expenses from the main office to the branch. B. Transportation expenses from home to the office and from the office back to home. C. Travel expenses on business trips. D. Travel expenses while away from home in the pursuit of trade, business or profession A revenue expenditure is A. Usually incurred in the acquisition, betterment or permanent improvement of the asset. B. Capitalized and the cost is recovered through annual depreciation C. Ordinarily to benefit more than one accounting period D. To benefit one accounting period and is a deduction from gross income in the year paid or incurred 3. 4. No deductions shall be allowed where the transactions is between "related taxpayers" under Sec. 36(B) of the Tax Code for A. Losses from sales or exchange of property B. Interest expense C. Bad debts A. A and B В. В and C C. A and C D. A, B and C 5. The phrase "related taxpayers" under Sec. 36(B) of the Tax Code will apply to the following, except: A. Between members of a family B. Between the grantor and a fiduciary of any trust c. Between a fiduciary of a trust and a beneficiary of such trust D. Between an individual and a corporation more than 50% in value of the outstanding stock of which is owned, directly or indirectly by or for such individual, in case of distribution in liquidation. 6. The optional standard deduction for corporation is A. 10% of gross income B. 10% of the gross sales/receipts c. 40% of the gross income D. 40% of the gross sales/receipts 7. The optional standard deduction for individuals is A. 10% of the gross income B. 10% of the gross sales/receipts C. 40% of the gross income D. 40% of the gross sales/receipts 8. Interest expense incurred to acquire property used in trade or business or exercise of a profession is A. Not allowed as a deduction against gross income B. Required to be treated as a capital expenditure to form part of the cost of the asset C. Allowed as a deduction or treated as a capital expenditure at the option of the taxpayer D. Allowed as a deduction or treated as a capital expenditure at the option of the government