Name: Date:

Course/Yr.: Score

FINALS

COURSE TITLE: A19

TAX 2 -TRANSFER AND BUSINESS TAXATION

I. Multiple Choice. Encircle the correct answer.

1. Statement 1: Consumption tax is a tax upon the utilization of goods or services by sellers
Statement 2: Gross sales and Gross receipts are the revenue or amount paid for the sale of goods and services,
whether collected or uncollected
Statement 3: VAT is an example of consumption tax
A. Only one is correct C. Three are correct
B. Two are correct D. Neither are correct

2. One of the following is not a major business internal revenue in the tax code
A. VAT C. Income Tax
B. Percentage Tax D. None

3. Which of the following is subject to Value Added Tax?

A. Medical, dental and hospital services
B. Laboratory services
C. Sale of medicine in the hospital's pharmacy and drugstore
D. All of the above

4. Natoy, a carpenter was returning in the Philippines carrying the following items: wearing apparel P50,000, his pet AsPin
P2,000 and tools used in job P10,000. Which of the following is true?
A. The pet is not exempt from VAT in importation
B. The tools are exempt from VAT on importation
C. The wearing apparels are not exempt from VAT on importation
D. All of the following are exempt because it did not exceed the VAT threshold

5. Javvy, a VAT registered person is engaged in two (2) lines if businesses. One with VAT and the other is non VAT. His
records show the following (net of VAT): 1. sales from VAT business P4,000,000 and from non VAT business P6,000,000 2.
purhcases of goods from VAT suppliers for VAT business P2,000,000 and for non VAT business P3,000,000 3. purchases from
VAT suppliers of supplies used for both VAT and Non VAT business P20,000 4. operating expenses P1,800,000. The output
VAT is
A. P1,200,000 C. P480,000
B. P720,000 D. None

6. The input tax credit is

A. P600,000 C. P242,400
B. P362,400 D. P240,960

7. The VAT payable is

A. P600,000 C. P237,600
B. P357,600 D. P239,040

8. Natoy imported a car from the Russia for his personal use. The total landed cost is P250,000 (about $5,952) including
customs duties of P50,000. The VAT payable is
A. P36,000 C. P24,000
B. P30,000 D. None

9. In the third quarter of 2015, a taxpayer has annual gross receipts that do not exceed P3,000,000. He had the following data:
accounts receivable, beginning of the quarter P50,000, sales during the quarter P100,000, increase in AR P25,000, purchase of
supplies, total invoice amount P11,200. The percentage tax due for the quarter is
A. P2,250 C. P7,500
B. P3,000 D. P6,500
10. Which of the following business tax is/are correct?
i) 6/10 of 1% of gross selling price of traded shares sold
ii) 15% or net capital gain of non-traded shares sold
iii) amusement tax
iv) VAT on exempt sales

A. Yes to i & ii C. No to i
B. Yes to i & iv D. No to ii

11. The following sales are made by a non VAT seller of goods
i: sale of vatable goods such as t-shirts
ii: sale of non vatable goods such as husked rice
A. i is vatable C. Both are vatable
B. ii is VAT exempt D. Both are VAT exempt

12. Chrissa Joy's restaurant has the following sales transactions: sales to senior citizen P50,000, sales to PWD P30,000, sales to
students P60,000. How much is the VAT exempt sale?
A. P140,000 C. P80,000
B. P90,000 D. P50,000

13. How much is the exempt VAT?

A. P16,800 C. P9,600
B. P10,800 D. P6,000

14. Monthly percentage tax is filed on or before the

A. 20th day from the end of each month C. 30th day from the end of each month
B. 25th day from the end of each month D. None

15. A VAT registered individual made the following purchases during the month of January 2017: goods for sale - inclusive of
VAT P224,000, supplies - net of VAT P20,000, office air conditioner - total invoice amount P56,000, home appliances for
residence - gross of VAT P17,600, repair of store - total invoice amount evidence by ordinary receipt of the contractor P4,400.
The input tax credit are
A. P26,400 C. P24,000
B. P29,400 D. P32,400

