1. Obama is a practicing CPA. He is also a full time professor of accounting at PRMSU.

In the
preceding year, his gross receipts from the practice of public accounting was P1,960,000 while
his total compensation income as college professor was P190,000.
a. He is subject to VAT effective January 1 of the current year.
b. He may be subject to VAT if he voluntarily registers under the VAT system
c. He is not required to pay either VAT or any business tax
d. He is required to pay professional tax but not business tax
2. Which importation is subject to VAT?
a. Importation of fuels by a person engaged in international shipping worth P20million.
b. Importation of refrigerated Kobe beef from Japan by a beef dealer for sale to hotels in
Makati City with a fair market value of 8Million.
c. Importation of wines by a wine dealer with a fair market value of 4Million for sale to hotels
in Quezon City.
d. Importation of books worth P5 Million and magazines worth 3 Million
3. Mr. S Magler imported cigarettes from the United States for sale in the Philippines. What
business taxes in the Philippines are due?
a. VAT, excise tax, other percentage tax
b. VAT and excise tax
c. VAT only
d. VAT and percentage tax
4. Which importation is not VAT-exempt?
a. Importation of personal and household effects of residents coming to resettle in the
Philippines.
b. Importation of personal and household effects of foreigners coming to settle permanently in
the Philippines
c. Importation of personal and household effects which are subject to customs duties
d. All of these
5. The Trump Shop sells cakes and pastry items to well-known hotels around the Metro Manila
area. The hotels are allowed credit based on the track record of the hotels. The total amounts
received or receivable from sales by the Trump Shop in April of Year X were P220,000, including
the value-added tax. 75% of the sales are normally on account. How much is the VAT on the
sales amount for the month of April, Year X?(round off to 2 decimal digits, if
applicable)_______________23,571.43
6. Which of the following statements is wrong: the value-added tax is;
a. Not an expense
b. A tax credit
c. Not a part of the gross selling price
d. On purchases, is a part of the cost of inventory
7. Obama, a Japanese residing in the Philippines, bought garments from Bong Go Corp., a domestic
corporation, and exported the same to Japan. Total value of export is P100,000. VAT or output
tax due on the transaction is______________0
8. Prices/costs of a VAT taxpayer with purchases from VAT suppliers, VAT not included:

Gross sales P700,000

 Sales returns and allowances 30,000

Sales discounts 40,000

Purchases 210,000

Purchases returns and allowances 20,000

Purchase discounts 10,000

How much is the output tax?_____________75,600

9. 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
corporation.
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.
10. Trump is a CPA. He applied for work and was hired by a firm which is engaged in Business
Process Outsourcing, handling accounting work for US entities. He was paid for his services. How
would Trump treat such payment for business tax purposes?
a. Subject to 12% VAT
b. Subject to percentage tax
c. Exempt from VAT and percentage tax
d. It is a zero-rated transaction
11. Mr. Dennis Uy imported various merchandise from abroad. The importation was invoiced at
5,000 dollars. Mr. Uy also incurred the following costs of importation:

Insurance P4,000
Freight 15,000
Wharfage fee 4,000
Arrastre charge 7,000
Brokerage fee 8,000
Facilitation fee 5,000

Mr. Uy was also assessed P24,000 and P18,000, respectively, for customs duties and excise tax.
The applicable exchange rate was P42.50:$1

What is the VAT on importation?____________35,100

12. Swift Company had the following data regarding its importation:

Invoice price in US dollars 12,000

Other costs to bring goods to the Philippines P 145,000
BOC charges 100,000
 Customs duties is 10% of dutiable value
Peso-dollar exchange rate 42.80:$1

VAT on importation (round off to the nearest peso, if applicable)__________98,935

13. Two companies imported the following:

Home appliance company-for personal use

Furniture P600,000

Rattan 250,000

Lumber 450,000

Hinto Company has the following data which relates to the importation of cigarettes:

Total invoice value P1,000,000

BOC charges 300,000

Customs duties 200,000

Excise taxes 300,000

Total VAT on importation________________372,000

14. Which is not a constructive receipt?

a. Bank deposits made available to the service provider without restriction
b. Transfer of amounts retained by the payor to the account of contractor-service provider
c. Judicial consignation by the payor of the contract price which the service provider wishes to
donate to the payor
d. Collection of revenue for past services rendered
15. A non-stock charitable organization owned by Trump realized the following during the month;
Membership donations P300,000
Donation from various donors 400,000
Sale of souvenirs 200,000

Mr. Trump also reported the following from his client in his consultancy business:

Professional fees P150,000

Less: withholding tax 7,500
Net amount received 142,500

Total amount subject to business tax_________________350,000

16. Statement 1: A self-employed individual is engaged in business
Statement 2: A non-profit organization will be exempt from business tax if it uses the income
generated from activities subject to business tax for non-profit purposes

a. Only Statement 1 is true

b. Only Statement 2 is true
c. Both statements are true
d. Both statements are not true

17. Statement 1: Services specifically subject to percentage tax are subject to VAT if not subjected
to percentage tax
Statement 2: A person who wishes to register as a VAT taxpayer despite not meeting the VAT
threshold is called a “registrable person”

a. Only Statement 1 is true

b. Only Statement 2 is true
c. Both statements are true
d. Both statements are not true

18. Trump owns a humble carinderia near a grab riders’ parking area. Its annual gross receipts range
from P300,000 to P550,000. In February, gross receipts amounted to P18,700 while purchases of
goods subject to VAT is P5,000 and not subject to VAT, 12,000.

If trump is a VAT-registered taxpayer and the amounts indicated are exclusive of VAT, the value
added tax due is________________1,644

19. Obama owns the following businesses:

Annual gross receipts
I. Restaurant P2,500,000
II. Barbershop 700,000
III. Seller of agricultural food products 3,000,500

Which combination will subject Obama to VAT?

a. I only
b. I and ii
c. I,ii and iii
d. None
20. Which of the following statements is true?
a. A hongkong national who comes to the Philippines for a tourist visit in Boracay shall be
entitled to a 20% discount on plane fare and hotel accommodations
b. A senior citizen who buys fishball from an ambulant vendor shall be entitled a 20% discount
on amount which is net of VAT.
c. The monthly electric bill on a senior citizen shall be subject to 5% discount based on the
amount which is net of VAT
d. A multi-millionaire senior citizen shall also be entitled to the 20% discount
21. Trump Management is a domestic corporation. It is an affiliate of SunLife, organized by the latter
to perform collection, consultation and other technical services, including functioning as an
internal auditor of SunLife. These services were performed on a “non-profit, reimbursement of
cost only” by Trump. The services rendered by Trump was subjected to value-added tax by the
BIR. Which of the following arguments of Trump Management is correct?
I. Exempt from VAT because the service was not considered in the ordinary course of
trade or business
II. Exempt from VAT because Trump Management was established only to ensure
operational orderliness and administrative efficiency by SunLife, and not in the sale of
services.
a. I only
b. II only
c. Either I or II
d. Neither I or II
22. Where even if there is no business, VAT is imposable on:
I. Importations of goods for personal use
II. Services rendered in the Philippines by nonresident foreign corporations, even isolated ,
shall be considered as being rendered in the course of trade or business.
a. I only
b. II only
c. I and II
d. None of the above

23. Statement 1: An importation of goods by a non-profit charitable organization shall not be

subject to value added tax
Statement 2: In the case of importation, the importer is not the one liable for the VAT but the
person who shall buy the imported goods

a. Both statements are correct

b. Only statement 1 is correct
c. Both statements are incorrect
d. Only the second statement is correct
24. Trump imported brand new Porsche, 2021 model from Germany for personal use of Melania.
Total landed costs is P15 million exclusive of customs duties of P3 Million, excise tax of P2
million and facilitation cost of P1 Million. The vat payable is______________2,400,000
25. Clinton Auto Repair Shop, VAT registered, had the following data in its books:
Receipts:
From auto repair P85,620
From washing and greasing 45,415
Reimbursement by customer on payments
Made to VAT machine shops 4,350
Payments received for lubricants,oils
And fluid provided by the shop
To cars undergoing repair 5,780
The total output VAT ( round off to nearest peso, if applicable)____________16,418