Business Taxation

Chapter 7 - Business Taxes (Group 5)

1. it is the total amount of money or its equivalent which the purchaser pays

or is obligated to pay to the seller in consideration of the sale.

A. Gross Selling Price

B. Gross Receipts
C. Constructive Receipts
D. None of the above

2. this refer to the total amount of money or its equivalent representing the
contract price, compensation, service fee, rental, or royalty.

A. Gross Selling Price

B. Gross Receipts
C. Constructive Receipts
D. None of the above

3-4 : Vat registration is classified into two (2)

A. Mandatory Registration and Optional Registration

B. Mandatory Registration for husband and wife
C. Mandatory Registered and non vat threshold for husband and wife
D. Entity registration and spouse registration
5. Husband and wife are not separated tax payers.

A. True
B. False
C. Maybe
D. I don’t think so

6. it is the receipts that the taxpayers account has been credited without
actually receiving the cash physically.

A. Gross Selling Price

B. Gross Receipts
C. Constructive Receipts
D. None of the above

7. Transfer of the amounts retained by the payee to the account of the

contractor is an example of constructive receipts.

A. True
B. False
C. Maybe
D. I don’t think so

8. The excise tax, if any, on such goods or properties shall form part of the
gross selling price.

A. True
B. False
C. Maybe
D. I don’t think so

9. If there’s an mandatory registration in VAT, there’s also optional

registration.

A. True
B. False
C. Maybe
D. I don’t think so

10. In the case of sale, barter or exchange of _______ subject to VAT,

gross selling price shall mean the consideration stated in the sales
document or the fair market value, whichever is higher.

A. Gross Estate
B. Money
C. Receipts
D. Real Property

11. It is the article in the case of sale.

A. RR 4-2008; Section 3. 106-3, RR 15- 2007

B. RR 3-3007; Section 5. 108-5, RR 28-2004
C. RR 4-2007; Section 4. 106-4, RR 16-2005
D. RR 7-2009; Section 10. 103-9, RR 25-2006
12. It is the agreement price of buyer and seller to the selling price of an
item.

A. Gross Selling Price

B. Fair Market Value
C. Selling Price
D. Face Value

13. It is the vat due on the sale, lease or exchange of taxable goods or
properties or services by any vat registered person or non-vat registered
person but required to register under Section 236 of the Tax Code.

A.Output VAT
B.Other percentage Taxes
C.Excise Tax
D.None of the above

14. Development Corporation vat registered entity, leases a commercial

space to JC Corporation for P50,000 a month. JC will pay a total of P56,000
per month to the lessor.

Rent per month                     50,000

Add: 12% VAT (50k X 12% VAT) 6,000
Total amount due by JC 56,000

15. Mas Smart Tayo, is a non vat registered corporation rendered

professional services to Kate vat registered for P100,000. Annual gross
receipts of Mas Smart exceeded the P3,000,000 vat threshold during 2021.

16. How much is the total amount due by Kate to Mas Smart?

17. using the same assumption in the preceding question, how much is the
vat due/payable of Mas Smart to the BIR?

15-17 : 100,000
12,000

18. tax imposed on sale, barter, exchange or importation of goods, or sale

of services based upon gross sales, value in money of receipts derived by
the manufacturer, producer, importer or seller measured by certain
percentage of the gross selling price or receipts.

A.Output VAT
B. Other percentage Taxes
C. Excise Tax
D. None of the above

19. It is apply to goods manufactured or produced in the Philippines for

domestic sales or consumption or for any other disposition, and goods
imported.

A.Output VAT
B. Other percentage Taxes
C. Excise Tax
D. None of the above

20. non-resident foreign person performing isolated transaction in the

Philippines shall be liable to VAT.

A.True
B.False
C. Maybe
D. None of the above

21. Non-stock and non-profit private organizations which sell exclusively to

their members in the regular conduct or pursuit of commercial or economic
activity are exempt from value-added tax.

A.True
B.False
C. Maybe
D. None of the above

22. Government entities engaged in commercial or economic activity are

generally exempt from value added tax.

A.True
B.False
C. Maybe
D. None of the above

23. Excise tax is an addition to either VAT or percentage tax for businesses
manufacturing or importing excisable articles.

A.True
B.False
C. Maybe
D. None of the above

24. A VAT registered person is subject to VAT regardless of his annual

gross sales or receipts.