16. Santino, a VAT registered person has the following transactions, net of VAT: sales to PAGCOR (GOCC) P250,000,
purchases (all sold to PAGCOR) P120,000. How much is the creditable input tax?
A. P30,000 C. P14,400
B. P17,500 D. P12,857

17. The VAT payable is

A. P12,500 C. P17,143
B. P15,600 D. None

18. A, operates a ferryboat. During the particular quarter, its receipts consist of the following gross receipts (net of VAT):
transport of passengers P2,000,000, transport of goods P1,500,000, transport of cargoes P500,000. The common carrier's tax
payable is
A. P30,000 C. P100,000
B. P90,000 D. None

19. How much tax should the payor withheld?

A. P1,000 C. P400
B. P980 D. P390

20. How much should A receive?

A. P9,020 C. P3,610
B. P8,820 D. P3,510

21. Smart received the following receipts from ABC Corporation on its services rendered. Net of any tax, overseas call
P2,000,000 and domestic call P5,000,000. How much is the percentage tax of ABC Corporation?
 A. P700,000 C. P200,000
B. P500,000 D. None

22. How much is the tax liability of Smart to BIR?

A. P800,000 C. P600,000
B. P700,000 D. P500,000

23. Statement 1: Sales to Government will always results to zero VAT payable
Statement 2: Once a VAT registered franchise grantees of radio and/or TV broadcasting will always be a VAT taxpayer
A. True, True C. True, False
B. False, False D. False, True

24. Kyle has a bbq stand earning P98,000 income annually and did not opt to register to become a VAT register. He come to you
and asked what business tax will he be liable. Which of the following business tax would you recommend that Kyle must pay?
A. VAT C. Excise tax
B. 3% OPT D. None

25. The following are subject to VAT on importation from, except

A. Importation by non VAT corporation of medicines for diabetes
B. Importation by non VAT person of car for personal use
C. Importation by agricultural cooperatives of equipment for farming
D. Importation by non VAT person of animal food for aquatic fish

26. Statement 1: sale of commercial lot, value does not exceed P1,500,000 are exempt from VAT as per TRAIN LAW
Statement 2: sale of commercial house and lot, value does not exceed P2,500,000 is exempt from VAT
A. False, True C. False, False
B. True, False D. True, True

27. Non VAT registered person operates merchandising business and has annual gross sales that exceeds P1,919,500 but less
than P2,100,000, although the operations resulted to net loss for the year, he is subject to
A. 3% OPT C. 2% MCIT
B. VAT D. None, because operations resulted to net loss

28. A taxpayer registered under the VAT system on January 1, 2018. His records during the month show: value of inventory as
of Dec. 31, 2017 purchased from VAT registered persons P50,000, VAT paid on inventory as of Dec 31, 2017 P600, value of
inventory as of Dec 31, 2017 VAT exempt goods P60,000, sales - net of VAT P140,000, sales - net of VAT P45,000, purchases -
net of VAT P70,000. The input tax credit is
A. P10,600 C. P9,400
B. P10,200 D. P9,000

29. The VAT payable is

A. P11,600 C. P12,800
B. P12,000 D. P13,200

30. PAGCOR has the following data for its gaming operatins for the year 2018: gross revenue P10,000,000, purchases
P5,000,000, ending invty P3,000,000. How much is the tax liability of PAGCOR?
A. P500,000 C. P100,000
B. P300,00 D. None, because PAGCOR is a government subsidiary that is exempt
from any tax.

31. A lessor leases his commercial units for P14,500 per month. During the taxable year, his gross receipts amounted to
P2,000,000. To what business tax he will be liable
A. 12% Vat C. 3% Opt
B. 0% Vat D. Exempt

32. Value added tax is a/an

A. Indirect Tax C. Local tax
B. Progressive Tax D. Personal Tax

33. Bagito is engaged in spakol business which is located in Alabang. He also has two branches, one in Rizal and the other one
in Morayta. How much must he pay to register its business?
A. P500 C. P1,500
B. P1,000 D. P3,000

34. Which of the following franchise grantees is subject to the 2% percentage tax on franchise?
A. Franchise pn radio and/or television broadcasting companies, the annual gross receipts in the preceding year
do not exceed P10,000,000
B. Franchise on gas and water utilies
C. Frnachise on toll road operations
D. None, because the other percenage tax is 3%

