BUSTAX

Name:________________________________ Date:_________________________
Section:_______________________________ VALUE ADDED TAX

1. One of the following statements is incorrect

a. Imported goods which are subject to excise tax are no longer subject to VAT
b. VAT on importation is paid to bureau of customs before the imported goods are released from its custody
c. Expenses incurred after the goods are released from customs custody are disregarded in computing the VAT
on importation
d. When a person who enjoys a tax-exemption on his importation subsequently sells in the Philippines such as
imported articles to a non-exempt person, the purchaser non-exempt person shall pay the VAT on such
importation
2. Which of the following input taxes can be refunded, converted into tax credit certificates or carried over to the
next quarter at the option of the VAT registered taxpayer?
a. Input tax on purchase of raw materials c. Input tax on zero-rated sales of goods or services
b. Input tax on importation of supplies d. Input tax on purchase of services
3. Value Added Tax is a/an
a. Indirect tax b. Direct tax c. Local tax d. Personal tax
4. Statement 1- A taxpayer whose gross sales or receipts exceeded the amount of P3,000,0000. shall pay the VAT
even if he is not VAT registered; consequently, he is also entitled to input taxes
Statement 2- Importer of goods for personal use is not subject to VAT if he is not VAT registered
a. Both statements are true c. Only statement 1 is true
b. Both statements are false d. c. Only statement 2 is true
5. Which statement is correct?
a. Zero rated sales is exempt from the VAT
b. A person whose sales or receipts do not exceed P250,000 is exempt from VAT and OPT
c. A person who issues a VAT invoice on a VAT exempt transaction is nevertheless subject to VAT on the said
transaction
d. Entities which are exempt from income tax are also exempt from VAT
6. Which of the following importation is subject to VAT?
a. Importation of frozen meat c. Importation of apples for personal consumption
b. Importation of bamboo poles d. Importation of grape for sale
7. Which of the following is subject to VAT
a. Sale of smoked fish c. Sale of shells and coral products by a dealer
b. Sale of lechon d. Sale of newspapers
8. One of the following is not a major business internal revenue tax in the tax code
a. VAT b. Excise tax c. Income tax d. Percentage tax
9. The allowable transitional input tax is
a. The lower between 2% of the value of beginning inventory or actual VAT paid on such inventory
b. The higher between 2% of the value of the beginning inventory or actual vat paid on such inventory
c. The actual vat paid on the beginning inventory
d. 2% of the value of beginning inventory
10. The value-added tax due on the sale of taxable goods, property and services by any person whether or not he
has taken the necessary steps to be registered
a. Input tax b. Output tax c. Excise tax d. Sales tax
11. One of the following is not a transaction deemed sale
a. Transfer, use or consumption not in the ordinary course of business of goods or properties originally
intended for sale or for use in the course of business
b. Distribution or transfer to shareholders or investors of goods or properties as share in the profits of a vat-
registered person or to creditors in payment of debt
c. Retirement from or cessation of business, with respect to inventories of taxable goods on hand as of the
date of such retirement or cessation
d. Consignment of goods if actual sale is made within 60 days following the date such goods were consigned
12. One of the following is not an activity subject to VAT
a. Sale in retail of goods by a dealer c. Sublease of real property in the course of business
b. Sale of bamboo poles by a dealer d. Importation of ordinary feeds for poultry chicken
13. Which of the following is not correct?
I. Any person who is vat exempt and not otherwise required to register for VAT may elect to be VAT
registered but shall not be allowed to cancel his VAT registration for the next three years
II. Any person who is VAT registered but enters into transactions which are exempt from VAT may opt
that the VAT apply to his transactions which would have been exempt but shall not be allowed to
cancel his VAT registration for the next three years
 III. Franchise grantees of radio and/or television broadcasting whose annual gross receipts of the
preceding year do not exceed Php 10M may opt for VAT registration, but shall not be allowed to
cancel his VAT registration for the next three years.
a. III only b. II only c. I only d. I,II and III
14. Which of the following sales of real properties held primarily for sale to customers shall be subject to VAT?
a. Sale of parking lot where the selling price is Php 1,800,000
b. Sale of 2 adjacent residential lot in favor of one buyer from the same seller at Php 950,000 each lot
c. Sale of 2 adjacent residential dwellings in favor of one buyer from the seller at Php 1,500,000 each
residential dwelling
d. Sale to one buyer from the sale seller of 2 condominium units which are combined and utilized as one
residential units where the aggregate value of the adjacent units exceeds Php 1,919,500
15. ABC Restaurant recorded the following sales during the month (based on menu prices)
To regular customers Php 560,000
To senior citizens 224,000
To person with disability 112,000
The output vat is
a. Php 60,000 .b. 72,000 c. Php 69,600 d. Php 79,200
16. The taxpayer is a VAT registered real estate dealer
Selling Price (net of Vat) Php 5,000,000
Zonal value 5,500,000
FMV, in the assessment rolls 5,300,000
Cost 2,000,000
Mortgage 2,100,000
Payments made by the buyer
March 15, 2019 P575,000
October 15, 2019 575,000
March 15, 2020 1,875,000
October 15, 2020 1,875,000
I. The output tax on March 15, 2019 collection is

