BUSINESS TAXES QUIZZER

BSA (EDMODO)
Instructions: Write your answers on a sheet of paper, and your solutions in another sheet (for questions requiring
computations only). Take a clear picture and send your answers to your instructor. God bless.

VALUE-ADDED TAX AND PERCENTAGE TAXES

1. One of the following is not a major business internal revenue tax in the Tax Code
a. Value-added tax;
b. Excise tax;
c. Income tax;
d. Percentage tax.

2. The account title to best reflect the value-added tax on a purchase:

a. Sales tax payable:
b. Value-added tax payable.
c. Input tax;
d. Output tax.

3. Charlie is an operator of parking lots. What business tax is due on his income from the business?
a. Broker's tax;
b. Common carrier's tax;
c. Caterer's tax;
d. Value-added tax

4. Gross receipts tax (GRT) is a business tax paid by a

a. Hotel operator
b. Insurance company:
c. Franchise holder
d. Bank

5. Three (3) of the following are exempt from the value-added tax. Which is the exception?
a. Sales or importation of medical, dental and veterinary medicines
b. Services rendered by persons subject to percentage tax
c. Receipts from leasing of real properties,
d. Export sales by persons who are not value-added tax registered.

6. The X Cooperative is requesting the Bureau of Internal Revenue 'to exempt it from the payment of the value-
added tax on its purchases of prime commodities from suppliers and manufacturers for the reason that it is
enjoying exemption from all taxes under the Cooperative Code of the Philippines.
Statement 1 The X Cooperative is not subject to the value-added tax because the tax is imposed by law on the
seller and not on the buyer,
Statement 2. The VAT component of any purchase is not a tax on the cooperative, but a part of its cost of
purchase; hence there is no tax to complain of.
a. True, true
b. False, false:
c. True, false
d. False, true.

7. Which statement is wrong? Transactions considered "in the course of trade or business", and therefore subject
to the business taxes include
a. Regular conduct or pursuit of a commercial or an economic activity by a stock private organization;
b. Regular conduct or pursuit of a commercial or an economic activity by a non-stock, non-profit private
organization
c. Isolated services in the Philippines by non-resident foreign persons
d. isolated sale of goods or services for a gross selling price or receipts P800,000.

8. How much is the value-added tax in each of the following cases?

a. Selling price, VAT not included, of P150,
b. Selling price. VAT included, of P280;
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BSA (EDMODO)
c. Selling price of P300 VAT not included and VAT passed on to buyer of P40, or total billed to buyer of P340.

9. From the data:

Selling price, VAT included, of P448;
The sale was to a senior citizen,
How much will the senior citizen pay?

10. Gaby, a Japanese residing in the Philippines, bought garments from ABC Corp., a domestic corporation, and
exported the same to Japan. Total value of export is P100,000. VAT (output tax) due on the transaction is
a. P10,000,
b. P 5,000;
c. None, because 0% applies
d. None, because the sale is exempt from VAT.

11. Statement 1. Tax pyramiding is a situation where some or all of the stages of distribution of goods or services
are taxed, with the accumulation borne by the final consumer
Statement 2. A characteristic of the value-added tax is that it is a consumption tax, borne ultimately by the users
of goods or services
a. True, true;
b. False, false;
c. True, false;
d. False. true

12. A domestic corporation in real estate business sold a building.

Statement 1. The sale is not subject to the value-added tax because it is not a sale of goods or services,
Statement 2. The sale is subject to the value-added tax because sale of goods and properties are subject to the
value-added tax, and real estate is within the meaning of property
a. True, false,
b. False, true.
c. True, true:
d. False, false:

13. In determining the statutory threshold amount (exceeding which the taxpayer becomes liable to the value-
added tax)
Statement 1. A taxpayer who has two or more businesses shall look at the aggregate of gross receipts from all
businesses;
Staternent 2. Husband and wife with separate businesses determine liability for the value-added tax based on
his or her separate business.
a. True, false,
b. False, true.
c. True, true:
d. False, false:

14. The taxpayer is a VAT seller of goods. Data, VAT not included, for a month follow:
Net sales (gross sales, less sales returns and P450,000
allowances and sales discounts)
Payment for purchases of goods:
From VAT taxpayers 90,000
From non-VAT taxpayers 20,000
Payment for purchases of services from-VAT 30,000
taxpayers
Payment for supplies from VAT taxpayers 4,000
Salaries of employees 40,000

Payment to Manila Waters Co., Inc. 25,000

Other operating expenses 80,000
Value-added tax payable for the month?

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15. A VAT seller of services had the following data in a month:
Receipts, VAT not included
Contract price on work completed as of 12/31/19
(total contract price of P6,000,000)
Cash received P4,000 000
Accounts receivable 2,000,000
Advances on contract price, still unearned as of
12.31.19 500,000
Payments for
Services performed by VAT sub-contractors 1,000,000
Materials purchased from VAT suppliers 2,000,000
Materials purchased from BOI registered suppliers 50,000
Salaries of employees 300,000
Value-added tax payable?

16.
Taxpayer is a manufacturer subject to the VAT
Sales of manufactured products P14,000,000
Purchases from VAT sellers, VAT not included
Materials and supplies for use in production 4,000,000
Machine with useful life of 4 years 400,000
Land 3,000,000
Costs during the month on warehouse in
progress of construction, VAT not included
Materials purchased during the month 4,000,000
Progress billings paid to contractor (services) 2,000,000
VAT payable?

17. How much is the input tax from purchases in a month of fixed assets in the following cases

(a) A purchase in May of P200,000;

(b) A purchase in June of P1,200,000, life of the asset is 3 years
(c) Purchases in October of
Asset No. 1-P300,000,
Asset No. 2-500,000,
Total of P800,000
(d) Purchase in November
Asset No. 1 P 900,000, useful life of 4 years
Asset No. 2-500,000, useful life of 6 years
Total of P1,400,000

18. Sales of VAT business, exports P500,000

Sales of VAT business, Philippines 200,000 P700,000
Sales of non-VAT business 300,000
Purchases of goods sold
For VAT business 140,000
For non-VAT business 60,000
Net value-added tax payable or refundable?

19. Taxpayer became subject to value-added tax on January 1, 2019, by registering under the VAT system.
2018 Jan. 2019
Net sales P1,000,000 P100,000
Net purchases from VAT supplier 400,000 60,000
inventory, end 22,000 10,000
VAT payable at end of January?

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20. In a monthly VAT reckoning of value-added tax payable, the Output Taxes account will be debited and the Input
Taxes account will be credited
Statement 1. If the debit to the Output Taxes is an amount more than the credit to the Input Taxes account, the
balancing credit entry is an account Value- added Tax Payable.
Statement 2 The credit to the Input Taxes account cannot be more than the debit to the Output Taxes account.
Statement 3. If after debit to Output Taxes account and credit to Input Taxes account at concurring amounts,
there is a credit balance (unused) of input taxes the excess input taxes over the output taxes may remain in the
Input Taxes Account for use in the next month
Statement 4 If after debit to Output Taxes account and credit to Input Taxes account at concurring amounts,
there is a credit balance (unused) of input taxes the excess input taxes over the output taxes may be credited
with a debit to the account Deferred Input Tax, and this new account with a balance which will be credited
against the output taxes of the succeeding month
(a) All statements are true.
(b) One or more statement/s is/are false

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