35. B, operates a cockpit. Inside the cocpit, he also operates a restaurant. Data for the the particular quarter are as follows: gross
receipts from cockpit operations P500,000 and restaurant operations: sale of foods P100,000 and sale of liquor P150,000. The
amusement tax due from B is
A. P90,000 C. P225,000
B. P135,000 D. P75,000

36. The following events are not subject to consumption tax specifically VAT, except
A. Non VAT person whose gross receipts exceeds P1,919,500 but less than P2,500,000
B. VAT registered person purchased medicine for highblood
C. Purchased of goods by VAT registered person from a non VAT seller
D. Exportation of goods by VAT registered person

37. A VAT taxpayer purchased the following machineries for the second quarter of 2018 (net of VAT)
Date Useful life Cost (000)
1 Apr 10 4 800
2 Apr 20 5 1,000
3 May 14 3 600
4 May 20 2 400
5 June 10 3 600
6 June 15 6 1,200

The input tax credit for April 2018 is

A. P216,000 C. P98,000
B. P4,000 D. P122,000

38. The input tax credit for May 2018 is

A. P124,000 C. P8,000
B. P120,000 D. P4,000

39. The input tax for June 2018 is

A. P4,400 C. P216,000
B. P8,400 D. P146,000

40. The input tax for the quarter ending June 2018 is
A. P126,400 C. P136,400
B. P134,400 D. P12,400

41. A, a VAT taxpayer billed his customer inclusive of VAT selling price P500,000, Value Added tax P50,000, total invoice of
P550,000. The output tax is
A. P50,000 C. P58,929
B. P60,000 D. P66,000

42. How much percentage tax must the payee (person/entity rendering service) pay on its collection from overseas dispatch,
message or coversation originating from the Philippines by telephone, telegraph, telewriter, exchange, wireless and other
communication equipment or serivce, if the payee is not a VAT registered person and its gross receipts did not exceed the VAT
threshold?
A. 3% C. 5%
B. 10% D. None

43. Which of the following importation is subject to VAT?

 A. Importation of frozen meat C. Importation of apples for personal consumption
B. Importation of bamboo poles D. Importation of grapes for sale

44. The following are exempt from VAT, except

A. Raw cane sugar C. Bagasse
B. Polished and husked rice D. All are VAT exempt

45. Statement 1: Gross receipts are deemed inclusive of VAT

Statement 2: Gross sales are deemed exlusive of VAT
A. False, True C. True, True
B. True, False D. False, False

46. Bank XYZ has the following income (loss). March 2014: interest income with maturity of less than 5 years P50,000, rentals
P50,000, net trading loss P10,000. April 2014: interest income with maturity of less than 5 years P100,000, rentals P50,000, net
trading gain P20,000. How much is the gross receipts tax for the month of March 2014?
A. P6,000 C. P5,000
B. P5,300 D. P3,000

47. How much is the gross receipts tax for the month of April 2014?
A. P15,500 C. P9,200
B. P9,900 D. P8,000

48. The following events are subject to excise tax, except

A. Importation of machineries use in agricultural by agricultural cooperative
B. Importation of medicines for diabeted, hypertension and high cholesterol
C. Sale of cigarettes
D. Importation of car for personal use by non vat registered person

49. Which of the following is not an example of excise tax

A. Specific tax C. Estate tax
B. Ad valorem tax D. None

50. A VAT registered trader has the following transactions: sale of goods to SM - net of VAT P2,500,000, purchases of goods
sold to SM - gross of VAT P896,000, sales to landbank (GOCC) - net of VAT P1,000,000, purchases of goods sold to landbank -
net of VAT P700,000. How much is the withholding VAT?
A. P120,000 C. P50,000
B. P70,000 D. None

51. How much is the standard input tax?

A. P120,000 C. P50,000
B. P70,000 D. None

52. What is the VAT payable on sale to landbank?

A. P120,000 C. P50,000
B. P70,000 D. None

53. How much is the total creditable input taxes?

A. P216,000 C. P180,000
B. P191,520 D. P166,000

54. How much is the VAT payable?

A. P244,000 C. P120,000
B. P204,000 D. None

55. Rational in consumption tax excludes

A. It promotes saving formation B. A tax to all
C. It supports the benefit received theory D. It helps in wealth redistribution to society

