Name: Date:

Course/Yr.: Score

I. True or False. Write T if the statement is correct and F if the statement is incorrect.
F 1. Sellers of services are subject to VAT on their gross sales or receipts.
T 2. A person who exceeded the VAT threshold in any 12-month period must register as a VAT
taxpayer.
F 3. Sellers of goods are subject to VAT on their gross receipts.
T 4. A VAT registered person is exempt from VAT on VAT exempt sales.
F 5. The VAT payable on zero-rated sales is always zero.
F 6. Consignment is deemed sold if not returned by the consignee in 30 days.
F 7. To be zero-rated, all forms of export sales must be paid for in acceptable foreign currencies.
T 8. A person with vatable sales or receipts not exceeding the VAT threshold may register as a non-
VAT taxpayers.
T 9. The vatable inventories and properties of a VAT taxpayer upon retirement or cessation of
business are subject to VAT as demeed sales.
T 10. Exempt sales shall not be billed with an output VAT.
F 11. The threshold for franchise grantees of electricity is P10,000,000.
F 12. VAT exemption results in total tax relief while zero-rating results in partial tax relief.
F 13. VAT is paid in three monthly installments similar to percentage tax.
F 14. Sellers of properties are subject to VAT on their fair market value of the property sold or
disposed of.
F 15. If the selling price exceeds the fair value, the basis of the output VAT is the fair value.
T 16. The VAT threshold for sellers of goods and services is P3,000,000.
F 17. Input taxes on zero-rated sales are deductible as part of costs or expenses.
T 18. Input taxes on zero-rated sales are claimable as tax credit or tax refund.
F 19. Gross receipt means collections including evidences of indebtedness such as promissory notes
given by the client.
F 20. Export sales shall be billed with output VAT.
F 21. The export sale of a VAT taxpayer is an exempt sale.
F 22. Client expenses reimbursed by the client to the business taxpayer are part of the gross receipt.
T 23. As a rule, effectively zero-rated sales require prior application with the BIR for zero-rating.
T 24. Sales to tax-exempt persons will be subject to 12% VAT in default of an approved application
for zero-rating.
T 25. The VAT applies on receipts or sales other than those exempted and those specifically subject to
percentage tax.
F 26. A registrable person is exempt from VAT.
F 27. A VAT registered person shall be subject to a final withholding VAT of 12% on sales to the
government.
F 28. A standard input VAT is 5% of government sales.
F 29. The sale to a local export oriented enterprise is subject to zero-rating only if paid for in
acceptable foreign currencies.
T 30. When a business changes its trade name, vatable items or properties in its possession shall be
deemed sold at the date of change.
T 31. Exempt sales which are billed as regular sales shall be considered as regular vatable sales.
T 32. For purposes of the VAT, fair value of the real property means the higher of independent
appraisal value and zonal value.
F 33. The installment reporting of output VAT on services is as allowed so long as the initial
payments do not exceed 25% of the agreed contract price.
T 34. Export sales that are not paid for in acceptable foreign currencies are subject to the 12% VAT.
T 35. The claimable input VAT on government sales is 7% of the sales.
F 36. The direct export by an export trader shall be considered an export sales subject to 12% VAT.
F 37. The sale of an export trader to a fellow export trader is subject to zero-rated VAT.
F 38. The VAT payable of a VAT registered person is the output VAT without benefit of input VAT
plus 3% percentage tax.
T 39. The sale of properties considered ordinary assets is subject to output VAT.
T 40. Interest and penalties are subject to VAT in the months they are collected.
F 41. The commission income from export sales by export traders is exempt from VAT.
T 42. The sales to diplomatic missions are exempt from VAT.
T 43. A person who commences business with an expectation to exceed VAT threshold must register
 as a VAT taxpayer.
T 44. The donation of business properties considered ordinary assets by the business owner is a
transaction deemed sale.
F 45. The sale of goods or services to a domestic carries for its domestic operations is exempt from
VAT.
F 46. The VAT payable of any person is always 3% of the value added on the sales of goods.
T 47. The transport of domestic carriers of passengers, baggage and mails from the Philippines to a
foreign country is subject to zero-rated VAT.
T 48. The transaport of passengers by an international carrier from the Philippines to a foreign country
is exempt.
F 49. A VAT registered person is liable to VAT on exempt sales and services specifically subject to
percentage tax.
T 50. The sale of capital assets such as investments is not subject to output VAT.

