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VAT Quizzer
VAT Quizzer
TAXATION
VALUE ADDED TAX QUIZZER
EXERCISE PROBLEMS
1. The records of A, a VAT taxpayer show
Novem Decemb
October ber er
P180,00
Output Tax P96,000 0 P60,000
Input Tax 108,000 72,000 48,000
There was an excess of input taxes over output taxes of P50,000 for the quarter
ending September 2006. Determine the VAT due for October, November and for the
quarter.
2. The following data are taken from the books of accounts of a VAT-registered taxpayer:
Third quarter: Sales P 1,000,000
Purchases 800,000
Excess input VAT as of end of second quarter25,000
Fourth quarter: Sales 1,500,000
Purchases 1,100,000
How much is the VAT payable for the third and fourth quarters?
4. ABC, a VAT – registered taxpayer had the following cumulative date for the 1 st quarter
of 2014 (VAT exclusive)
Janu Febru Mar
ary ary ch
P P P
1,000,00 240000 3,800,00
Sales 0 0 0
1,400,00
Purchase from VAT suppliers 400,000 900,000 0
Purchase of machinery from vat suppliers 1,200,0
(3years life) 00
Determine the VAT payable for the monthly and quarterly returns
6. A VAT subject real estate dealer sold a residential lot on January 15, 2014. The
following information made available on the terms of the sale:
Gross selling price 3,000,000
Initial payments in 2014 (consisting of down
payments and installments in the year of sales) 900,000
Balance to be paid in equal annual installments starting Feb 15, 2015 2,100,000
Taxation by Rex B. Banggawan,CPA, MBA Page 1 of 16
CDD Quizzer on Value Added Tax
7. ABC Corporation sold a parcel of land to XYZ Company on July 2, 2014 for 1,000,000
plus the output VAT, with a monthly installment payments of 10,000, plus the output
VAT. The zonal value of the subject property at the time of sale amounted to
1,500,000.
How much is the output tax on the installment payment?
8. The following information taken form the books of a VAT-registered enterprise was
provided to you:
Domestic sales of goods P 3,000,000
Sales of packaging materials to an export oriented enterprise whose
export sales exceeds 70% of the total annual production2,000,000
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
Required:
1. How was the total taxable sales?
2. How much was the output tax?
9. The records of DEF, a building contractor, for April shows (vat not included):
11.The following are the data of City Appliances Marketing Co. for the last quarter of
2014 (CPA Exam Modified):
Sales up to December 15, total invoice value 319,200
Purchases for November up to December 15, net of input taxes 215,000
Additional information: On December 16, 2014, the City Appliances Marketing Co.
retires from its business and the inventory valued at 190,000 (acquisition cost,
200,000) is taken and transferred to New City Appliances Co. There is a deferred
input tax from the third quarter of 3,500.
How much is the total value-added tax due by the City Appliances Marketing Co. in its
operations in the last quarter and its retirement form business?
12.A taxpayer registered under the VAT system on January 2, 2014 after his sales
exceeded 1,919,500 in the previous year. He became subject to VAT for the first time.
The following selected data were taken from his books:
Inventory, December 31, 2013 purchased from VAT-registered seller:
Cost P 60,000
Net realizable value 50,000
VAT paid on December 31, 2013 inventory 6,000
Inventory, December 31, 2013 purchased from VAT-exempt seller 80,000
13.Sweet Tooth, Inc. manufactures refined sugar. The following selected data are taken
form its books:
Sale of refined sugar, net of VAT P 2,000,000
Purchase of sugar cane from farmers 500,000
Purchases of packaging materials, gross of VAT 784,000
Purchases of labels, gross of VAT 112,000
Advance payment of VAT before release from refinery 60,000
How much is the VAT payable?
DRILL QUESTIONS
1. Value Added Tax is a/an
a. Indirect Tax b. Direct Tax c. Local Tax d. Personal Tax
2. 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
3. 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
4. It means the VAT due or paid by a VAT-registered person on importation of goods or
local purchases of goods, properties or services, including lease or use of properties,
in the course of trade or business
a. Output tax b. Input tax c. Deferred input tax d. VAT payable
5. 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
6. 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
7. 1st Statement – Any person who, in the course of his trade or business, sells, barters,
exchanges or leases goods or properties, or renders service, and any person who
import goods, shall be liable to VAT
2nd Statement - In the case of importation of taxable goods, the importer, whether an
individual corporation and whether or not made in the course of his trade or
business, shall be liable to VAT
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct
8. 1st Statement – For VAT purposes, a taxable person is any person liable for the
payment of VAT, whether registrable in accordance with the tax code.