A.True
B.False
C. Maybe
D. None of the above

25. It is an indirect tax where ___________ is presumed.

A. Tax credit
B. Tax due
C. Tax shifting
D. VAT

26. To whom does the burden of tax borne?

A. Final Consumers
B. Primary costumers
C. Secondary costumers
D. Tertiary costumers

27. Output tax is less than input tax

A. Tax due
B. Tax credit
C. Input tax
D. Output tax

28. Output tax is greater than input tax

A. Tax credit
B. Input tax
C. Tax Due/Payable
D. Output tax

29. It is the method adopted in computing the Vat payable

A. Debit-Invoice method
B. VAT-invoice method
C. Tax-invoice method
D. Credit-Invoice method
30. VAT is a substantial portion of ______

A. Entity needs
B. Consumer expenditures.
C. Income
D. Merchandise

31. This is the section of tax code indicates that an indirect tax can be
shifted or passed on .

A. Section 5
B. Section 6
C. Section 7
D. Section 8

32. To what part of the government deos an entity files an INcome tax
returns?

A. Municipality/city hall
B. LTO
C. BIR
D. DOLE

33. It is the vat due on the sale, lease or exchange of a taxable goods.
A. VAT due/payable
B. Vat credit
C. Output tax
D. Input Tax

34. Is a vat due on or paid by VAT-Registered on importation or purchase of

goods

A. Input tax
B. Vat due/payable
C. Vat credit
D. Output tax

35. it is one of the statutorily liable to pay for the payment of tax

A. Buyer
B. Final consumer
C. Primary costumer
D. Seller

36. Transfer or shifter to consumers is not the _________ but the tax
burden.

A. Taxable cost
B. Liability to pay tax
C. Final tax to be paid
D. Value added tax

37. _______ are those imposed upon onerous transfers such as a sale,
barter, exchange and importation.

A. Estate Tax
B. Income Tax
C. Business Tax
D. Transfer Tax

38. Business Taxes are generally based on the taxpayer’s net taxable
income.

A. False
B. True
C. Maybe
D. All of the above.

39. Determine which of the following transactions are considered sale in the
ordinary course of trade, consequently subject to business tax:

I. Justiano sold his 1 year old book to Jofel.

II. Marvin an automotive parts reseller sold his house to a friend.
III. Mah Lee Nis a carwash company, rendered deep cleaning and detailing
services to 27 clients.
IV. Mia a dog owner had her dog rehomed for P12,000 because she was
about to go abroad.

A. I only.
B. II, III and IV.
C. I and III only.
D. III only.

40. These are transfers not subject to business tax but are subject to
transfer taxes.

A. Gratuitous Transfers
B. Transfer Tax Imposed
C. Heat Transfer
D. Onerous Transfers

41. ________ are generally not considered in the ordinary course of trade or
business.

A. Incidental Transactions
B. Accidental Transfers
C. Isolated Transactions
D. Accidental Fees

42. ________ are considered part in the ordinary course of trade or

business.

A. Incidental Transactions
B. Accidental Transfers
C. Isolated Transactions
D. Accidental Fees

43. Determine which of the following transactions is considered as being

rendered in the course of trade or business:

A. Pedro an American citizen sold his car to his friend in Florida for 25,000
USD.
B. Jopay a Filipino citizen and an established entrepreneur, residing in
France, had P350,000 worth of sales in her milktea shop in Manila.
C. Abdhul Makdum an Indian citizen went on a vacation in the Philippines.
D. Juan sold his vehicle acquired 3 years ago for 40,000 Yen to his friend
Yu Lee.

44. Which of the following is an example of an onerous transfer?

A. Preya gave her mother P300,000 worth of beauty products coming from
her beauty product line.
B. June donated his 20-hectare land to Lingkod Bayan Charity.
C. Mercedes transferred P25M to her friend in Germany.
D. Ropalito gave Raymark P200,000 in exchange of 10% of Raymark’s
company earnings.

45. Irrespective of results of business operations, taxpayers engaged in

trade are still liable to pay for income taxes.

A. True
B. False
C. Maybe
D. All of the above.

46. Onerous transfers not part of the ordinary course of trade or business
are subject to business taxes.

A. True
B. False
C. Maybe
D. All of the above.

47. Business taxes are those imposed upon gratuitous transfers such as a
sale, barter, exchange and importation.

A. False
B. True
C. Maybe
D. All of the above.

48. The taxes that businesses must pay as a normal part of business
operations are called transfer taxes.

A. True
B. False
C. Maybe
D. All of the above
49. refers to all properties held primarily for sale to customers or held for
lease in the ordinary course of trade or business of the seller

a. sales of goods
b. sales of services
c. sales of real properties
d. none of the above

