Department of Accounting, Law and Taxation

University of the-East Caloocan

Finals- Quiz 1
Name: ____________________________________
___________________________

Subject

and

Section:

Professor:_______________________________
Date:_______________________________________________
Multiple Choice
Identify and encircle the choice that best completes the statement or answers the question.
Theories (1 point):
1. Which of the following shall be subject to Value-Added Tax?
a. Any person who, in the course of his trade or business, sells, barters, exchanges or
leases goods or properties.
b. Any person who, in the course of his trade or business renders service.
c. Any person who imports goods.
d. All of the choices.
2. Who shall be statutorily liable to pay for the tax on sale of goods or properties and sale
of services and lease of properties?
a. Buyer
c. Consumer
b. Seller
d. None of the choices
3. Value-added tax is:
a. A specific tax
c. a local tax
b. An indirect tax
d. none of the choices
4. First statement: Non-resident persons who perform services in the Philippines are
deemed to be making sales in the course of trade or business, even if the performance of
service is not regular.
Second statement: VAT is imposed and collected on every sales, barter or exchange, or
transactions deemed sale of taxable goods or properties at the rate of 12% of the
gross selling price or gross value in money of the goods or properties sold, bartered, or
exchanged, or deemed sold in the Philippines.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
5. Which of the following shall not be included in the term goods or properties?
a. Real properties not held primarily for sale to customers or not held for lease in the
ordinary course of trade or business.
b. The right or privilege to use patent, copyright, design or model, plan, secret formula
or process, goodwill, trademark, trade brand or other like property or right
c. The right or the privilege to use any industrial, commercial or scientific equipment
d. The right or privilege to use motion picture film, films, tapes and discs
6. Which of the following shall be subject to VAT?
a. Sale of a residential house and lot
b. Sale of an apartment house
c. Sale of a private car by its owner

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d. All of the above

7. Which of the following sales of residential property where the instrument of sale
(whether instrument is nominated as a deed of absolute sale, deed of conditional sale or
otherwise) is executed on or after July 1, 2005, shall be subject to VAT?
I- Sale of residential lot exceeding P1,919,500
II- Sale of residential house and lot or other residential dwellings exceeding P3,199,200
a. I only
c. Both I and II
b. II only
d. Neither I and II
8. Mr. Andres, VAT-registered real estate dealer, transferred a parcel of land held for sale to
his son as gift on account of his graduation. For VAT purposes, the transfer is:
a. Not subject to VAT because it is a gift.
b. Subject to VAT because it is a deemed sale transaction.
c. Not subject to VAT because it is subject to gift tax.
d. Subject to VAT because it is considered an actual sale.
9. Which of the following statements is incorrect?
a. A zero-rated sale of goods or properties (by a VAT-registered person) is a taxable
transaction for VAT purposes, but shall not result in any output tax.
b. The input tax on purchases of goods, properties or services, related to zero-rated
sales, shall be available as tax credit only in accordance with the Regulations.
c. The input tax on purchases of goods, properties, or services, related to such zerorated sales, shall be available as tax credit or refund in accordance with the
Regulations.
d. Any enterprise whose export sales exceed 70% of the total annual production of the
preceding taxable year shall be considered an export-oriented enterprise.
10. The sale and actual shipment of goods from the Philippines to a foreign country,
irrespective of any shipping arrangement that may be agreed upon which may influence
or determine the transfer of ownership of the goods so exported is an export sales if:
I paid for in acceptable foreign currency or its equivalent in goods or services.
II accounted for in accordance with the rules and regulations of Bangko Sentral ng
Pilipinas (BSP)
a. Only I is correct
c. Both I and II are correct
b. Only II is correct
d. Neither I nor II is correct
11. Which of the following shall be considered deemed sale transactions?
a. Distribution or transfer to shareholders or investors share in the profits of VATregistered person.
b. Distribution or transfer to creditors in payment of debt or obligation
c. Consignment of goods if actual sale is not made within 60 days following the date
such goods were consigned
d. All of the choices
12. Which of the following shall be subject to 0% Value-Added tax?
a. Sale of electricity by generation companies
b. Sale of electricity by transmission companies
c. Sale of electricity by distribution companies
d. Sale of power or fuel generated through renewable sources of energy
13. At the end of any taxable quarter if the output tax excess the input tax, the excess shall
be:
a. Carried over the succeeding quarter by the VAT-registered person.
b. Claimed as tax credit and shall be deducted from the output tax of the succeeding
quarters by the VAT-registered person.
c. Paid by the VAT-registered person.
d. None of the choices.
14. If the input tax inclusive of input tax carried over from the previous quarter exceeds the
output tax, the excess input tax shall be:
a. Credited in every quarter but not to exceed seventy percent (70%) of the output tax.

