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TitleTax Quizzer
TagsValue Added Tax Invoice Taxes Income Tax Withholding Tax
File Size407.5 KB
Total Pages33
Document Text Contents
Page 1

1. Which is incorrect with respect to business taxes?

a. VAT is a top-up tax on sales

b. Percentage tax is an expensed tax

c. VAT is due quarterly but is paid monthly

d. Percentage tax is an explicit consumption tax



2. Which of the following transactions has no consumption tax?

a. Importation

b. Domestic consumption from VAT suppliers

c. Domestic consumption from non-VAT suppliers

d. Exportation



3. Which of these importations is subject to VAT?

a. Lumber

b. Flour

c. Canned tuna

d. Wine



4. The sale of which of the following is exempt from business tax?

a. Urea fertilizer

b. Hybrid corn seeds

c. Herbicides

d. Chicken dung



5. Which of the following ingredients is exempt from the VAT on

importation?

a. Ingredients in the manufacture of Improvised Explosive Devices

b. Ingredient used in the manufacture of human foods

c. Ingredients used in the manufacture of pet feeds

d. Ingredients used in the manufacture of poultry or livestock feeds



6. Which of the following agricultural products is not exempt from

business tax on sales?

a. Ginseng

b. Coffee beans

c. Tobacco leaf

d. Tea leaf



7. Mabiga Cooperative is an agricultural cooperative which processes

the coffee production of its members for sale to NesFe Corporation,

a coffee processing company selling bottled instant cofee. Mabiga

imported a coffee drier from Colombia Coffee Machineries

Corporation. After 3 years of active use, Mabiga disposed the drier

to Pedro Mabanag, a member.



Which of the following is subject to VAT?

a. Importation of coffee drier from Colombia

b. Sale of coffee drier to Mr. Mabanag

c. Sale of coffee to NesFe Corporation

d. Sale of coffee by members to Mabiga Cooperative

Page 2

8. Ammacian Corporation imported goods from abroad for domestic sale.

The details of the importation is given below:



Peso value of supplier’s invoice P 2,000,000
Other cost incurred to bring the goods to Philippine

port

70,000

Other inland costs prior to release of goods from

Customs

85,000

Customs duties 10%

Freight cost to bring merchandise to Ammacian’s
warehouse





Compute the Customs duties on the dutiable value.

a. P 207,000 c. P 215,500

b. P 200,000 d. P 208,500



9. Compute the VAT on importation on the landed cost.

a. P 258,600 c. P 282,600

b. P 283,440 d. P 284,460



10. Which is subject to business tax?

a. Business for subsistence

b. Privilege stores

c. Non-resident sellers

d. All of these



11. Which is considered pure consumption tax?

a. VAT on importation

b. Percentage tax

c. Value Added Tax on sales

d. Excise tax



12. Who is statutory liable to pay the VAT on importation?

a. The non-resident seller

b. The resident buyer

c. Both seller and buyer

d. The Bureau of Customs



13. A business taxpayer had the following summarized transactions

during the quarter:



Cash sales P 400,000

Sales on credit (account sales) 600,000

Installment sales (P30,000 collected) 100,000

Sales returns and allowances 20,000

Quota discounts 10,000

Advances for goods not yet delivered 20,000

Purchase of goods, including of P72,000 VAT

passed on by sellers 672,000



Compute the gross selling price.

Page 16

75. A manufacturer of perfume oils which newly registered as VAT

taxpayers during the quarter shall not be allowed which of the

following?

A. Transitional input VAT

B. Presumptive input VAT

C. Regular input VAT

D. None of these

Page 17

TAXATION – TEST BANK

1. Hayden Co, a resident citizen, earned the following interest income
gross of applicable taxes:

Interest income from PNB, a domestic bank P 40,000
Interest income from SVB, a domestic bank* 30,000
Interest income from THE, a non-resident foreign bank* 20,000
Interest income from XHE, a resident foreign bank* 10,000

*in Philippine Peso equivalent


Compute the amount of final tax.
a. P 11,000 c. P 8,000
b. P 10,250 d. P 0


2. If Hayden is an OFW, what compute the amount subject to regular tax.

a. P 40,000 c. P 20,000
b. P 30,000 d. P 0


3. If Hayden is a resident citizen, compute the amount subject to

regular tax.
a. P 50,000 c. P 30,000
b. P 40,000 d. P 20,000


4. Miss Darrelle Joe is a self-published author. She established a

printing press and a marketing distribution business for her books
which sells wildly hot like chili-flavored pizza. She does not know
anything about taxation so she consulted you about what type of
income tax she will pay.

