Value Added Tax

MULTIPLE CHOICE.
VAT Exempt Transactions

1. Which of the following shall not be subjected to VAT?

I. MP Promotions, vat registered, but gross sales for the year do not exceed ₱3M.
II. M Corporation, a foreign licensor or nonresident lessor who is not vat registered
III. Marilag Company, a domestic corporation required to register under vat system
but failed to register

a. MP Promotions and M Corporation

b. MP Promotions and Marilag Company
c. All of the above
d. None of the above

2. A lessor of residential units shall be exempt from vat when:

I. Annual gross receipts do not exceed ₱3M
II. Monthly rental per unit does not exceed ₱15,000 a month

a. I only c. Either I and II

b. II only d. Both I and II

3. A lessor of commercial units shall be exempt from vat when:

I. Annual gross receipts do not exceed ₱3M
II. Monthly rental per unit does not exceed ₱15,000 a month

a. I only c. Either I and II

b. II only d. Both I and II

4. Which of the following is subject to vat?

a. Sale of vegetables in its original state
b. Sale of fruits in its original state
c. Sale of copra
d. Sale of olive oil

5. One of the following goods is not in its original state

a. Salted eggs c. Polished or husked rice
b. Corn grits d. Refined brown sugar

6. One of the following is not a poultry for VAT purposes

a. Duck c. Goose
b. Fowl d. Fighting Cock

7. One of the following is not a livestock for VAT purposes

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 a. Rabbit c. Pig
b. Cow d. Race Horse

8. JJ owns a mango plantation. He sold his ripe mangoes to Paul, a fresh fruit vendor.
Paul sold the ripe mangoes he bought from JJ to Francis. Who shall be subject to
vat?
a. JJ c. Francis
b. Paul d. None of the above

9. Talion owns Eternal Gardens. He harvested fresh flowers and sold them to Joseph.
Joseph sold the flowers in their original state to Alex. The sale of flowers by Joseph
to Alex shall be:
a. Subject to vat
b. Exempt from vat
c. Exempt from vat or subject to vat depending on annual gross receipts of Pedro
d. Subject to vat if Juan did not subsequently sells it.

10. Which of the following is the benefit of a vat registered taxpayer if he is subject to
zero percent (0%) vat rate?
a. Exclusion from tax audit examiner
b. Not required to file VAT return whether monthly or quarterly
c. He does not have any output tax although he may have an input.
d. He is entitled to tax discount equivalent to 20%

11. Which of the following transactions is subject to value-added-tax?

a. Services subject to other percentage tax
b. Educational services duly approved by Department of Education, CHED, and
TESDA or those operated by the Government.
c. Sale of coal and natural gas
d. None of the above

12. Which of the following shall be exempt from value-added tax?

I. Sales by agricultural cooperatives, duly registered with the Cooperative
Development Authority to their members as well as sale of their products,
whether in its original state or processed form, to non-members
II. Gross receipts from lending activities by credit or multi-purpose cooperatives duly
registered with eh Cooperative Development Authority
III. Sales of non-agricultural, non-electric and non-credit cooperatives duly registered
with the Cooperative Development Authority.

a. I and II only c. II and III only

b. I only d. I, II, and III

13. Which of the following transactions is exempt from value-added-tax?

a. Sale of books, newspapers and magazines
b. Sale of literary works

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 c. Sale of musical composition
d. All of the above

14. All of the following except one, are subject to VAT.

a. Importation of radio and television equipment by broadcasting and television
stations
b. Lease of cold storage rooms in ice plants and cold storage
c. Sale of paintings
d. None of the above

15. Which of the following transactions is exempt from value-added-tax?

a. Medical services such as dental and veterinary services rendered by
professionals
b. Legal services
c. Services arising from employee-employer relationship
d. Services rendered by domestic air transport companies

16. Which of the following is not subject to VAT?

a. Importation of goods in the ordinary course of business
b. Importation of items for personal use
c. Franchise grantees of radio broadcasting whose gross receipts for the preceding
year is ₱9,000,000.
d. VAT-registered person, whose annual gross receipt is less than ₱3M.

17. Which of the following is NOT correct?

a. Non-stock, non-profit private organizations are not subject to vat if their income
from sales is used for non-profit purposes.
b. A vat registered taxpayer can pass on the vat even to non-vat registered buyers.
c. Any business pursued by an individual where the aggregate gross sales or
receipts do not exceed ₱100,000 during any 12-month period, shall be
considered principally for subsistence or livelihood and not in the course of trade
or business.
d. None of the above.

18. 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 customs duties classified as personal and household effects
belonging to residents of the Philippines returning from abroad.

Computation of Vat Due

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19. Gross selling price includes all of the following, except
a. Total amount which the purchaser pays to the seller.
b. Total amount which the purchaser is obligated to pay to the seller.
c. Excise tax
d. Value-added tax

20. Villamin Grill, a Vat registered business in Cavite, has the following data (exclusive
of vat) for the third quarter of the current year.
Sales, food and beverages ₱2,805,500
Sales, wines and beer 1,524,000
Purchases, food and beverages – vat business 1,102,200
Purchases, wines and beer – vat business 1,012,500

The vat payable due for the third quarter is

a. ₱201,340 c. ₱221,480
b. ₱211,470 c. ₱265,780

21. Hananiah Corporation has the following sales and purchases for the quarter ending
December 31, 2014:
October Sales ₱50,000
Purchases 40,000
November & December Sales 100,000
Purchases 80,000
Carry-over input tax from previous quarter 6,000

Zero Rated Sales

22. Which of the following statements is correct?

a. Export sale by a vat registered person is subject to 0% vat
b. Export sale by a non-vat registered person is subject to 3% percentage tax.
c. Both “a” and “b”
d. Neither “a” nor “b”
23. Which of the following statements is correct?
a. Under RA 7916, while an economic zone registered under PEZA is
geographically within the Philippines, it is deemed a separate customs territory
and is regarded in law as foreign soil.
b. Sales by suppliers from outside the borders of the economic zone to the entities
within the separate customs territory are deemed as exports and treated as
export sales.

