394285032-Chapter-3 PDF

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Multiple Choice- Theory: Part 1 1. Which of the following entities below is not considered as a business? a. A sari-sari store with P 500,000 annual sales b. A new stand with sales exceeding P100, c. A cigarette vendor with sales not exceeding P 100, d. An employed professional earning part-time sel...

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Multiple Choice- Theory: Part 1 1. Which of the following entities below is not considered as a business? a. A sari-sari store with P 500,000 annual sales b.

A new stand with sales exceeding P100,000

c. A cigarette vendor with sales not exceeding P 100,000 d. An employed professional earning part-time self-employment income not exceeding P 100,000 2. Which of the following is not considered as engaged in business? a. A purely self-employed individual b.

Self employed and employed individual

c. A purely employed individual d. A and B 3. Which of the following is not subject to business tax even if made by a registered business? a. Sale of goods b. Sale of services c. Sale of properties considered as ordinary assets d. Sale of properties considered as capital assets 4. Which is not engaged in business? a. A corporate b.

A broker

c.

An agent

d.

A security dealer

5. Which of these is least likely to be subjected to business tax? a. Sale of stocks held as inventory b. Sale of bonds held as inventory c. Sale of stocks held as investment d. None of these

6. Which is considered engaged in business even if not regularly engaged in trade? a. A non resident seller who exports into the Philippines b. An importer who imports goods into the Philippines c. A seller who makes a one time sale of real property d. Any seller which sells goods or services at a price above P 100,000 during the year 7. Which of the following is considered to be engaged in business? a. Government agencies b. Non-profit organization c. Sales agent d. Consultant a. A and B b. C and D c. B and C d. None of these 8. Which is of these is always presumed to be made in the course of business, hence, subject to business tax under the regulations? a. Export sales b. Importation c. Domestic sales d. All of these 9. The business tax on exempt sales is a. VAT b. Percentage tax c. A or B d. None 10. The consumption tax on importation is a. VAT

b. Percentage tax c. A or B d. None 11. The consumption tax on domestic sales is a. VAT b. Percentage tax c. A or B d. None 12. The business tax on services specifically subject to percentage tax is a. VAT b. Percentage tax c. A or B d. None 13. Which is more likely to qualify as a marginal income earner? a. Artist b. Consultant c. Sales agent d. Operators of a single unit tricycle 14. Statement 1: Sellers of goods are subject to percentage tax. Statement 2: Sellers of services are subject to VAT. Which statement is correct? a. Statement 1 b. Statement 2 c. Both statements d. Neither statement 15. Statement 1: Both the husband and the wife are subject to either VAT or percentage tax.

Statement 2: The husband may pay VAT while the wife may pay percentage tax. Which statement is false? a. Both statements b. Neither statements c. Statement 1 only d. Statement 2 only 16. Statement 1: An employed taxpayer will pay annual registration fee. Statement 2: A self-employed taxpayer will pay annual registration fee. Which statement is correct? a. Statement 1 b. Statement 2 c. Both statements d. Neither statement 17. The term gross selling price excludes a. The contract price of the goods sold b. Discounts which are contingent upon future events c. Delivery charges d. Sales returns and allowances 18. The term gross receipts excludes a. Reimbursements for customer expenses paid by the service provider b. Reimbursements for out-of-pocket expenses incurred by the service provider c. Advances made by the client for services yet to be rendered d. Cash collections for services rendered 19. 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 the contractor-service provider

c. Judicial consignation by the payor of the contract price which the service provider wish to donate to the payor d. Collection of revenue for past services rendered 20. Which is part of gross receipts? a. Amounts received which will be remitted to others persons b. Receipt of notice from a debtor to offset the consideration of the service for the depth of the service provider c. Receipt from bank loans d. Receipt from insurance of stocks or issuance of certificates of indebtedness

