University of Perpetual Help System laguna – Isabela Campus

Minante 1, Cauayan City, Isabela

College of Business and Accountancy

Business Taxation
2 nd
Semester, A.Y. 2017 - 2018

Name: ________________________________________ Date: ___________

Course Year & Section: _____________________ Score: __________
Midterm Quiz 1

(Erasure/Alteration means wrong)

I. MULTIPLE CHOICE. Choose the best answer. Encircle the letter of your choice. Show you
solutions for questions 11 to 20.

1. When to file VAT return? (1 Point)

A. Monthly
B. Yearly
C. Quarterly
D. Weekly

2. Which of the following are zero-rated transactions? (1 Point)

A. Sale of services to Asian Development Bank

B. Sale of services to International Rice Research Institute
C. Sale of gold to Bangko Sentral ng Pilipinas
D. Sale of services to duly registered and accredited enterprises with Philippine
Economic Zone Authority.

3. What input taxes may be credited? (1 Point)

A. Input taxes from non-VAT suppliers

B. Input taxes from purchase of direct labor
C. Input taxes from importation of goods for sale
D. Input taxes from importation of personal and household effects.

4. Diety is non-stock, non-profit organization made an importation of agricultural food product

in its original state from a Chinese farmer amounting to P 2,240,000. If you are the Customs
Collector, how will you treat such importation?

A. Subject to 12% VAT.

B. Subject to zero-rated VAT.

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 C. Exempted from VAT.
D. Subject to 3% other percentage tax.

5. Mr. San Diego approached you and asked for your professional help with regard to a sale of
his ancestral house and lot in the amount of P 5,000,000. Your advise would be: Such
transaction will be subject to

A. 12% VAT
B. Zero-rated VAT
C. Exempt from VAT
D. 3% other percentage tax

6. Call Center operated by a domestic enterprises in Makati that exclusively the reservations of
a hotel chain which are all located in North America. The services are paid for in US $ and
duly accounted for with the rulings of Bangko Sentral ng Pilipinas. Is subject to:

A. 12% VAT
B. 0% VAT
C. Exempt from VAT
D. None of the above

7. Three of the following are exempt from the value-added tax. Which is the exception?

A. Importation of books and any newspapers, magazines, review or bulletin.

B. Importation of agricultural and marine food products in their original state.
C. Importation of petroleum products and their raw materials.
D. Importation or sale of fish, prawn, livestock and poultry feeds.

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

A B C D
No. of apartment units 20 15 10 10
Monthly rent/unit P9,000 P10,000 P12,000 P14,000

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

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

A. Importation of frozen meat

B. Importation of apples for personal consumption

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 C. Importation of bamboo poles
D. Importation of grapes for sales

10. Which statement is wrong? Value-added tax on importation of goods:

A. Is imposed on an importation for sale or for use in business.

B. Is imposed on an importation for personal use.
C. Should be paid prior to removal from customs custody.
D. Is not available as input tax even if related to business.

(input tax on importation is availbale only for business related importation)

11. The following events happen in a VAT enterprise:

June - perfomance of services
July - received an invoice amount of P 112,000
August - paid the services.

When and how much input VAT will be claimed?

A. July, P12,000
B. August, P12,000
C. July, P13,440
D. August, P13,440

12. The following accounting records reveal:

Accounts Receivable, Beginning P 100,000

Accounts Receivable, Ending 110,000
Inventory, Beginning 50,000
Inventory, Ending 65,000
Purchases 90,000
Sales 250,000
Purchase Discount 5,000
Sales Return 10,000
Collections 200,000
Cost of Sales 70,000

How much is the vatable sales?\

A. P 250,000
B. P 230,000
C. P 240,000

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 D. P 200,000

13. How much is the outout VAT?

A. P 27,600
B. P 30,000
C. P 28,800
D. P 24,000

14. How much is the input VAT?

A. P 10,200
B. P 8,400
C. P 10,800
D. None

15. A VAT registered person is engaged in the sale of VAT taxable goods and at the same time is
also engaged in non-VAT business, in the same business establishment. During the year, total
sales invoice of the VAT business amounted to P336,000. The sales of the non-VAT business
amounted to P200,000 with a separated percentage tax of P6,000 for a total of P206,000.
During the same quarter, repairs on the building amounted to P50,000 plus value added tax of
P6,000. Supplies purchased for common use amounted to P10,000 plus P1,200 VAT.

The creditable input tax is

A. P6,000
B. P7,200
C. P1,000
D. P4,320

16. Using the above data, the VAT payable is

A. P24,000
B. P25,000
C. P31,680
D. P26,400

17. A, is a VAT – registered dealer of appliances. The following data are for the last quarter of
2006

Sales, net of output tax P 6,800,000

Purchases, net of input tax 5,500,000
Sales return 200,000

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 Purchase return 300,000
Deferred input tax (carried over from the third quarter of 2006 9,500

The VAT payable for the last quarter of 2006 by A is

A. P120,500
B. P70,500
C. P80,000
D. P158,500

18. A taxpayer registered under the VAT system on January 1, 2007. His records during the
month show

Value of inventory as of December 31, 2006, purchased from VAT registered

persons - P50,000
VAT paid on inventory as of December 31, 2006 6,000
Value of inventory as of December 31, 2006, VAT exempt goods 60,000
Sales, net of VAT 140,000
Sales, gross of VAT 45,000
Purchases, net of VAT 70,000

VAT payable is

A. P11,100
B. P7,221
C. P3,100
D. P18,100

19. A imported an article from USA. The invoice value of the imported article was $7,000
($1:P50). The following were incurred in relation with the importation

Insurance P15,000
Freight 10,000
Postage 5,000
Wharfage 7,000
Arrastre charges 8,000
Brokerage fee 25,000
Facilitation fee 3,000

The imported article is subject to P50,000 customs duty and P30,000 excise tax. A spent
P5,000 for trucking from the customs warehouse in Quezon City. The VAT on importation is:

A. P50,000
B. P35,000
C. P50,500
D. P60,000

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20. 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?

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