50. any person who, in the course of his trade or business, sells, barters,
exchanges or leases goods or properties, or renders services, and any
person who imports goods, shall be liable to VAT

a. sale in the ordinary course

b. importation
c. sale of services
d. sale of properties

51. it is tax on the value added by every seller to the purchase price or cost
in the sale or lease of goods

a. business tax
b. transfer tax
c. excise tax
d. VAT

52. "cross border doctrine" means that no VAT shall be imposed to form
part of the cost of goods destined for consumption inside the territorial
border of the Philippine taxing authority

a. true
b. false
c. maybe
d. sometimes

53. in the case of importation of taxable goods, the importer, whether an

individual but not a corporation made in the course of his trade or business
shall be liable to VAT

a. true
b. false
c. maybe
d. sometimes

54. real properties held primarily for sale to customers or held for lease in
the ordinary course of trade or business

a. true
b. false
c. maybe
d. sometimes

55. the term "goods or services" defined as all tangible and intangible
objects which are capable of pecuniary estimation

a. true
 b. false
c. maybe
d. sometimes

56. this means the performance of all kinds of services in the Philippines for
others for a fee, remuneration or consideration, whether in kind or in cash

a. sales of goods
b. sales of services
c. sales of properties
d. all of the above

57. such payments in sale of services may be collected in advance or after

the service is rendered

a. true
b. false
c. maybe
d. sometimes

58. VAT on sales of services is a tax on payments for services rendered in

the exercise of profession or calling

a. true
b. false
c. maybe
d. sometimes
59. in the case of sale of real properties on the installment plan, real estate
dealer shall be subject to VAT on installment payment, including interest
and penalties

a. true
b. false
c. maybe
d. sometimes

60. it is a tax on consumption levied on the sale, barter, exchange or lease

of goods or properties and services

a. business tax
b. excise tax
c. donors tax
d. VAT

61. What is the basis of VAT for the sales of goods or properties.

A. Gross Selling Price

B. Gross Receipts
C. Gross Income
D. Total Landed Cost

62. The following are kinds of value added taxes, which is not included.
A. Vat on importation of goods
B. VAT on sale of goods or properties
C. VAT on exchange of foreign currencies
D. VAT on sale of services

63. Sellers of services are subjected to VAT on their gross sales or receipts.

A. True
B. False
C. Maybe
D. All of the above

64. How many percent of VAT in Philippines

A. 10%
B. 12%
C. 20%
D. 15%

65. Which of the following is subjected to 12% value added tax.

A. Importation
B. Sale of services
C. Sales of goods or properties
D. All of the above
66. What is the basis of Sale of Services.

A. Gross Selling Price

B. Gross Income
C. Gross Receipts
D. Total Landed Cost

67. What does the acronym VAT stand for.

A. Value And Tax

B. Value Added Tax
C. Variety Added Tax
D. Value Added To

68. What id the tax base of importation.

A. Gross Selling Price

B. Gross Receipts
C. Total Landed Cost
D. Gross Income

69. Gross receipt means collections including evidences of indebtedness

such as promissory notes given by the client. (except notes).

A. True
B. False
C. Maybe
D. All of the above

70. The term “goods or properties” includes real properties held primarily for
sale, lease or use in the ordinary course of business.

A. True
B. False
C. Maybe
D. All of the above

71. Sellers of goods are taxable on gross receipts while sellers of services
are taxable on gross selling price.

A. True
B. False
C. Maybe
D. All of the above

72. The sale of radio, television, satellite transmission and cable television
time is a sale of service not a sale of goods or properties.

A. True
B. False
C. Maybe
D. All of the above
73. There are three major business taxes in the Philippines namely value
added tax, percentage tax, existing tax.

a. True
b. False

74. All sale of goods or services made in the normal course of trade or
business are subject to vat unless exempt under the law.

a. True
b. False

75. If the sale is exempt from vat, it may be subject to Other Percentage
Tax.

a. True
b. False

76. Transactions already subjected to vat should no longer be subject to

Percentage Tax.

a. True
b. False

77. Transaction subjected to either vat or percentage tax may not be

subjected to excise tax.
a. True
b. False

78. What is applicable business tax for Jeepney operation .

a. Vat
b. Percentage tax
c. Excise tax
d. Vat and percentage tax

79. A transaction subjected to value added tax must no longer be subjected

to percentage tax.

a. True
b. False

80. What is applicable business tax for sale of cigarette.

a. Vat
b. Percentage tax
c. Excise tax
d. Vat and percentage tax

81. What is applicable business tax for manufactured alcohol.

a . Vat
b. Percentage tax
c. Excise tax
d. Vat and percentage tax

82. May the BIR subject the company to 12% vat in addition to
Percentage tax?

a. Yes
b. No
c. Both a and b
d. None of the above

83. May the BIR subject the sale of ABC Corporation to Percentage tax in
addition to vat?

a.Yes
b. No
c. Both a and b
d. None of the above

84. What is another name for excise tax.

a. Hiden tax
b. Hiden levy
c. Hidden tax
d. Hidden levy
85. Which one is not belong to the power of the commissioner to suspend
business operation.

A. Failure to issue receipts or invoices

B. Failure to file VAT RETURN
C. UNDERSTATEMENT of taxable sales or receipt by 10% or more of the
correct taxable sales or receipt for the taxable quarter
D. Failure of any person to register as required under the law