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VAT Quizzer
VAT Quizzer
VAT Quizzer
TAXATION
VALUE ADDED TAX QUIZZER
EXERCISE PROBLEMS
1. The records of A, a VAT taxpayer show
Novembe
October r December
Output Tax P96,000 P180,000 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 quarter 25,000
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)
January February March
P P P
Sales 1,000,000 2400000 3,800,000
Purchase from VAT suppliers 400,000 900,000 1,400,000
Purchase of machinery from vat suppliers (3years
life) 1,200,000
Determine the VAT payable for the monthly and quarterly returns
5. Off Pring Corporation is Value-Added Tax registered dealer of appliances. The following data are for the last
quarter of 2014 (CPA Exam Modified):
Sales, total invoice value P 6,921,600
Purchases, net of input taxes 5,500,000
Sales returns (based on total invoice value) 224,000
Purchase returns (net of input tax) 300,000
Deferred input taxes (carried over from the third quarter of 2014) 9,500
How much is the value-added tax due for the last quarter of 2014?
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, 20152,100,000
The zonal value of the residential lot was 2,800,000.
Required:
1. How much was the output tax on January 15, 2014?
2. How much is the output tax on February 17, 2015?
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 production 2,000,000
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?
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?
15. A VAT-registered taxpayer engaged the services of a non-resident service provider. The contract price was
500,000 which was paid by the VAT-registered taxpayer in full.
Required:
1. How much was the amount of withholding VAT to be withheld by the VAT – registered taxpayer?
2. How much input tax could be claimed as credit by the VAT-registered taxpayer?
16. Abel Corporation is a merchandising concern and has an inventory of goods for sale amounting to 1,000,000.
Nel Corporation, a real estate developer, exchanged its real estate properties for the shares of stocks of Abel
Corporation resulting to the acquisition of corporate control.
Required:
1. Is the inventory of goods owned by Abel Corporation subject to output tax?
2. Is the exchange of real estate properties held for sale or for lease for shares of stocks subject to VAT?
3. Assuming Abel Corporation is another real estate dealer, is there an output VAT imposable on the above
transfer?
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
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
2nd Statement: Non – resident persons who perform services in the Philippines are deemed to be making
sales in the course of trade or business, even if the performance of service is not regular
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct
11. Which of the following shall be included in the term “goods or properties”?
I – Real properties whether or not held primarily for sale to customers or held for lease in the ordinary course
of trade or business
II – The right or the privilege to use patent, copyright, design or model, plan, secret formula or process,
goodwill, trademark, trade brand or other like property or right
III – The right or the privilege to use any industrial, commercial or scientific equipment
IV – The right or the privilege to use motion picture film, films, tapes and discs; and
V – Radio, television, satellite transmission and cable television time.
a. I, II, III, IV and V c. II, III, IV and V only
b. I, III, and V only d. I only
12. Which of the following shall be subject to VAT?
a. Sale of a residential house and lot c. Sales of private car by its owner
b. Sale of an apartment house d. All of the above
13. In the case of sale of real properties on the installment plan, the real estate dealer shall be subject to VAT on
the:
a. Selling price;
b. Selling price or fair market value whichever is lower
c. Selling price of fair market value whichever is higher
d. Installment payments, including interest and penalties, actually or constructively received by the seller
14. 1st statement – In the case of sale of real property on the deferred payment basis, not on installment plan
(initial payments exceed 25% of the gross selling price), the transaction shall be treated as cash which makes
the entire selling price taxable in the month of sale.
2nd statement – Transmission of property to a trustee shall not be subject to VAT if the property is to be
merely held in trust for the trustor and/or beneficiary.
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct
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
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
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
53. Which of the following circumstance shall give rise to transactions “deemed sale” for purposes of VAT?
I – Change of ownership of the business (i.e., single proprietorship incorporates; or the proprietor of a sole
proprietorship sells his entire business)
II – Dissolution of a partnership and creation of a new partnership which takes over the business
a. Both I and II c. I only
b. Neither I nor II d. II only
54. 1st statement: The Commissioner shall determine the appropriate tax base in cases where a transaction is
deemed a sale, barter or exchange of goods or properties or where the gross selling price is unreasonably
lower than the actual market value
2nd statement: The gross selling price is unreasonably lower than the actual market value if it is lower by
more than 30% of the actual market value of the same goods of the same quantity and quality sold in the
immediate locality on or nearest the dale of sale
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct
55. For transactions deemed sale, other than retirement or cessation of business, the output tax shall be based on
the:
Taxation by Rex B. Banggawan,CPA, MBA Page 8 of 13
CDD Quizzer on Value Added Tax
a. Selling price of the goods deemed sold as of the time of occurrence of the transaction
b. market value of the goods deemed sold as of the time of the occurrence of the transaction
c. acquisition cost of the goods deemed sold
d. acquisition cost or the current market price of the goods whichever is lower
56. The VAT shall apply to goods or properties originally intended for sale or use in business, and capital goods
which are existing as of which of the following occurrences?
I – Change of business activity from VAT taxable status to VAT-exempt status
II – Approval of request for cancellation of registration due to reversion to exempt status
III – Approval of request for cancellation of registration due to a desire to revert to exempt status after the
lapse of three (3) consecutive years from the time of registration by a person who voluntarily registered
despite being VAT-exempt.
IV – Approval of request for cancellation of registration of one who commenced business with the
expectation of gross sales or receipts exceeding 1,500,000, but who failed to exceed this expectation during
the first twelve months of operation.
a. I, II, III, and IV c. I and II only
b. I, II, and III only d. III and IV only
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 output
Consignment made (net of VAT): VAT.
June 15, 2007 100,000 a. P52,800
May 15, 2007 100,000 b. P48,000
April 15, 2007 100,000 c.
P60,000
d. P67,200
88. A, a VAT – registered, made the following purchased during the month of January 2007
Goods for sale, inclusive of VAT P 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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