Multiple Choice- Theory: Part 2 1. A non -VAT registered service provider shall pay a. 3% percentage tax on its gross receipts b. 12% VAT on its value added c. 12% VAT on its export sales or receipts d. 3% percentage tax on its export sales 2. Which must be present to construe the existence of a business? a. Regularity of transaction b. Offering of services or goods to the public for a profit c. Actual presence of profit during the period d. Both A or B 3. A person who made a one-time or casual sale of properties is a. Exempt from business tax b. Subject to percentage tax c. Subject to value added tax d. Subject to either percentage tax or value added tax 4. A VAT registered person shall pay

a. 3% percentage tax and VAT b. 12% VAT on its sales or receipt c. 12% VAT on its value added d. 12% VAT on its export sales 5. Who is subject to VAT? a. Those who optionally register as VAT taxpayer b. Those who are mandatorily required to register as VAT taxpayer c. Those who are registrable to VAT d. Any of these 6. Who are not required to register to the VAT system? a. Those who are below the VAT threshold b. Those whose only sales are exempt sales c. Those who only derive receipts from services specifically subjects percentage tax d. Any of these 7. A non-VAT registered seller of goods shall pay a. 3% percentage tax on its gross receipts b. 12%percentage tax on its value added c. 3% percentage tax on its sales d. 12% VAT on its gross receipts 8. A VAT registered seller of goods shall be subject to a. 12% output VAT on sales b. 12% output VAT on gross receipt c. 3% percentage tax on sales d. 3% percentage tax on gross receipts 9. Who is entitled to claim (deduct) input VAT against output VAT against output VAT? a. A VAT registered persons only

b. VAT registrable persons only c. Non-VAT registered persons d. All of these 10. Who pays percentage tax? a. Those who exceed the VAT threshold and opted to be register as non-VAT b. Those who did not exceed the VAT threshold but are registered as VAT taxpayers c. Only those service providers specifically subject to percentage tax d. Those providers of services specifically subject to percentage tax and those who sales or receipt in any 12- month period are below the VAT threshold 11. When the receipts from services specifically subject to percentage tax exceeds rhe VAT threshold, future receipts from these services are a. Exempt from percentage tax b. Still subject to the same percentage tax c. Subject to VAT d. Subject to 3% percentage tax 12. A VAT registered person who did not exceed the VAT threshold will pay a. VAT b. Percentage tax c. Both A and B d. Either A or B at his discretion 13. Once the vatable sales or receipts exceeds the VAT threshold, future monthly sales from vatable sales or receipts shall be subject to a. 3% percentage tax b. Percentage taxes of various rates c. 12% VAT d. 0% VAT 14. A marginal income earner shall pay a. 3% percentage tax

b. 12% VAT c. Either A or B d. Neither A nor B 15. The export sales of VAT registered taxpayer is a. Subject to zero-rated VAT b. Exempt from business tax c. Subject to 12% VAT d. Subject to 3% percentage tax 16. The export sales of non-VAT registered taxpayer is a. subject to zero rated VAT b. Exempt from business tax c. Subject to 12% VAT d. Subject to 3% percentage tax 17. A non-VAT person with exempt sales exceeding the VAT threshold is still a. Exempt from business tax on exempt sales b. Exempt from VAT on all its sales c. Exempt from percentage tax on all sales d. A and B 18. A VAT-registered person who exceeded the VAT threshold will pay a. VAT b. Percentage tax c. Both A and B d. Either A or B at his discretion 19. A non-VAT registered person who exceed the VAT threshold shall pay a. VAT b. Percentage tax

c. Both A and B d. Either A or B at his discretion 20. A non-VAT registered person who did not exceed the VAT threshold shall pay a. VAT b. 3% percentage tax c. Percentage tax at various rates d. Either A or B at his discretion 21. What is the general VAT threshold? a. P 1,919,800 b. P 1,919,500 c. P 1,500,000 d. P 10,000,000 *P3,000,000 22. Which is a special VAT threshold? a. P 1,919,800 b. P 1,919,500 c. P 1,500.000 d. P 10,000,000 *P3,000,000 23. The mandatory or voluntary registration as VAT taxpayers under the special threshold is a. Revocable anytime b. Revocable after the lapse of three years c. Revocable within a year d. Perpetually irrevocable 24. Mandatory or voluntary registration as VAT taxpayer under the general threshold is a. Revocable anytime

b. Revocable after the lapse of three years c. Revocable within a year d. Perpetually irrevocable 25. The VAT registration upon commencement of operation based upon expectation of exceeding the VAT threshold shall be a. Revocable anytime b. Revocable after the lapse of three years c. Revocable within a year if sales do not actually exceed the VAT threshold. d. Perpetually irrevocable. Multiple Choice- Problems 1 1.Mrs. Belle, self-employed, generated the following rreceipts during the year: Proceeds of health insurance

P 300,000

Receipts from business advisory services Receipts of rentals from boarding house

P 250,000 P 100,000

What is the total amount subject to business tax? a. P 100,000 b. P250,000 c. P 350,000 d. P 650,000 2. A person engaged in business sold the following properties: Sales of goods held for sale