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b. Carried over to the succeeding quarter or quarters.

c. Disregarded because carry over is no longer allowed under the new regulations.
d. Deducted from income tax due.
15. Where a VAT-registeres person purchases or imports capital goods, which are depreciable
assers for income tax purposes, the aggregate acquisition cost of which (exclusive of
VAT) exceeds P1,000,000 in a calendar month regardless of the acquisition cost of each
capital good, shall be claimed as credit:
a. Over a period of 60 months regardless of the estimated life.
b. Over a period of 60 months unless the estimated life is less than 5 years in which
case over the actual number of months comprising the estimated life.
c. In full in the month acquired, if the estimated life is less than 5 years.
d. In full in the quarter acquired unless the estimated life is less than 5 years, in which
case over the actual number of months comprising the estimated life.
16. Any input tax attributable to zero-rated sales by a VAT-registered person may at his
option be:
I refunded.
II applied for a tax credit certificate which may be used in payment of internal revenue
taxes.
a. Both I and II are correct
c. Only I is correct
b. Neither I nor II is correct
d. Only II is correct
17. The transitional input tax shall be:
a. Four percent (4%) of the value of the beginning inventory on hand or actual VAT paid
on such goods, materials and supplies whichever is lower.
b. Actual VAT paid on goods, materials and supplies comprising the beginning inventory.
c. Two percent (2%) of the value of the beginning inventory on hand or actual VAT paid
on such goods, materials and supplies, whichever is higher.
d. None of the choices.
18. Presumptive input tax is equivalent to:
a. Ten percent (10%) of the gross value in money of the purchases of primary
agricultural products used as inputs to the production.
b. Five percent (5%) of the gross value in money of the purchases of primary
agricultural products used as inputs to the production.
c. Four percent (4%) of the gross value in money of the purchases of primary
agricultural products used as inputs to the production.
d. Two percent (2%) of the gross value in money of the purchases of primary agricultural
products used as inputs to the production.
19. In which of the following situations will a person be mandatorily required to register
under the VAT system?
I His gross sales or receipts for the past twelve (12) months, other than those that are
exempt under Sec. 109 (1)(A) to (W) of the Tax Code, have exceeded the VAT threshold
amount.
II There are reasonable grounds to believe that his gross sales or receipts for the next
twelve (12) months, other than those that are exempt under Sec. 109 (1) (A) to (W) of
the Tax Code, will exceed the VAT threshold amount.
a. I only
c. Both I and II
b. II only
d. Neither I nor II
20. Any person who elects to optionally register under the VAT system, other than franchise
grantees of radio and/or television broadcasting, shall not be allowed to cancel his
registration for the next:
a. 5 years
c. 2 years
b. 3 years
d. 1 year
Problems (2 points):
Show your solution on separate sheet of paper.