2nd Statement – The status of a “VAT – registered person” as a VAT – registered person
shall continue until the cancellation of such registration
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct
9. Who is the one statutorily liable for the payment of VAT?
a. Buyer b. Seller c. Consumer d. None of the choices
10.1st Statement: The term “in the course of trade or business” means the regular
conduct of pursuit of a commercial or economic activity, excluding transactions
incidental thereto, by person who operate business solely for profit
17.In case of sale, barter or exchange or real property subject to VAT, the term “fair
market value” shall mean:
a. the fair market value as determined by the Commissioner of Internal Revenue
(zonal value)
b. the fair market value as shown in the schedule of values of the Provincial and City
Assessor (real property tax declaration)
c. whichever is lower between the zonal value and the value per real property tax
declaration
d. whichever is higher between the zonal value and the value per real property tax
declaration
18.1st statement: If the gross selling price is based on the zonal value or market value of
the property, the zonal or market value shall be deemed inclusive of VAT.
2nd statement: If the VAT is not billed separately, the selling price stated in the sales
document shall be deemed to be inclusive of VAT
a. Both statements are correct c. Only the first statement is correct
Taxation by Rex B. Banggawan,CPA, MBA Page 5 of 16
CDD Quizzer on Value Added Tax
b. Both statements are incorrect d. Only the second statement is correct
19.First statement: “VAT-exempt transactions” refer to the sale of goods or properties
and/or services and the use or lease of properties that is not subject to VAT (output
tax) and the seller is not allowed any tax credit of VAT (input tax) on purchases.
Second statement: The person making the exempt sale of goods, properties or
services shall not bill any output tax to his customers because the said transaction is
not subject ot VAT.
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct
20.Which of the following goods when sold or imported shall not be exempt from VAT?
a. agricultural and marine foods products in their original state
b. livestock and poultry of a kind generally used as, or yielding or producing foods for
human consumption
c. breeding stock and genetic materials therefore
d. processed or manufactured agricultural and marined food products
21.Which of the following shall be considered livestock for VAT-exempt transactions
purposes?
I – cows II – bulls and calves III – pigs IV – sheep V – goats VI – rabbits
a. all of the above c. all of the above except VI
b. none of the above d. I, II and III only
22.Which of the following shall not be considered as poultry for VAT-exempt transactions
purposes?
a. Fowls b. ducks and geese c. fighting cocks d. turkey
23.Which of the following are not considered livestock or poultry for VAT-exempt
transactions purposes?
I – fighting cocks II – race horses II – zoo animals IV – other animals
generally considered as pets
a. I, II, III and IV b. I, II, and III only c. I and II Only d. II, III and IV
only
24.Marine food products shall include fish and crustaceans, such as, but not limited to
which of the following?
I – eels II – trout III – lobster IV – shrimps V – prawns VI – oysters
VII – mussels VIII – clams
a. All of the above c. III, IV and V only
b. None of the above d. VI, VII and VIII only
25.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
26.Taxpayer operates a Grocery Store and is not – VAT registered. His annual gross sales
amounted to P1,500,000 for the year although his operations resulted to net loss for
the year 2006. He is subject to
a. 3% OPT b. VAT c. MCIT - 2% d. None, operation is a
loss
27.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 transactions
d. Entities which are exempt from income tax are also exempt from VAT
28.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 grapes for sale
29.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. Sales of newspaper
Taxation by Rex B. Banggawan,CPA, MBA Page 6 of 16
CDD Quizzer on Value Added Tax
30.Meat, fruit, fish, vegetables and other agricultural and marine food products shall be
considered in their original state even if they have undergone the simple process of
preparation or preservation for the market. Which of the following shall be considered
as simple processes of preparation or preservation for the market?
I – freezing II – drying III – salting IV – broiling V – roasting VI – smokingVII –
stripping
a. all of the above c. I, II, III, and IV only
b. None of the above d. All of the above except IV and V
31.Meat, fruit, fish and vegetables and other agricultural and marine food products shall
be considered in their original state even if they have undergone advanced
technological means of packaging. Which of the following shall not be considered as
advanced technological means of packing?
a. shrink wrapping in plastics c. tetra-pack
b. vacuum packing d. freezing
32.Which of the following shall be considered as agricultural products in their original
state and shall be exempt from VAT?
I – polished and/or husked rice III – raw cane sugar and molasses V – copra
II – corn grits IV – ordinary salt VI – bagasse
a. I, II, III, IV, V and VI c. I and II only
b. I, II, III, IV and V only d. III and IV only
33.Which of the following sale or importation of goods shall not be exempt from VAT?
a. fertilizers
b. seeds, seedlings and fingerlings
c. fish, prawns, livestock and poultry feeds, including ingredients, whether locally
produced or imported, used in the manufacture of finished feeds
d. specialty feeds
34.This refers to non-agricultural feeds and foods for race horses, fighting cocks,
aquarium fish, zoo animals and other animals generally considered as pets
a. Fertilizers c. specialty feeds
b. fish, prawn, livestock and poultry feeds d. pet feeds
35.Which of the following goods when imported shall not be exempt from VAT?