P 200,000

Sales of personal residence

P 2,000,000

Sales of personal car

P 500,000

Compute the sales in the course of business subject to business tax. a. P 0 b. P 200,000 c. P 2,200,000

d. P 2,700,000 3. Mr. Julio, employed, received the following from his employer: Proceeds of property insurance

P 200,000

Proceeds of bank loan

P 300,000

Compensation income

P 500,000

What is the amount subject to business tax? a. P 0 b. P 200,000 c. P 300,000 d. P 500,000

4. Mr. Jun Kim, a security broker effected the sales of several securities resulting of Kim Jong-un in the following commissions: Sales

commission

Sales of stocks

P 120,000

P 1,200

Sales of bonds

P 280,000

P 2,800

Total

P 400,000

P 4,000

Compute the amount of receipts or sales of Mr. Jun Kim subject to business tax. a. P 0 b. P 4,000 c. P 400,000 d. P 404,000 5. Assuming Kim Jong-un is an investor in stocks, what is the amount subject to business tax? a. P 0

b. P 4,000 c. P 400,000 d. P 404,000 6. Mr. Masipag had annual gross receipts not exceeding P 100,000. During the month, hi had made the following sales: Sales of car rugs

P 2,000

Sales of cigarettes

P 3,000

Sales of candies

P 3,000

Total

P 8,000

Compute the total amount subject to business tax. a. P 0 b. P 2,000 c. P 5,000 d. P 8,000 7. Mr. Kim Jong, a security dealer, sold the following during the month: Sales of securities for own account

P 400,000

Commission income on sale of securities of clients

P 36,000

Sale of vacant lot held as investment

P1,000,000

What is the amount subject to business tax? a. P 0 b. P 36,000 c. P 436,000 d. P 1,436,000 8. A non-stock charitable organization realized the following during the month: Membership contributions Donation from various donors Sales of souvenirs

P 300,000 P 400,000 P 200,000

Compute the amount subject to business tax. a. P 0 b. P 36,000 c. P 500,000 d. P 900,000 9. JDC Corporation, a merchandiser, made the following sales during the month: Sales of merchandise

P 200,000

Commission income from consignors

P 50,000

Sales of stocks investments

P 180,000

Compute the amount subject to business tax. a. P 200,000 b. P 250,000 c. P 380,000 d. P 430,000 10. Mang Indo has a sari sari store with P 500,000 annual sales. He had the following sales during the month Sales of various merchandise Cash donated bi his brother Cash from proceeds of bank loan

P 30,000 P 200,000 P 300,000

Compute the amount subject to business tax. a. P 0 b. P 30,000 c. P 230,000 d. P 530,000 11. Mr. McCullot is a consultant. During the month, he has only one client from which he derived the following receipt: Professional fees

P 150,000

Less: withholding tax

P 7,500

Net amount received

P 142,500

What is the amount subject to business tax? a. P 0 b. P 7,500 c. P 142,500 d. P 150,000 12. Mang Pandong is a farmer. He sold his agricultural land costing P 200,000 for P 1,000,000 to start a palay trading business. What is the amount subject to business tax? a. P 0 b. P 200,000 c. P 800,000 d. P 1,000,000 13. Ms. Cumacaliua is con currently employed to Cuaman Corporation and Paatras Company. He received the following during the month: Cumanan Proffesional fees

Paatras

P 50,000

P 40,000

Less: Creditable withholding tax Loan repayment

P 7,000 -

P 6,000

SSS, PhilHealth, HDMF

P 3,000

-

Net pay

P 40,000

Compute the amount subject to business tax. a. P 0 b. P 62,000 c. P 77,000 d. P 90,000

P 12,000

P 22,000

14. Effective 2015, Kanlaon Corporation, a VAT-taxpayer, cahnged its accounting period to a fiscal year ending every August 30. What is the deadline for the first quarter VAT return under the new accounting period? a. September 25, 2015 b. September 25, 2016 c. November 25, 2015 d. December 25, 2015 15. In the immediately preceding problem, the third quarterly VAT return shall be filed on or before a. May 20, 2016 b. May 25. 2016 c. June 20,2016 d. June 25, 2016

Multiple Choice- Problem 2 1. Jackpruit, a seller of goods, had the following transactions in January 2015. Cash sales

P 200,000

Credit/ Installment sales (40% collected) Sales return and allowances Freight-out charged to customers

300,000 40,000 20,000

What is the amount subject to business tax? a. P0 b. P460,000 c. P480,000 d. P500,000 2. Atty. Saturday Sabado and Atty. Sunday Domingo formed a general professional partnership for the exercise of their legal profession. Their partnership Sabado-Domingo Law Office started operation on July 1, 2014 as a VAT taxpayer. The partnership adopted the calendar year basis.