II. Multiple choice:

1. The seller of goods had the following data during the month:
Sales invoice (total billed prices) 436,800.00
Total cash collections 380,800.00
Sales returns and allowances, billed price 11,200.00
Input VAT 14,000.00

Assuming the taxpayer is VAT-registered, compute the VAT payable.

a. P0 c. P31,600
b. P26,800 d. P35,600

Solution:
Gross Sales (436,800/1.12) 390,000.00
Sales returns and allowances, billed price (11,200/1.12) 10,000.00
Net sales 380,000.00
Rate 12%
Ouput VAT 45,600.00
Input VAT 14,000.00
VAT payable 31,600.00

2. The following sales and purchases were taken from the books of accounts of a VAT taxpayer:
April May June
Sales 625,000.00 400,000.00 600,000.00
Purchases 400,000.00 420,000.00 200,000.00

What is the VAT payable in April?

a. P75,000 c. P27,000
b. P48,000 d. P0

Solution:
Output VAT (625,000*.12) 75,000.00
Input VAT (400,000*.12) 48,000.00
VAT payable, April 27,000.00

3. What is the VAT payable in June?

a. P72,600 c. P48,000
b. P72,000 d. P45,600

Solution:
Output VAT (400,000*.12) 48,000.00
Input VAT (420,000*.12) 50,400.00
VAT payable, May (2,400.00)

Output VAT (600,000*.12) 72,000.00

Input VAT (200,000*.12) 24,000.00
Input tax carry over, May 2,400.00
VAT payable, June 45,600.00
 or
Output VAT (1,625,000*.12) 195,000.00
Input VAT (1,020,000*.12) 122,400.00
VAT payable, 2nd quarter 72,600.00
Payment made previous quarter (27,000.00)
VAT still due 45,600.00

4. A sale was invoiced by a VAT-seller at P500,000. Compute for the output VAT.
a. P0 c. P53,571
b. P50,000 d. P60,000

Solution:
Sales invoice 500,000.00
Divided by 1.12
Vatable amount 446,428.57
Rate 12%
Output VAT 53,571.43

5. A VAT-registered seller wishes to bill the sale of unprocessed meat for P50,000. At what amount should the
sale be billed?
a. P50,000 c. P53,571
b. P51,500 d. P56,000

6. A VAT-registered department store had an un-invoiced sale with the following selling prices:
1 cavan rice 2,500.00
Vegetables 1,500.00
Cooking oil 200.00
Noodles 1,300.00
Total sales 5,500.00

What should be the invoice price?

a. P5,500 c. P5,665
b. P5,545 d. P5,680

Solution:
Amount Output VAT Total
1 cavan rice 2,500.00 2,500.00
Vegetables 1,500.00 1,500.00
Cooking oil 200.00 24.00 224.00
Noodles 1,300.00 156.00 1,456.00
Total sales 5,500.00 180.00 5,680.00

7. A taxpayer had the following purchases of vatable goods, exclusive of VAT:

Puchases from non-VAT suppliers 180,000.00
Puchases from VAT suppliers 1,000,000.00
Total purchases 1,180,000.00

What is the input VAT?

a. P107,143 c. P126,429
b. P120,000 d. P141,600

Solution:
Puchases from VAT suppliers 1,000,000.00
Rate 12%
Input VAT 120,000.00

8. A non-VAT registered taxpayer purchased goods which was invoiced by the seller as follows:
Selling price 50,000.00
Ouput VAT 6,000.00
 Total invoice 56,000.00

What is the claimable input VAT?

a. P0 c. P6,720
b. P6,000 d. P7,200

9. A VAT taxpayer received a 5% creditable withholding tax plus P48,150 cash from a VAT invoice. What is
the output VAT?
a. P5,159 c. P5,373
b. P5,778 d. P5,400

Solution:
Cash received 48,150.00
Divided by 1.07
Vatable amount 45,000.00
Rate 12%
Output VAT 5,400.00

10. A VAT taxpayer received a sum of P74,900 and a P3,500 certificate of creditable withholding tax. What is
the output VAT?
a. P9,396 c. P8,400
b. P8,568 d. P8,988

Solution:
Cash received 74,900.00
Divided by 1.07
Vatable amount 70,000.00
Rate 12%
Output VAT 8,400.00

or

Cash received 74,900.00

CWT 3,500.00
Total invoice 78,400.00
Divided by 1.12
Vatable amount 70,000.00
Rate 12%
Output VAT 8,400.00

11. A non-VAT taxpayer sold goods for P20,000, half of which are paid by the buyer who gave a promissory
note for the balance. The output VAT is
a. P0 c. P2,400
b. P1,200 d. P4,800

12. A VAT taxpayer sold goods for P40,000 which excludes a P1,000 delivery charge and VAT. The buyer paid
P30,000 downpayment and promised pay the P11,000 balance plus the VAT in 30 days.