56. Natoy operates lechon manok business and has annual gross sales of P3,360,000 on its sale of lechon manok. How much is
the business tax?
 A. P403,200 C. P100,800
B. P360,000 D. P0

57. One of the following statements is incorrect

A. Imported goods which are subject to excise tax are no longer subject to VAT
B. VAT on importation is paid to the Bureau of Customs before the imported goods are released from custody
C. Expenses incurred after the goods are release from customs custody are disregarded in computing VAT on
importation
D. When a person who enjoys a tax exemption on his importation subsequently sells in the Philippines such
imported articles to a non exempt person, the purchases non exempt person shall pay the VAT on such
importation

58. The following are subject to tax on winnings under Section 126, except
A. Person who wins in horse races
B. Winners from double, forecast/quinella and trifecta bets
C. Winners in racetracks
D. Owners of winning race horses

59. Mr. Danny, a non VAT registered person, has the following shares sold: non traded shares: selling price P1,000,000, cost
P500,000 and traded shares: selling price P2,000,000, cost P1,000,000. How much is the other percentage tax due of Mr.
Danny?
A. P90,000 C. P12,000
B. P45,000 D. None, because shares sold are subject to capital gains tax an income
tax.

60. A domestic carrier by land is engaged in transport of passenger, a non VAT registered carrier and has a gross receipts and
cost of sales of P4,000,000 and P1,000,000 which exceeds the VAT threshold. How much is the common carriers tax?
A. P480,000 C. P90,000
B. P120,000 D. None

61. A VAT registered real estate dealer sold the following during the month of January 2010: one(1) condominium unit
(inclusive of parking space valued at P500,000) P1,500,000, two(2) adjacent condominium units covere by separate titles sold to
one buyer, each unit is valued at P1,750,000 (exclusive of two parking spaces valued at P500 each) P3,500,000. He also had the
following acquisitions during the month: domestic purchases of supplies - net of VAT P300,000, domestic purchases of five
units of office computers valued at P50,000 each - net of VAT (4 yrs estimated life) P250,000, importation of one vehicle for
land fransport used in business (5 yrs useful life) P1,400,000, office rental - net of VAT P100,000. How much was the tax base
for VAT purposes?
A. P6,000,000 C. P3,500,000
B. P5,000,000 D. None

62. How much was the output VAT?

A. P720,000 C. P420,000
B. P600,000 D. None

63. How much were total input taxes?

A. P246,000 C. P51,425
B. P80,800 D. None

64. How much was the VAT payable?

A. P584,575 C. P519,200
B. P548,575 D. None

65. A restaurant billed 3 customers including senior citizen, P3,000. How much is the VAT exempt sale?
A. P3,000 C. P893
B. P1,000 D. P714

66. Which of the following can be refunded, converted into tax credit certificated or carried over to the next quarter at the option
of the VAT registered taxpayer?
 A. Input tax on raw materials C. Input tax on exportation of goods
B. Input tax on importation of supplies D. Input tax on purchases of services

67. Mark was temporarily employed in POGI Corporation for 14 days and earned an income of not exceeding P100,000. Mark is
engaging as?
A. Privilege stores C. Commercial activity
B. Marginal income earner D. None

68. Who is the taxpayer as far as the primary public offering in the local stock exchange of closely held corporation is
concerned?
A. The purchaser of shares C. The seller of the shares of stock
B. The corporate issuer D. The local stock exchange

69. Which of the following is not a purpose of excise tax

A. To raise revenue
B. To curtail the consumption of certain commodities
C. To protect domestic industries
D. To encourage investments

70. A VAT registered surgeon conducted a cosmetic surgery on a patient for P1,200,000. The fee is agreed to be inclusive of
VAT but exclusive of excise tax. What is the excise tax?
a. P60,000 c. P53,571
b. P57,143 d. P50,000

71. The commission or his authorized representative is empowered to suspend the business operations and temporarily close the
business establishment of any person for
A. Understatement of Purchases by 50% C. Understatement of Cost of Sales by 50%
B. Understatement of Ending Inventory by 50% D. All of the above

72. A lessor leases the following stalls in market and malls

i: stalls in market, P14,000 monthly, annual gross receipts P2,000,000
ii: stalls in mall, P16,000 monthly, annual gross receipts P3,500,000

Which of the following transaction is vat exempt?