I – vehicle II – vessel III – aircraft IV – machinery
V – other goods for use in the manufacture of products VI – merchandise of any kind
in commercial quantity
a. All of the above c. I, II, III and IV only
b. None of the above d. V and VI only
36.First statement: Services subject to (other) percentage taxes shall not be subject to
VAT.
Second statement: services by agricultural contract growers and milling for others of
palay into rice, corn into grits, and sugar cane into raw sugar are exempt from VAT
a. both I and II are correct c. Only I is correct
b. neither I nor II is correct d. Only II is correct
37.This refers to those persons producing for others poultry, livestock or other
agricultural and marine foods products in their original state
a. agricultural contract growers c. agricultural operators
b. millers d. fishpond operators
38.First statement: Medical, dental, hospital and veterinary services, including
laboratory services, except those rendered by professionals are exempt from VAT
Second statement: if the hospital or clinic operates a pharmacy or drug store, the sale
of drugs and medicine is subject to VAT
a. both I and II are correct c. Only I is correct
b. neither I nor II is correct d. Only II is correct
39.Educational services are exempt from VAT if rendered by:
I – private educational institutions duly accredited by DepED, CHED and TESDA
II – government educational institutions
a. both I and II are correct c. Only I is correct
b. neither I nor II is correct d. only II is correct
40.The exemption from VAT of educational services does not include:
I – seminars II – in-service trainings III – review classes
IV – other services rendered by persons who are not accredited by DepEd, the CHED
and/or the TESDA
Taxation by Rex B. Banggawan,CPA, MBA Page 7 of 16
CDD Quizzer on Value Added Tax
a. I, II , III and IV b. I, II, III only c. I and II only d. IV
only
41.Which of the following shall not be exempt from VAT?
a. services rendered by individual pursuant to an employer-employee relationship
b. services rendered by regional or area headquarters established in the Philippines
by multinational corporations which act as supervisory communications and
coordinating centers for their affiliates, subsidiaries or branches in the Asia pacific
region and do not earn or derive income from the Philippines
c. Transactions which are exempt under international agreements to which the
Philippines is a signatory or under special laws
d. Services rendered by professionals such as CPAs, engineers, lawyers, etc.
49.1st statement – The term “effectively zero-rated sale of goods and properties” shall
refer to the export sale of goods and properties by a VAT-registered person to a person
or entity who was granted indirect tax exemption under special laws or international
agreement
2nd statement – Except for export sales and foreign currency denominated sale, other
cases of zero-rated sales shall require prior application with the appropriate BIR office
for effective zero-rating and without and approved application for effective zero-
rating, the transaction otherwise entitled to zero-rating shall be considered exempt
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct
50.Which of the following sales requires price application with the appropriate BIR office
for zero rating?
a. Export sales c. Sales to Asian Development Bank
b. Foreign currency denominated sales d. None of the choices
51.Which of the following shall not be considered “deemed sale” pursuant to the Tax
Code?
a. Transfer use or consumption not in the 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 in the profits of VAT-registered
person or creditors in payment of debt or obligation
c. Consignment of goods if actual sale is made within 60 days following the date such
goods were consigned
d. Retirement from or cessation of business with respect to all goods on hand,
whether capital goods, stock-in-trade, supplies or materials as of the date of such
retirement or cessation whether or not the business is continued by the new owner
or successor
52.1st statement: Transfer of goods or properties not in the course of business can take
place when VAT-registered person withdraws goods from his business for his personal
use
2nd statement: Property dividends which constitute stocks in trade or properties
primarily held for sale or lease declared our of retained earnings on or after January
1, 1996 and distributed by the company to its shareholders shall be subject to VAT
based on the zonal value or fair market value at the time of distribution, whichever is
applicable
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct
87.A, trader, made the following sales of goods during the month of June 2007, exclusive
of VAT:
Cash sales P200,000
Open Account Sales 100,000
Installment Sales 100,000
Note: Receipt from installment sales 40,000 Compute the
Consignment made (net of VAT): output VAT.
June 15, 2007 100,000 a. P52,800
May 15, 2007 100,000 b.
April 15, 2007 100,000 P48,000
c.
P60,000 d. P67,200
88.A, a VAT – registered, made the following purchased during the month of January
2007
P
Goods for sale, inclusive of VAT 224,000
Supplies, exclusive of VAT 20,000
Office air conditioner, total invoice amount 56,000
Home appliances for residence, gross of VAT 17,600
Repair of store, total invoice amount
evidenced by
ordinary receipt of the contractor 4,400
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