Name Course/Year.

Score___________
Instructor: Schedule

Fill out necessary information above before answering the questions. Read all instructions first and check the number of pages.
ERASURES ARE STRICTLY PROHIBITED. ANY ALTERATIONS AND MERE CHANGING OF ANSWER WILL BE CONSIDERED
INCORRECT. ABBREVIATION IS ALSO PROHIBITED.

PART I: MULTIPLE CHOICES. Encircle the letter of the best answer.

1. Three of the following are subject to the value-added tax. Which is the exception?
a. Sales or importation of goods
b. Sale by a person exempt from the VAT who issued a VAT receipt thereon
c. Receipts from leasing of a real properties with a monthly rental of P15,000 per unit. Whereby the lessor has 50 units
for lease
d. Importations by persons who are not VAT registered.
2. A dealer in securities has the following for the year 2018:
Sale of securities held for sale
In the ordinary course of business P4,000,000
Cost of securities held for sale
In the ordinary course of business 2,500,000
Supplies expense, net of vat 300,000
Rent expense, net of vat 500,000
The vat payable shall be:
a. P180,000
b. P96,000
c. P84,000
d. Nil
3. Delta is a real estate dealer, sold 3 lots on November 2018 with the following terms (net of vat)
Lot A Lot B lot C
Selling price P250,000 P200,000 P300,000
Cost 150,000 130,000 175,000
Terms:
Downpayment, November 5 25,000 50,000 40,000
Due:
Dec. 5, 2018 25,000 20,000 20,000
Jan-Dec., 2019 200,000 130,000 240,000

The vat payable on Nov. 2018 shall be:

a. P5,400 c. P31,800
b. P37,200 d. P52,000
4. One of the following is not subject to vat on importation
a. Goods brought into the Philippines in the course of trade or business by vat registered person
b. Goods brought into the Philippines not in the course of trade or business by a person who is not vat registered.
c. Tax free goods imported by tax exempt importer who transferred them to a person who does not enjoy exemption
from vat on importation
d. Goods exempt from custom duties classified as personal and household effect belonging to residents of the
Philippines returning from abroad.
5. ABC Corporation (vat reg.) has the following data for the month of March:
Gross sales (vat exclusive) P8,000,000
Sales returns 400,000

Goods shipped on consignment (net)

Units unit price
March 25 40 P10,000
February 14 30 10,000
January 8 20 10,000

Goods withdrawn for use by the company P50,000

Goods taken as payment to creditor 30,000
Purchases for the month of (net of vat):
Goods P600,000
Supplies 75,000
Capital Goods (life:4 yrs) 1,100,000
Freight and insurance 8,500
Salaries of employees 385,000
Name:_______________________________ Transfer & Business Taxes
2nd Semester SY 2019-2020

Additional information:
 Received cash representing payment for 10 units delivered on February 14. The amount received was net
of 10% commission
 A consignee reported and remitted P200,000 (gross of 10% commission) representing 20 units sold from
goods consigned in March.
The vat payable for the month of March shall be:
a. P60,000 c. P84,830
b. P896,770 d. P981,600
6. 1st statement: if two or more adjacent residential lots or other residential dwellings are sold by the same seller to the same
buyer, within 12 months, the sale shall be exempt from vat only if the aggregate value of the lots or other residential dwellings
do not exceed P2,500,000 for 2018 taxable year.
2nd statement: sale of gold to BSP in 2018 is subject to 0% vat.
a.True; true c. True; false
a. False; true d. False; false
7. 1st statement: Facilitation expense shall be included in the determination of applicable input vat on importation
2nd statement: presumptive input vat are creditable against output tax only if the taxpayer is allowed to avail for 0% vat on its
export sales.
a. True; true c. True; false
b.False; true d. False; false
8. LBC Express Padala-Espana branch also offer local and overseas communication services to its customers in addition to
other services offered. It has the following data for a particular month:
gross receipts, domestic calls P5,000,000
Gross receipts, overseas calls from PH 3,000,000
purchase of supplies used in connection
with both domestic calls, net of vat 300,000
purchase of equipment used in connection
with both domestic and overseas
calls, net of vat 800,000
business expenses 1,000,000
How much was the overseas communications tax collected from persons who used the communications facilities?
a. P800,000 c. P500,000
b. P300,000 d. P0
9. Red Mobile Communications has the following data for a particular month:
gross receipts, domestic calls P5,000,000
Gross receipts, overseas calls from PH 3,000,000
purchase of supplies used in connection
with both domestic calls, net of vat 300,000
purchase of equipment used in connection
with both domestic and overseas
calls, net of vat 800,000
business expenses 1,000,000
How much is the vat payable, if any?
a. P504,000 c. P470,000
b. P420,000 d. P0
10. On January 1,2018, Pedro purchased a condominium unit including a parking space worth P2,800,000 from Maxima Realty
Corporation. The value of the condominium unit, as stated in the contract od sale was P2,200,000 while the parking space
was worth P600,000. The correct output vat shall be:
a. P72,000 c. P264,000
b.P336,000 d.Nil
11. What is the correct tax treatment of sales made by a vat-registered supplier from customs territory to a PEZA registered
enterprise?
TRANSACTION
Sale of goods sale of services
a. Vat exempt vat exempt
b. 0% vat Vat exempt
c. 0% vat 0% vat
d. Vat Exempt 0% vat
12. What is the correct tax treatment of sales made by a vat-exempt supplier from customs territory to PEZA registered enterprise
subject to NIRC or enjoying the 5% special tax regime?
PEZA registered enterprise
is subject to
5% tax NIRC
a. Vat exempt vat exempt
b. 0% vat Vat exempt
Name:_______________________________ Transfer & Business Taxes
2nd Semester SY 2019-2020