II. The output tax on March 15,2020 collection is

17. The taxpayer is a VAT registered taxpayer sold his real property classified as ordinary asset
Selling Price (net of Vat) Php 10,000,000
Zonal value 10,300,000
FMV, in the assessment rolls 9,800,000
Payments made by the buyer
March 15, 2019 P1,250,000
October 15, 2019 1,250,000
March 15, 2020 3,750,000
October 15, 2020 3,750,000
III. The output tax on March 15, 2019 collection is

IV. The output tax on March 15,2020 collection is

18. Using the preceding number, but the FMV in the assessment rolls is P10,500,000
I. The output tax on October 15,2014 collection is
a. P780,000 b. P90,000 c. P97,500 d. P270,000
II. The output tax on October 15, 2015 collection is
a. P780,000 b. P135,000 c. P270,000 d. P292,500
19. A is engaged in two (2) lines of businesses, one with VAT and the other is Non-VAT. His records show the
following (VAT not included):
Sales:
From VAT business P4,000,000
From Non-VAT business 6,000,000
Purchases of goods from VAT suppliers:
For VAT business 2,000,000
For non-VAT business 3,000,000
Purchases from VAT supplier of supplies used for
both VAT and non-VAT businesses 20,000
Operating expenses 1,800,000
I. The output VAT is?
 II. The VAT payable is
a. P600,000 b. P240,000 c. P237,600 d. P239,040
III. The net income is
a. P3,180,000 b. P2,840,000 c. P2,818,560 d. P2,820,000
20. Monthly VAT declaration is filed on or before the
a. 10th day from the end of each month c. 25th day from the end of each month
th
b. 20 day from the end of each month d. 30th day from the end of each month
21. Quarterly VAT return shall be filed on or before the
a. 10th day from the end of each quarter c. 15th day from the end of each quarter
th
b. 20 day from the end of each quarter d. 25th day from the end of each quarter
22. Taxpayer operates a grocery store and is non-vat registered. His annual gross sales amounted to P2,900,000 for
the year although his operations resulted to net loss for the year 2014. He is subject to
a. 3% OPT b. VAT c. MCIT-2% d. None, because operations resulted to loss
23. Which of the following lessors of residential units is/are subject to VAT?
A B C D
No. Of apartments 100 20 12 14
Monthly rent/unit P14,000 P15,000 P15,200 P19,500

a. B and D b. C and D c. B,C and D d. D only

24. K imported a car from USA for her personal use. Total landed cost is P250,000, including customs duties of
P50,000. VAT on importation is
a. P0 b. P20,000 c. P36,000 d. P30,000
25. An importer wishes to withdraw its importation from the bureau of customs. The imported goods were
subjected to 10% customs duty in the amount of P12,500 and other charges in the amount of P9,500. The VAT
due is
a. P12,500 b. P17,640 c. P13,364 d. P14,700
26. A imported an article from USA. The invoice value of the imported article was $7,000 ($1-P50). The following
were incurred in relation with the importation
Insurance P15,000
Freight 10,000
Postage 5,000
Wharfage 7,000
Arrastre charges 8,000
Brokerage fee 25,000
Facilitation fee 3,000
The imported article is subject to P50,000 customs duty and P30,000 excise tax. A spent P5,600 (inclusive of
VAT) for trucking from the customs warehouse to its warehouse in Quezon City. The VAT on importation is:
a. P60,000 b. P35,000 c. P50,500 d. P60,000
27. Assuming that the imported article above was sold for P600,000, VAT exclusive. The VAT payable is
a. P11,400 b. P12,000 c. P9,500 d. P9,200
28. The A bakers sells cakes and pastry to well known hotels in metro Manila area. The hotels are allowed credit
based on the track record of the hotels. The sale by the store in April 2014 was P224,000, including the VAT. 75%
of the sales are normally on account. How much is the output tax for the month of April 2014?
a. P22,000 b. P20,000 c. P16,500 d. P24,000
29. A, trader, made the following sales of goods during the month of June 2014, exclusive of VAT:
Cash sales P200,000
Open account sales 100,000
Instalment sales 100,000
Note: receipt from instalment sales 40,000
Consignment made (net of VAT)
June 15, 2014 100,000
May 15, 2014 100,000
April 15, 2014 100,000
Output tax is
a. P50,000 b. P34,000 c. P60,000 d. P72,000
30. A, a VAT-registered, made the following purchases during the month of January 2014
Goods for sale, inclusive of VAT P224,000
Supplies, exclusive of VAT 20,000
Office air conditioner, total invoice amount 56,000
Home appliance for residence, gross of VAT 17,600
Repair of store, total invoice amount evidenced by
ordinary receipt of the contractor 4,400
Creditable input taxes are
a. P26,400 b. P29,400 c. P24,000 d. P32,400
 31. A taxpayer registered under the VAT system on January 1, 2014. His records during the month show
Value of inventory as of Dec. 31,2013, purchased from VAT registered persons P50,000
VAT paid on inventory as of Dec. 31, 2013 6,000
Value of inventory as of Dec 31,2013, VAT exempt goods 60,000
Sales, net of VAT 140,000
Sales, gross of VAT 45,000
Purchases, net of VAT 70,000