A. i only C. Both i and ii
B. ii only D. Neither i nor ii

73. Which of the following is not correct?

i. Any person who is not subject to mandatory registration because his actual or expected gross sales/receipts
from non exempt business for the past 12 months do not exceed P3,000,000, may opt to register under the
VAT system, but shall not be allowed to cancel his VAT registration for the next three years.
ii. Any person who is VAT registered but enters into transactions which are exempt from VAT may opt that
the VAT apply to his transactions which would have been exempt but shall not be allowed to cancel his VAT
registration for the next three years
iii. Franchise grantees of radio and/or television broadcasting whose annual gross receipts of the preceeding
year do not exceed P10,000,000 may opt for VAT registration but shall not allowed to cancel his VAT
registration for the next three years.
A. iii only C. i only
B. ii only D. i, ii, and iii

74. A trader made the following sales of goods during the month of June 2018, exclusive of VAT: cash sales P200,000, credit
sales P100,000, installment sales P100,000, consignment made (net of VAT) - June 15, 2018 P100,000; May 15, 2018
P100,000; April 15, 2018 P100,000. Output tax is
A. P84,000 C. P60,000
B. P72,000 D. P48,000

75. The monthly percentage tax return shall be file on or before

A. 20th of the following month C. 30th of the following month
 B. 25th of the following month D. None

76. A, a resident citizen, promoted a world boxing championship in Manila featuring Manny Paksiw, a filipino champion. Gross
receipts amounted to P3,000,000 and additional receipts from television coverage was P2,000,000. The amusement tax is?
A. P900,000 C. P500,000
B. P300,000 D. None

77. The following products are subject to excise tax, except

A. Coal and coke C. Cigars
B. Waxes and petrolatum D. Pick ups

78. A VAT registered physician and beautician conducted an internal abs enhancement procedure a well-known and handsome
practicing accountant, Mark Ngina. The two contracted for a P2,000,000 payment before taxes. What is the excies tax ?
a. P0 c. P100,000
b. P40,000 d. P200,000

79. What is the VAT due on the transaction?

a. P0 c. P252,000
b. P120,000 d. P264,000

80. What is the threshold of alcohol content that when exceeded shall reclassify wines into distilled spirits?
a. 10% c. 25%
b. 14% d. 30%

81. A imported an article from the US. The invoice value of imported article was $7k ($1-P50). The following were incurred in
relation with the importation: insurance P15,000, freight P10,000, postage P5,000, wharfage P7,000, arrastee charges P8,000,
brokerage fee P25,000, customs duty P50,000, excise tax P30,000, facilitation fee P3,000. A spent P5,600 (gross of VAT) for
trucking from the customs warehouse to its warehouse in Quezon City. The VAT on importation is

A. P60,600 C. P60,000
B. P60,360 D. P50,500

82. Assuming the imported article above was sold for P600,000, VAT exclusive. The VAT payable is
A. P11,640 C. P12,000
B. P11,600 D. P11,400

83. Statement 1. Transitional input tax is the higher between 2% of the value of the beginning inventory including exempt
good or actual VAT paid on such inventory
Statement 2. Presumptive input tax is a 4% input tax on the seller of Sardines, Mackerel, Milk, Cooking Oil, Packed
noodles, Refined sugar
A. True, True C. True, False
B. False, False D. False, True

84. Which of the following transactions is subject to business tax - VAT?

A. Importation of fertilizers and seeds by Gardener
B. Importation of equipment by agricultural cooperative
C. Importation of medicines for diabetes by pharmacies
D. Sale of lechon manok

85. A VAT registered owner of house and lot in a subdivision sold his house and lot for P5,000,000. He also has business which
has gross receipts, cost of sales and operating expense of P1,000,000; P200,000; P500,000. How much is subject to VAT
exempt transaction?
A. P6,000,000 C. P5,300,000
B. P5,800,000 D. P5,000,000