c. 0% vat 0% vat
d. Vat Exempt 0% vat
13. A PEZA registered enterprise from ecozone sold services to a buyer from a customs territory. As a result:
I. The seller is subject to Vat or OPT, whichever is applicable.
II. The seller is subject to income tax under NIRC.
III. Since the seller is a PEZA registered enterprise from an ecozone, a separate customs territory, it is neither subject to vat
nor income tax under NIRC.
a. I only c. II only
b. I and II only d. III only
This refers to any person who is required to register under the provisions of the Tax Code but failed to register.
a. VAT- registered person c. VAT- exempt person
b. VAT- registrable person d. None of the choices
14. In which of the following cases shall the selling price be deemed inclusive of VAT?
I – If the gross selling price is based on the zonal value or market value of the property
II – If the VAT is not billed separately
a.I only c. Both I and II
a. II only d. Neither I nor II
15. Ms. Consuelo Dimagulo receives a package of goods from her sister who lives in California, United States of America. Ms.
Consuelo will use the goods for personal purposes. She is not VAT- registered. Which of the following statements is correct in
connection with the receipt of a package?

a. Ms. Consuelo shall be subject to VAT on importation.

b. Ms. Consuelo shall not be subject to VAT on importation because she is not VAT- registered.
c. Ms. Consuelo shall not be subject to VAT on importation but shall be subject to VAT on sales.
d. None of the choices.
16. Marine food products which include fish and crustaceans are exempt from VAT. Which of the following is not exempt from
VAT?
a. Eels c. Prawns
b.Trout d. Aquarium fish
17. Any person who elects to optionally register under the VAT system, other than franchise grantees of radio and/or television
broadcasting, shall not be allowed to cancel his registration for the next:
a. 5 years c. 2 years
b. 3 years d. 1 year
18. Which of the following transactions in the course of trade or business requires actual payment of VAT before an input tax is
allowed as tax credit from the output tax?
a. Purchase of services
b. Transactions deemed sale
c. Domestic purchase of goods for use in trade or business for which deduction for services
d. Domestic purchase of goods for use in trade or business for which deduction for depreciation or amortization is
allowed under the Tax Code
19. A VAT-registered domestic carrier operating air, land and sea transport equipment acquired vehicles for use in its operation to
transport goods and cargoes. The domestic carrier:
a. Can claim input taxes on the said acquisitions
b. Cannot claim input taxes on the said acquisitions
c. Can claim input taxes only on the acquisitions of air and sea transport vehicles
d. Can claim input taxes only on the acquisition of land transport vehicles
20. Starting January 1, 2018, in proper cases, the commissioner of Internal Revenue shall grant a tax credit certificate or refund
for creditable input taxes within how many days from the date of submission of complete documents in support of the
application filed?
a. 130 days c.120 days
b.125 days d. 90 days
21. Which of the following sale of goods shall be subject to 12% VAT when certain conditions are met?
I – Sale of gold to the Bangko Sentral ng Pilipinas (BSP)
II – Sale of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export-oriented
enterprise to be used in manufacturing, processing, packaging or repacking in the Philippines of the said buyer’s
goods and paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of
the Bangko Sentral ng Pilipinas (BSP)
Name:_______________________________ Transfer & Business Taxes
2nd Semester SY 2019-2020

