PASIG CATHOLIC COLLEGE

FINAL EXAMINATION TAXATION II

BSA IV MAJOR IN ACCOUNTING
CPA
MONDAY, 1:30PM 4:30PM
Test I.

MARVIN M. CELEDIO,

Multiple Choice Questions

Encircle the letter that corresponds to the best answer.

1. The business registration should be made
a. After the business commences its operation
b. Before the start of the business
c. Before the end of January
d. Before the start of business registration subject to renewal annually
before the end of January.
2. The amount of VAT registration threshold for the annual sales or gross
receipts is
a. More than PhP1,919,500
b. PhP1,919,500 or less
c. More than PhP1,500,000
d. PhP1,500,000 or less
3. Which of the following business transactions is subject to VAT?
a. Casual sale of capital asset real property with selling price of P2M.
b. Lease of commercial property with annual gross receipts of P2M
c. Sale of livestock and poultry products amounting to P10M
d. Importation of fertilizers and seedlings amounting to P5M
4. Statement I Annual gross receipts of P5M received by a radio and TV
broadcast franchise holder, which is registered as VAT is subject to 12% VAT.
Statement II The gross receipt of P20M for the year reported by non-VAT TV
broadcast franchise is subject to VAT.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
5. Statement I Both Zero-rated and VAT exempt transactions are not subject to
12% output VAT.
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Statement II Zero rated transactions are allowed with tax credit for Input
VAT attributable to such sales or receipts, while VAT- exempt transaction is
not.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
6. Which of the following transactions are not allowed to deduct input VAT?
a. Importation
b. Zero-rated VAT
c. Sales to the government
d. Sale of VAT-registered person

7. Any person, in the course of business, who sells, barters, exchanges, leases
goods or properties , renders services and imports goods shall be subject to
VAT, except
a. Non-stock and non-profit private organization.
b. Government owned and controlled corporations.
c. Farmers selling their farm food products in their original state.
d. Medical services rendered by professionals.
8. The amount of the sales to a VAT-registered person which requires that the
sales invoice should contain the customers name, address and TIN.
a. P5,000 or more
b. P3,000 or more
c. P2,000 or more
d. P1,000 or more
9. The following business transactions are subject to regular 12% regardless of
the amount of gross receipts of
a. Common carriers by air and sea.
b. Transport of passengers by land.
c. Electric company from sale power generated not using renewable
resources.
d. Transport of goods and cargoes.
10.The VAT-sale of goods or services to the government shall be subject to final
withholding of
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a. 1% or 2% income tax
b. 3% other percentage tax.
c. 5% value-added tax.
d. 7% standard input VAT.
11.X is a VAT-registered professional business with the following reports during
the year:
Collections from clients including VAT
Billings including VAT

P4,480,000
1,680,000

Supplies used including VAT

560,000

Importation of equipment including VAT

112,000

The net VAT payable would be

a. P600,000.
b. P480,000.
c. 420,000.
d. P408,000
12.This kind of tax is imposed due to opportunity given to engage on sale,
exchange, or barter of goods and services.
a. Ad-valorem tax
b. Privilege tax.
c. Consumption tax.
d. Indirect tax.
13.Statement 1: Importations of goods are subject to VAT, but export sales are
exempt from 12% VAT.
Statement 2: VAT is an additional tax imposed on goods or services for the
consumption privilege.
a. Only statement 1 is correct.
b. Only statement 2 is correct.
c. Both statements are correct.
d. Both statements are incorrect.
14.Which of the following is not a characteristic of VAT?
a. Tax on gross sales
b. Tax on consumption
c. Tax on sellers
d. Tax on buyers
15.Statement 1: A zero-VAT business is the same with VAT-exempt business.
Statement 2: Seniors citizens are exempted from VAT and subject to 20%
discount.
a. Only statement 1 is correct.
b. Only statement 2 is correct.
c. Both statements are correct.
d. Both statements are incorrect.
16.Nandian Enterprises, a VAT-registered trading business, reported the
following sales during the taxable quarter:

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Sales per VAT invoice, no output VAT is shown

P224,000
Sales per VAT-invoice, output VAT shown separately
Amounted to P30, 000 inclusive in the invoice
330,000
Sales per purchase order (delivered)
110,000
Sales purchase order (not yet delivered)
500,000
The output VAT reportable during the taxable quarter would be:
a. P138, 480
b. P131, 358
c. P71, 358
d. P66, 000
17.Which of the following assets sold is subject to both business tax and income
tax?
a. Ordinary asset
b. Capital asset
c. Personal asset
d. All of the above
18.Which of the following is subject to VAT?
a. Copra
b. 100% grounded meat
c. Dried fish
d. Sardines
19.Statement 1: All sales of VAT-registered person, domestic sales and export
sales are subject to 12% Output VAT.
Statement 2: VAT taxable a sale of VAT person sold to non-VAT person is
exempt from 12% output VAT.
a. Only statement 1 is correct.
b. Only statement 2 is correct.
c. Both statements are correct.
d. Both statements are incorrect.
20.Which of the following is not a requisite in order that the supply of service is
VAT?
a. The service must be performed in the Philippines and in the course of
business or trade.
b. The service is rendered for remuneration.
c. The service must be performed by a resident Filipino citizen.
d. The service rendered is not exempt from VAT under the Tax Code,
other special laws or international agreement.
21.Which of the following is subject to zero-rated VAT?
a. Agricultural contact growers
b. Medical, dental, hospital and veterinary services
c. Accredited educational services
d. Transport of passengers by a domestic corporation outside the
Philippines
22.Which of the following is not a source of creditable input VAT?
a. Purchases and payments of services to other VAT-registered
businesses
b. Goods received through donation
c. Importation of goods (for business use or for sale locally)
d. Transitional and presumptive input VAT
23.The entire
a. The
b. The
c. The
d. The

amount of input VAT is allowed as tax credit when

depreciable capital goods is more than P1, 000,000 excluding VAT.
sale is an instalment sale.
purchase is a zero-rated transaction.
purchase is related to construction in progress.
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24.The total taxable sales of the non-VAT business are P1, 000,000. Its
purchases form VAT person, inclusive of VAT, is P84, 000. How much is the
amount of input VAT for the period?
a. P 0
b. P7,500
c. P8,250
d. P9,000
25.Which of the following is allowed with tax credit certificate issuance?
a. VAT-exempt sales
b. Regular VAT sales
c. Zero-rated sales
d. Sales to government
26.A VAT-registered business reported the following sales before VAT:
Domestic sales
Export sales
VAT-exempt sales
Sales to government

P1, 125,000
300,000
60, 000
15, 000

If its accumulated input VAT amounts to P80, 000, the amount of total VAT
deductible from sales to government would be
a. P15, 000
b. P1, 800
c. P1, 050
d. P 750
27.The gross receipts of a non-VAT service business is subject to OPT if the
amount
a. Is P1, 919, 500 and below per year
b. Exceeds P 1, 919, 500 per year
c. Is derived from contract growers services
d. Is derived from ecozone customers
28.Which of the following business is not subject to other percentage tax?
a. Carriers of passengers
b. Life insurance
c. Carriers of cargoes
d. Sale of shares of stock in the local stock exchange
29.Which of the following franchise gross receipts is covered by the threshold
amount of P1, 919, 500 per year?
a. Gas
b. Water
c. Radio and television broadcasting companies
d. All of the above
30.The percentage tax rate on shares of stock traded in the stock exchange is
a. of 1% of sales
b. 1 % of capital gain from the transaction
c. 1% of sales which is more than 25% of the outstanding stocks issued
d. 2% of sales which is more than 25% but not more than 33 1/3% of the
outstanding stocks issued

---Be a CPA with or without a teacher! Just

do believe in yourself.--GOD BLESS YOU!!!

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