86. Statement 1: A non VAT registered person is always liable to percentage tax
Statement 2: A VAT registered person whose gross sales/receipts did not exceed the VAT threshold may be liable to opt
A. True, True C. False, True
B. False, False D. True, False
87. ABC Corporation, a closely held corporation has an authorized capital stock of 1,000,000 shares with a par value of
P100/share as of January 1, 2020. Of the 1,000,000 authorized shares, 250,000 thereof were subscribed and fully paid by the
following stockholders A-150,000 B-50,000 C-25,000 D-11,500 E-12,500 Total 250,000. On March 1, 2020, ABC corporation
finally decided to conduct an IPO and initially offered 250,000 of its unissued shares to the investing public at P150/share. At
the IPO, two of the existing stockholders, A and B likewise decided to sell their entire 150,000 and 50,000 shares, respectively
to the public also at P150/share. The percentage tax due or the primary offering is

A. P375,000 C. P1,500,000
B. P750,000 D. None

88. The percentage tax due for the sale of A’s share is
A. P225,000 C. P900,000
B. P450,000 D. None

89. The percentage tax due for the sale of B’s shares is
A. P75,000 C. P300,000
B. P150,000 D. None

90. A, is a radio TV broadcasting franchise grantee. It has the following data for the year 2020: gross receipt - sale of airtime
P2,000,000, gross receipts - use of radio station’s communication facilities P500,000, business expenses P700,000. The
franchise tax due is
A. P60,000 C. P75,000
B. P40,000 D. P39,000

91. Which of the following is true

A. VAT is a progressive tax C. Excise tax is an indirect tax
B. OPT is 3% fixed tax D. Income tax is a direct tax

92. Which is subject to the 20% jewelry tax?

a. Dental gold alloys or gold tooth filling c. Pearls
b. Gold plated frames or mounting for eyeglasses d. Silver plated wares

Units # of Units Monthly Rental

A 20 14,900.00
B 15 15,100.00
C 18 13,950.00
D 17 15,500.00

93. Which of the following lessors of residential is/are subject to VAT?

A. B and D C. A, C and D
B. A, B, C and D D. D only

94. How much is the outpur VAT of A , C and D?

A. P429,120; P361,584; P379,440 C. P0; P0; P379,440
B. P383,143; P322,843; P338,786 D. P0; P0; P0

95. How much is the output VAT of B and D?

A. P326,160; P379,440 C. P361,584; P0
B. P291,214; P338,786 D. P0; P379, 440

96. A is a VAT registered dealer of appliances. The following data are for the last quarter of 2016: sales - net of output tax
P6,800,000, purchases - net of input tax P5,500,000, sales returns P200,000, purchase returns P300,000, deferred input tax
P9,500. The VAT payable for the last quarter of 2016 by A is
A. P158,500 C. P80,000
B. P120,500 D. P70,500
97. Statement 1: Constructive receipt occurs when the money, consideration or its equivalent is placed at the control of the
person who delivers the goods without restrictions by payor
Statement 2: Business tax is an indirect tax
A. False, True C. False, False
B. True False D. True, True
98. Statement 1: Input tax on capital goods exceeding P1,000,000 may amortized over, the lower between useful life and
5 years.
Statement 2: Zero rated sales will always result to excess input tax
A. True, True, C. False True
B. False, False D. True, False

99. A domestic corporation paid P40,000 stock transaction tax on INITIAL PUBLIC OFFERING (IPO) of 500,000 shares. The
total shares before the IPO were 1,500,000 shares outstanding. The selling price of IPO per share was
A. 10 C. 4
B. 8 D. 2

100. Any person who in the course of trade or business sells, barters, exchanges, leases goods or properties, renders service and
any person who imports goods shall be subject to
A. Business tax C. Other percentage tax
B. VAT D. Excise tax

GOODLUCK!

Prepared by: Approved by:

CLARISSA GIL H. DUMAGUIN, CPA NELIE M. GALVAN, CPA, MBA

INSTRUCTOR DEAN