III – Sale of raw materials or packaging materials to export- oriented enterprise whose export sales exceed seventy
percent (70%) of total annual production
IV – Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investment
Code of 1987, and other special laws.
a. All of the above c. II and III only
b.II , III , IV only d. III and IV only
22. which of the following sale of services shall be subject to 12% VAT when certain conditions are met?
I – Processing, manufacturing or repacking goods for other persons doing business outside
the Philippines which goods are subsequently exported, where the services are paid for in acceptable
foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas(BSP)
II – Service performed by subcontractors and/or contractors in processing, converting, of manufacturing goods for an
enterprise whose export sales exceed seventy percent (70%) of total annual production
a. I and II c. II only
b. I only d. Neither I nor II
23. If the input tax inclusive of input tax carried over from the previous quarter exceeds the output tax, the excess input tax shall
be:
a. Credited in every quarter but not to exceed seventy percent (70%) of the output tax
b. Carried over to the succeeding quarter or quarters
c. Disregarded because carry over is no longer allowed under the new regulations
d. Deducted from income tax due

24. Lola Belit, a 60 years old grandmother, was treated by her grandchildren RC, Rex & Xerez to Shakey’s Restaurant during the
grandparents day and their total bill is 2,240. How much is the discount of the senior citizen?
a. 100 c. 112
B.Nil amount d. Answer not given
25. How much is the VAT?
a. 240 c. 180
b. 100 d. answer not given
26. If the seller is a non-vat enterprise, how much is the discount of the Senior Citizen?
a. 100 c. 112
b. Nil amount d. Answer not given
27. Mr. B, a CPA practitioner, is also employed with a manufacturing company and receives the following for the year:

Salary 150,000
Overtime 30,000
13th month 15,000
Deposit of client 20,000
Retainer Fee 5,000/mo 60,000
Out of pocket charged to client 80,000
Capital gains, car 25,000
How much is Mr. B’s gross compensation income?
a. 180,000 c. 265,000
b. 240,000 d. answer not given
28. How much is Mr. B vatable transaction?
a. 160,000 c. 140,000
b.185,000 d. Answer not given
29. How much is subject to withholding tax?
a. 340,000 c. 160,000
b. 320,000 d. Answer not given
30. HWPD is the winning bidder to exclusively supply construction materials for the construction of Makati Parking Building 2, for
the month, it has the following:
Sales, net 400,000
Purchases of merchandise 80,000
Purchases of delivery equipment 5 years life 1,200,000
PLDT Bil 30,000
How much can the local government of Makati City withhold VAT from its payments to HWPD?
a. None c. 20,500
b. 22,400 d. Answer not given
31. How much is the VAT Payable for the month?
a.10,000 c. 36,000
a. 32,400 d. Answer not given
32. Lino B. Bott, a French national being naturalized as Filipino, is a VAT registered had the following data:
Name:_______________________________ Transfer & Business Taxes
2nd Semester SY 2019-2020

Export Sales P3,630,000

Domestic Sales 2,464,000
Purchases of goods for export 1,344,000
Purchases of goods for domestic sales 646,240
Purchases of supplies on domestic sales exclusive of VAT 249,700

Assuming that the input tax paid on purchases of goods for export are claimed as tax credit, the VAT payable by Lino is:

a. 25,790 c. 355,790
b. 20,796 d. Answer not given
33. Value added tax is an example of:
a. Graduated Tax c. Proportional Tax
b.Progressive Tax d. Regressive Tax
34. A fraudulent VAT return for the third quarter of 2003 was filed on October 25, 2003. It was discovered on November 10, 2004.
When is the last day for the government to collect through judicial proceedings?
a. October 25, 2008 c. November 10, 2009
b. November 10, 2014 d. None of the choices
35. Exemption from tax is generally construed strictly against the:
a. Taxpayer claiming it
b. Government imposing it
c. Taxpayer or government whichever is advantageous to the taxpayer
d. Tax practitioner advising the taxpayer to claim exemption
36. Under this withholding tax system, taxes withheld on certain income payments are intended or equal or at least approximate
the tax due of the payee on said income.
a. Creditable withholding tax c. Withholding tax at source
b. Final withholding tax d. None of the choices
37. Given the following data: (exclusive of VAT)(TRAIN LAW)

Sales 1,500,000
Sales Returns 180,000
Sales discounts 150,000
Purchases 900,000
Freight In 50,000
Purchase Return 60,000
Capital Goods 1,000,000

How much is the output tax?

a. 180,000 c. 39,600
b. 140,400 d. None of the choices
38. Using the preceding information, how much is the input tax?
a.114,000 c. 226,800
a. 110,183.33 d. Answer not given
39. Using the information in number 37 except capital goods of 1,680,000, VAT inclusive with useful life of 4 years, how much is
the input tax for the month?
a. 231,000 c. 308,400
b.230,500 d. None of the choice

40. The records of A, A VAT Taxpayer shows:

October November December
Output Tax 196,000 180,000 260,000
Input Tax 108,000 190,000 210,000
There was an excess of input taxes over output taxes of 50,000 for the quarter ending September 2014. What is the VAT due
for the quarter?

a. 38,000 c. 40,000
b.(10,000) d. Answer not given