The professional partnership shall file its first monthly VAT return on a. July 20,2014 b. July 30,2014 c. August 20,2014 d. August 30,2014 3. In the intermediately preceding problem, what is the deadline of the first quarterly VAT return? a. July 30,2014 b. August 30,2014 c. August 25,2014 d. October 25,2014

4. A service provider had the following income during the month: Fees, paid in cash and checks

P 80,000

Fees, paid in notes

150,000

Advances by clients for future services

20,000

Reimbursement for out-of-pocket expenses

40,000

Reimbursement for client expenses

20,000

Total

P 330,000

Compute the amount subject to business tax. a. P350,000 b. P250,000 c. P160,000 d. P140,000 5. A taxpayer had the following sales or receipt in the past twelve months: Exempt sales Services subject to percentage tax

P1,500,000 400,000

Other sales

800,000

Total

P2,700,000

What is correct? a. The taxpayer is subject to VAT on all sales. b. The taxpayer is subject to VAT on taxable sales other than exempt sales. c. The taxpayer is subject to percentage tax on taxable sales other than exempt sales. d. The taxpayer is subject to percentage tax on all sales. *The taxpayer is subject to VAT on other sales.

6. Kudarat Company had the following sales and receipts data in the past twelve months: Exempt sales

P200,000

Services subject to percentage tax

400,000

Other sales

2,000,000

Total

P2,600,000

Which is correct? a. The taxpayer is subject to VAT on other sales. b. The taxpayer is subject to VAT on taxable sales other than exempt sales. c. The taxpayer is subject to percentage tax on taxable sales other than exempt sales. d. The taxpayer is subject to percentage tax on all sales. 7. The following data pertains to a business taxpayer during a quarter: January February

March

Revenue (Sales)

P200,000

P240,000

P230,000

Cash collections

P180,000

P240,000

P220,000

Which of these properly reflect the monthly reporting of a non-VAT service provider?

January

February

March

a. P170,000

P240,000

P640,000

b. P200,000

P250,000

P220,000

c. P180,000

P240,000

P220,000

d. P200,000

P250,000

P670,000

8. Which of these properly reflect the monthly reporting of a non-VAT seller of goods? January February

March a. P170,000

P240,000

P230,000

b. P200,000

P250,000

P220,000

c. P170,000

P240,000

P640,000

d. P200,000

P240,000

P230,000

9. Which of these properly reflect the monthly reporting of a VAT service provider? January February

March a. P180,000

P240,000

P640,000

b. P200,000

P250,000

P220,000

c. P170,000

P240,000

P640,000

d. P200,000

P250,000

P670,000

10. Which of these properly reflect the monthly reporting of a VAT seller of goods? January February

March a. P170,000

P240,000

P230,000

b. P200,000

P240,000

P670,000

c. P170,000

P250,000

P640,000

d. P200,000

P250,000

P230,000

11. Mrs. Bote sells cakes to jeepney drivers who patronize her hot and sweet cakes. During the month, Mrs. Bote sold P300,000 worth of cakes and collected P280,000. What is the amount to be reported for business tax purposes? a. None b. P280,000 c. P300,000 d. Indeterminable

12. The No-Taste is a restaurant offering local cuisines. Which is correct? a. No-Taste is engaged in the sale of service. b. No-Taste is engaged in the sale of goods. c. No-Taste is engaged both in the sale of goods and services. d. No-Taste is not engaged in business. 13. Marilyn is a beautician operating a beauty parlor. She is indebted to Zeus for P30,000. Unable to pay her debt, Marilyn agreed to render services to Zeus. In return, Zeus cancels Marilyn's indebtedness. Which is correct? a. The cancellation of the P30,000 indebtedness is a gratuity subject to donor's tax. b. The cancellation of the P30,000 indebtedness is exempt from income tax. c. The cancellation of the P30,000 indebtedness is a constructive receipt of Marilyn subject to business tax. d. The cancellation of the P30,000 indebtedness is a c...