What advice would you give her?
a. You are subject to regular tax not to final tax so file three

quarterly income tax returns every 60 days following the end of
the first three quarters and file an annual consolidated income
tax return on or before April 15 of the following year.

b. You are subject to final tax on your book royalties. There is no
need to file regular tax returns.

c. You should pay regular income tax on your net income and 10%
final tax on your royalties from your books to avoid hassle with
the tax authorities.

d. You are subject to regular tax. You shall file three quarterly
income tax returns on or before before April 15, August 15, and
November 15 respectively and file a consolidated annual income
tax return on or before April 15 of the following year.


5. Which is subject to creditable withholding tax?

a. Winnings
b. Dividends
c. Professional fees
d. Royalties


6. Who is not required to file the quarterly income tax return?

a. Individuals who are purely engaged in business
b. Individuals who are purely engaged in profession
c. Partnerships and corporations
d. Individuals who are purely employed


7. Withholding taxes are the primary liability of the

a. Earner or payee of income
b. Payor of income
c. Payee and payor of income
d. Collecting agency of the government


8. NFC, Inc. is due to pay the following expenses:

Page 32

TAXATION – TEST BANK

a. P 12,000 c. P 45,000
b. P 38,000 d. P 40,500



104. Reek Review Center Inc. provides preparatory review services for

professional examinees. Reek had the following expenses:

Salaries of reviewers P 800,000
Administrative staff salaries 80,000
Marketing salaries and other expenses 150,000
Rent expense on review rooms 300,000
Rent on administrative offices 100,000
Printing costs of reviewee handouts 100,000
Classroom & library electricity expense 30,000
Office utilities 40,000
Classroom supplies expense 5,000
Loss on sale of old chairs 15,000
Interest expense 50,000

Compute the amount of direct cost of services to be presented in the
income tax return.

a. P1,230,000 c. P1,235,000
b. P1,325,000 d. P1,285,000


105. Xhelsy Drugstore Inc. recorded a P1,200,000 total deductible

expense and the following sales:

Customers
Regular Senior citizens
Gross sales P 5,000,000 P 1,200,000
Cost of sales 3,000,000 800,000

Xhelsy adopts a policy of giving senior citizens a 25% discount.
Consequently, it granted P300,000 total senior citizens’ discounts
during the period.

Compute the taxable income.

a. P1,200,000 c. P 960,000
b. P1,100,000 d. P 900,000



106. In 2016, Baguio Realty Corporation participated in the “Adopt-a-

School Program” by contributing its services to a public school in
La Trinidad, Benguet. The agreed value fixed in the memorandum of
agreement for the construction of the public school building was
P1,000,000. However, Baguio Realty was able to complete the same at
a total cost of P800,000. The “Adopt-a-School Program” is a priority
program in 2016.

Compute the total allowable deduction from the above contribution.
a. P1,200,000 c. P 1,000,000
b. P 800,000 d. P 900,000



107. An individual taxpayer compiled the following income, expense and

personal exemptions.

2013 2014 2015
Compensation income P 20,000 P 220,000 P 80,000
Business gross income 470,000 400,000 500,000
Deductions 500,000 420,000 420,000
Personal exemptions 50,000 50,000 100,000

Page 33

TAXATION – TEST BANK

Compute the taxable income in 2014.
a. P170,000 c. P 160,000
b. P150,000 d. P 140,000


108. Compute the taxable income in 2015.

a. P10,000 c. P 70,000
b. P20,000 d. P 60,000


109. A taxpayer had the following interest expense and interest income

in 2016:

Interest expense on bank loan P 100,000
Interest income from time deposit, gross 10,000
Interest income from promissory notes 40,000

Compute the allowable deduction for interest expense.

a. P 96,700 c. P50,000
b. P 83,500 d. P 100,000




110. The Crosby Manufacturing Corporation usually bills its foreign
branch at cost; however, it entered into an advanced pricing
agreement (APA) with the BIR which fixed its cross-border pricing to
its foreign branch at 150% of cost.


Crosby compiled the following costs and sales during the year:



Sales through the foreign branch:
Philippines Branch

Sales P 7,000,000 P 12,000,000
Less: cost of sales 7,000,000 7,000,000
Gross income P 0 P 5,000,000


Sales to unassociated domestic enterprises:
Philippines Branch

Sales P 3,000,000
Less: cost of sales 1,200,000
Gross income P 1,800,000
Total gross income P 5,300,000


Using the advanced pricing agreement, compute the total gross
income subject to Philippine taxation?
a. P 11,300,000 c. P 8,800,000
b. P 7,800,000 d. P 6,800,000

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