What is the output VAT?

a. P4,920 c. P3,600
b. P4,800 d. P0

Solution:
Goods 40,000.00
Delivery charge 1,000.00
Total 41,000.00
Rate 12%
Output VAT 4,920.00

13. A VAT taxpayer compiled the following for the purpose of filing his BIR form 2550M:
Sales to VAT taxpayers 200,000.00
 Sales to non-VAT taxpayers 150,000.00
Total 350,000.00

What is the output VAT?

a. P0 c. P24,000
b. P18,000 d. P42,000

Solution:
Sales to VAT taxpayers 200,000.00
Sales to non-VAT taxpayers 150,000.00
Total sales 350,000.00
Rate 12%
Output VAT 42,000.00

14. A VAT registered car dealer sold the following goods to a relative:
Selling price 300,000.00
Fair market value 500,000.00

What is the output VAT?

a. P0 c. P42,000
b. P36,000 d. P60,000

Solution:
FMV 500,000.00
Rate 12%
Output VAT 60,000.00

15. A non VAT taxpayer prepared the following summary of sales for the purpose of filing his BIR form 2551Q:
Sales to VAT taxpayers 200,000.00
Sales to non VAT taxpayers 150,000.00
Total 350,000.00

Compute the output VAT.

a. P0 c. P24,000
b. P18,000 d. P42,000

16. A VAT registered practicing lawyer disclosed the following during a month:
Total professional fees billed 800,000.00
Total professional fees collected 600,000.00
Advances by certain clients 200,000.00

Compute the output VAT.

a. P120,000 c. P72,000
b. P96,000 d. P88,286

Solution:
Total professional fees collected 600,000.00
Advances by certain clients 200,000.00
Total 800,000.00
Rate 12%
Output VAT 96,000.00

17. A VAT registered seller merely indicated an amount of P300,000 on a bill without separately indicating the
VAT thereon.

What is the output VAT?

a. P0 c. P36,000
b. P32,143 d. P40,000

Solution:
Billed amount 300,000.00
 Divided by 1.12
Vatable amount 267,857.14
Rate 12%
Output VAT 32,142.86

18. A VAT taxpayer had the following invoiced sales during the first quarter of 2020:
Jauary 280,000.00
February 347,200.00
March 313,600.00

What is the reportable output VAT respectively in January, February and March?
a. P33,600; P41,664; P37,632 c. P30,000; P37,200; P33,600
b. P33,600; P41,664; P112,896 d. P30,000; P37,200; P100,800

Solution:
January 280,000.00
Divided by 1.12
Vatable amount 250,000.00
Rate 12%
Output VAT, January 30,000.00

February 347,200.00
Divided by 1.12
Vatable amount 310,000.00
Rate 12%
Output VAT, February 37,200.00

1st quarter 940,800.00

Divided by 1.12
Vatable amount 840,000.00
Rate 12%
Output VAT, 1st quarter 100,800.00

19. A VAT registered seller had the following summary of sales and consignments in April:
Cash sales 200,000.00
Credit sales 150,000.00
Sales reported by consignees 250,000.00
Unsold January consignment 50,000.00
Unsold February consignment 30,000.00
Unsold March consignment 40,000.00
Unsold April consignment 65,000.00

Assuming that the rules on deemed sale was properly applied in prior months, what is the output
VAT for April?
a. P42,000 c. P78,000
b. P75,600 d. P81,600

Solution:
Cash sales 200,000.00
Credit sales 150,000.00
Sales reported by consignees 250,000.00
Unsold January consignment 50,000.00
Unsold February consignment 30,000.00
Total 680,000.00
Rate 12%
Output VAT 81,600.00

20. Cebu Ferries has a fleet of ships traversing the island of Bohol and Cebu. It reported the following total
receipts during a month:
Transport of passengers 8,000,000.00
Transport of cargoes and baggage 1,000,000.00
Total 9,000,000.00

Compute the output VAT

a. P0 c. P960,000
b. P120,000 d. P1,080,000

Solution:
Transport of passengers 8,000,000.00
Transport of cargoes and baggage 1,000,000.00
Total 9,000,000.00
Rate 12%
Output VAT 1,080,000.00