The output VAT is?

VAT payable is
a. P11,100 b. P7,221 c. P3,100 d. P18,100
32. A VAT taxpayer purchased the following machineries for the second quarter of 2014 (vat not included)
Life Cost
April 10 4 years 800,000
April 20 5 years 1,000,000
May 14 3 years 600,000
May 20 2 years 400,000
June 10 3 years 600,000
June 15 6 years 1,200,000

I. The input tax for April is

a. P216,000 b. P4,000 c. P98,000 d. P122,000
II. The input tax for May is
a. P124,000 b. P120,000 c. P8,000 d. P4,000
III. The input tax for june is
a. P4,400 b. P8,400 c. P216,000 d. P146,000
IV. The input tax for the quarter ending June is
a. P126,400 b. P134,400 c. P136,400 d. P12,400
33. The following are the data of City Appliance Marketing Corporation for the last quarter of 2013
Sales up to December 15, total invoice value P336,000
Purchases up to December 15, net of input tax 215,000
Additional information:
On December 16, 2013, City appliance Marketing corporation retired from its business and the inventory valued
at P190,000 was taken and transferred to New City Appliance Corporation. There is a deferred input tax from
the third quarter of P3,500.

How much is the output VAT?

How much is the total VAT due and payable by City Appliance Marketing Corporation in its operations in the last
quarter and its retirement from business
a. P22,500 b. P3,500 c. P6,350 d. P29,500
34. Assuming that New City Appliance Corporation has the following data for the first quarter of 2014:
Sales, total invoice value P448, 000
Purchases, total invoice value 224,000
How much is the VAT payable of New City Appliance Corporation for the first quarter of 2014?
a. P28,000 b. P1,200 c. P30,000 d. P24,000

35. ABC, a VAT-registered taxpayer had the following cumulative data for the 1 st quarter of 2014 (vat not included):

January February March

Sales P1,000,000 P2,400,000 P3,800,000
Purchases from VAT suppliers 400,000 900,000 1,400,000
Purchase of machinery from VAT suppliers (3yrs life) 1,200,000
I. The VAT payable for January is
a. P172,000 b. P60,000 c. P12,000 d. P0
II. The VAT payable for February is
a. P176,000 b. P104,000 c. P32,000 d. P16,000
III. The VAT payable for March is
a. P104,000 b. 108,000 c. P288,000 d. P280,000
36. A refining company manufactures refined sugar. It had the following data during the first quarter of 2014

Sale of refined sugar, net of VAT 2,000,000

Purchases from farmers of sugar cane used in the manufacture of refined sugar 500,000
 Purchases of packaging materials, gross of VAT 784,000
Purchases of labels, gross of VAT 112,000
The Vat payable is
a. P124,000 b. P112,500 c. P70,000 d. P62,000
37. A is a VAT-registered dealer of appliances. The following data are for the last quarter of 2014
Sales, net of output tax P6,800,000
Purchases, net of input tax 5,500,000
Sales return 200,000
Purchase return 300,000
Deferred input tax (carried over from the third quarter of 2014) 9,500

The Output VAT is?

The VAT payable for the last quarter of 2012 by A is

a. P120,500 b. P70,500 c. P80,000 d. P158,500
38. A corporation, a VAT manufacturer submitted the following data for the last month of 2014 (all figures are at
total invoice value):
Materials purchased P280,000
Purchase returns 16,800
Sales, local 336,000
Sales return, local 22,400
Foreign currency denominated sales 170,000
Purchases from BOI registered enterprise 31,360

The output vat is?