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21. Tsukuba Company, a VAT-registered business, had the following data during the quarter:
Export sales
P1,815,000
Domestic sales (tax included)
1,232,000
Purchases of goods for export (tax included)
672,000
Purchases of goods for domestic sales (tax included)
323,120
Purchases of supplies on domestic sales,
Exclusive of tax
124,850
Assuming that the input taxes paid on purchases of goods for export are claimed as
tax credit the VAT payable by Tsukuba Company is
a. P12,895
c. P177,895
b. 10,398
d. 84,895
22. In previous question, assuming that the input taxes attributable to export sales are being
claimed as refund, the amount refundable is
a. P72,000
c. P84,895
b. 12,895
d. Zero
23. The Pastry shop sells cakes and pastry items to well-known hotels around the Metro
Manila area. The hotels are allowed credit based on the track record of the hotels. The
total amounts received or receivable from sales by the Pastry shop in the 2 nd quarter of
2011 were P224,000, including the value-added tax. Seventy five percent of the sales
are normally on account. How much is the value-added tax on the sales for the 2 nd
quarter of 2011?
a. P20,000
c. P26,800
b. 24,000
d. 15,000
24. The following information taken from the books of VAT-registered enterprise was provided
to you:
Domestic sales of goods
P3,000,000
Sales of packaging materials to an export-oriented enterprise whose
export sales exceed 70% of the total annual production
2,000,000
Local sales of goods to Asian Development Bank (ADB)
500,000
Consignment of goods (not returned within 60 days following
the date of consignment)
200,000
Goods transferred for the personal use of the owner
100,000
How much was the total taxable sales?
a. P3,000,000
c. P3,800,000
b. 3,300,000
d. 5,800,000
25. Using the same data in the preceding number, how much was the output tax using 12%
VAT rate?
a. P360,000
c. P456,000
b. 396,000
d. 696,000
26. The following data pertain to a VAT-registered taxpayer for February:
Sales, total invoice price
P896,000
Domestic purchases from a VAT supplier,
Gross of VAT
268,800
In January, there is an importation of goods to be sold, with a landed cost of P200,000.
There are no sales in January.
How much is the value-added tax in February using 12% VAT rate?
a. P43,200
c. P67,200
b. 51,264
d. 72,000
27. An owner of a warehouse, which used to be VAT-exempt because its annual receipts
never exceeded P1,500,000 decided to register under the VAT system on January 2,
2011. The following data were from the first quarter ending March 31, 2011:
Rental from warehousing services, net of 12% VAT
P336,000
Purchases of supplies (February), gross of VAT
112,000
Inventory of supplies, January 1, 2010
100,000
VAT on the inventory of supplies, January 1, 2010
10,000

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How much was the VAT payable for the quarter ending March 2011?
a. P26,320
c. P14,000
b. 18,320
d. None of the choices
28. Sweet Tooth, Inc. manufacturing refined sugar. The following selected data are taken
from its books:
Sale of refined sugar, net of VAT
P2,000,000
Purchase of sugar cane from farmers
500,000
Purchases of packaging materials, gross of VAT
784,000
Purchase of labels, gross of VAT
112,000
How much is the VAT payable using 12% VAT rate?
a. P124,000
c. P64,000
b. 84,000
d. 20,000
29. Butch, VAT-registered, made the following purchases during the month of January, 2011:
Goods for sale, inclusive of VAT
P246,400
Supplies, exclusive of VAT
20,000
Office air-conditioner, total invoice price (estimated life is 3 years)
56,000
Home appliances for residence, gross of VAT
17,920
Service for store repair, contractor not VAT-registered, total invoice amount 33,000
Service for repainting of store, total invoice amount evidenced by ordinary
Receipt issued by contractor
4,480
How much was the total allowable input taxes of Butch for the month using 12% VAT
rate?
a. P38,688.00
c. P34,800.00
b. 35,337.60
d. 34,542.86
30. On previous number, what if the sales amounted to P1,120,000 inclusive of VAT, how
much is the VAT payable?
a. P81,312.00
c. P85,200
b. 84,622.40
d. 85,457.14

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