The VAT payable is

a. P18,900 b. P21,600 c. P1,630 d. P2,040
39. A VAT registered person is engaged in a sale of VAT taxable goods and at the same time is also engaged in non-
VAT business, in the same business establishment. During the year, total sales of the VAT business amounted to
P336,000. The sales of non-VAT business amounted to P200,000 with a separate percentage tax of P6,000 for a
total of 206,000. During the same quarter, repairs on the building amounted to P50,000 plus value-added tax of
P6,000. Supplies purchased for common use amounted to P10,000 plus P1,200 VAT. The creditable input tax is
a. P6,000 b. P7,200 c. P1,000 d. P4,320
40. Using the above data, the VAT payable is
a. P24,000 b. P25,000 c. P31,680 d. P26,400
41. M, building contractor showed to you the following data
Contract price, net P5,000,000
Cash received (VAT included) 2,240,000
Receivables 3,000,000
Advances on other contracts still unearned (w/o VAT) 1,000,000
Payments (VAT excluded)
For materials 500,000
For supplies 100,000
For operating expenses 200,000
For services of sub-contractors (VAT included) 1,680,000

The output Vat is?

The VAT payable is

a. P108,000 b. P348,000 c. P350,000 d. P12,000
42. A, a CPA had the following data for the month (VAT not included)
I. On professional services
Collections P280,000
Receivables 120,000
II. Amounts received from clients as reimbursements for expenses chargeable to clients:
Billed to clients by a VAT suppliers 30,000
Billed to A by VAT suppliers 20,000
III. Payments to:
VAT suppliers 60,000
Non-VAT suppliers 20,000
IV. Salaries of office personnel 18,000
V. Purchase of office equipment (6 years life) 1,200,000
 The output vat is?

Determine the VAT due (excess input tax) for the month
43. A, a VAT taxpayer billed his customer:
Selling price 500,000
Value added tax 70,000
Total 570,000
The output tax is
a. P70,000 b. P60,000 c. 61,070 d. 68,400
44. The records of A, a VAT taxpayer show
October November December
Output Tax P196,000 P180,000 P260,000
Input Tax 108,000 190,000 210,000
There was an excess of input taxes over output taxes of P50,000 for the quarter ending September 2014. Determine the
VAT due for October, November and for the quarter.

45. The records of DEF, a building contractor, for April shows (vat not included):
I. Five Storey Building:
a. Contract Price P20,000,000
b. Cash Receipts (for work done):
i. Labor 4,000,000
ii. Materials 6,000,000
II. Four storey building:
a. Contract price 16,000,000
b. Cash receipts (no work done yet):
Advances 2,000,000
III. Cash payments to (for five storey building):
a. Sub-contractors 1,200,000
b. Materials 2,400,000
c. Supplier of equipment (8 years life) 1,000,000
The output vat is?

Determine the VAT due for April

46. A domestic common carrier by air has the following data for the month: (exclusive of business taxes)
Gross receipts from transport of passengers from Manila to Cebu 2,000,000
Gross receipts from transport of passengers from Manila to Hongkong 2,500,000
Gross receipts from transport of goods and cargo from Manila to Cebu 1,500,000

a. How much is the common carrier’s tax for the month?

b. How much is the VAT-subject gross receipts?
c. How much is the output VAT, if any?

47. A, a non-VAT registered taxpayer who started his business on February 14, 2015 had the following (net of tax)
for 2018:
Cumulative sales Vat paid to suppliers
February 14 to September 30 2,500,000 420,000
Oct 1 to Oct 31 3,200,000 560,000
Nov 1 to Nov 30 4,500,000 435,000
Dec 1 to Dec 31 4,900,000 400,000

On November 8, 2015, A registered as Vat-registered taxpayer. Ignoring transitional input tax,

a. For the month of October, A will pay business tax amounting to?
b. For the month of November, a will pay business tax amounting to?
c. For the quarter ending, December, A will pay business tax amounting to?

48. Lola Immaculada, 63 years old grandmother, was treated by her grandchildren Conrado, Crispin and Pedro to
Max’s restaurant during grandparents day and their bill is P2,240.00
a. How much is the discount of the senior citizen?
b. How much is the VAT?
c. If the seller is a non-vat enterprise, how much is the discount of the senior citizen?
d. Amount payable to the restaurant is?

49. Johnny Company, a maintenance contractor, had the following receipts from the following clients in June 2019:
 Receipt from Development Bank of the Philippines 1,000,000
Receipts from Oceana, an international carrier 1,200,000
Receipts from International Rice Research Institute 800,000

Compute the total zero-rated sales or receipts.

50. Legaspi Corporation has the following sales in March 2020:

Sale to an export-oriented enterprise 2,000,000

Sale to a BOI-registered enterprise 3,000,000

Assuming that the new VAT refund System is already in place, compute the total effectively zero-rated sales.

“I tell you solemnly, whatever you ask for in prayer, believe that you have received it, and it will be yours”
-Mark 11:24

References:
CPA Review School of the Philippines
Business and Transfer Taxation by Rex Banggawan
Review School of Accountancy