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 c. Both “a” and “b”
d. Neither “a” nor “b”

24. Which of the following statements is correct?

I. Sale to export oriented enterprise is considered export sales under the tax code
at the level of the supplier of raw materials only.
II. Sale of raw materials or packing materials to an export-oriented enterprise is
considered export sales only when export sales of such enterprise exceed 70%
of total annual production.
a. I only c. Both I and II
b. II only d. Neither I nor II

25. Which among the following is subject to zero percent vat?

a. Sale, importation or lease of passenger or cargo vessel and aircraft including
engine, equipment and spare part thereof for domestic or international transport
operations.
b. Importation of fuel, goods, and supplies by persons engaged in international
shipping or transport operations.
c. Transport of passengers and cargo by air or sea from the Philippines to a foreign
country.
d. All of these.

26. One of the following is a zero-rated sales

a. Export of a person who is not vat registered
b. Sale of nonfood agricultural products
c. Sale of gold to Bangko Sentral ng Pilipinas
d. Sale of cotton and cotton seeds

27. Under the value added tax law, which of the following sales may not be zero-rated?
a. Export sales
b. Foreign currency denominated sales
c. Sale of goods to the Asian Development Bank
d. None of the above

Sale or Lease of Properties

28. In the lease contract, which of the advance payment by the lessee is subject to
output VAT
a. A loan to the lessor from the lessee
b. Prepaid rental
c. A option money for the property, or
d. A security deposit to insure the faithful performance of certain obligations of the
lessee to the lessee to the lessor.

29. Which of the following shall be subject to vat?

a. Sale of residential house and lot by the owners for ₱5,000,000

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 b. Sale of a private car by its owner
c. Sale of commercial property by a real estate dealer for ₱1,500,000
d. All of the above

30. On January 1, 2014, Pedro purchased a condominium unit worth ₱2,000,000 from
Maxima Realty Corporation. A month after, Pedro purchased the adjacent unit for the
same consideration. The purchased of the second (adjacent unit) is
a. Exempt from vat
b. Subject to vat
c. Subject to zero percent (0%) vat
d. None of the above

31. On January 1, 2014, Pedro purchased a condominium unit including a parking space
worth ₱4,200,000 from Maxima Realty Corporation. The value of the condominium
unit, as stated in the contract of sale was ₱3,200,000 while the parking space was
worth ₱1,000,000. The transaction is
a. Exempt from vat
b. Subject to vat
c. Subject to zero percent (0% vat
d. None of the above

32. Which statement is correct? Leasing of property shall be subject to value added tax
on sale of services:
a. If the property is in the Philippines and the lease agreement was executed in the
Philippines;
b. If the property is in the Philippines and the lease agreement was executed
outside the Philippines;
c. If the property is in the Philippines and the lease agreement was executed within
or outside the Philippines;
d. All of the above.

33. Which of the following receipts for 2018 current year from lease of residential units is
subject to vat?
I. Monthly rental per unit-₱14,500; Aggregate annual rent – ₱3,500,000.
II. Monthly rental per unit-₱16,000; Aggregate annual rent – ₱2,800,000.
III. Monthly rental per unit-₱16,000; Aggregate annual rent – ₱3,000,000.
IV. Monthly rental per unit-₱17,000; Aggregate annual rent – ₱4,000,000.
a. IV only c. All of the above
b. III and IV only d. None of the above

Sale of Services

34. Which is true? On sale of service, the tax base in computing for the VAT is
a. Gross selling price
b. Gross receipts
c. Amount per invoice

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 d. Amount shown in the official receipt

35. In the value-added tax on sale of services, the output tax is computed:
a. On billings of the month
b. On collections of the month on all billings made
c. On the contract price of contracts completed during the taxable period
d. Only and strictly on labor performed under the contract for services

36. Which of the following statements is false?

a. Construction in progress is not depreciated until the asset is placed in service.
b. For purposes of claiming input tax, as a purchase of service, the value of which
shall be determined based on the progress billing.
c. The input tax credit on the labor contracted shall be recognized on the month the
payment was made based on the progress billing.
d. Once the input tax has already been claimed while the construction is still in
progress, no additional input tax can be claimed upon completion of the asset
when it has been reclassified as depreciable capital asset and depreciated.

37. The following information and data (net of vat) are from the records of Fantastic 4
Corporation, a vat taxpayer in connection with its construction contracts. They cover
the third quarter of the current year.
• Accounts receivable: July 1-₱180,000; September 30-₱120,000
• Retention receivable: July 1- ₱90,000; September 30 – ₱85,000
• Purchases of materials: July to September – ₱480,000
• Total billings for completed works: July to September – ₱850,000

Vat payable for the quarter is (disregard monthly payments)

a. ₱43,000 c. ₱37,000
b. ₱51,600 c. ₱82,500

38. GJ is a contractor. He entered into a contract on September 1, 2014 which was

completed on September 30, 2014. On the same date, he received the total value of
the contract amounting to ₱5,500,000. GJ spent for the materials used in the
contract which he acquired from value added registered suppliers costing
₱1,500,000. All amounts are exclusive of VAT. The vat payable by GJ for the month
of September is
a. ₱150,000 c. ₱400,000
b. ₱480,000 c. ₱595,000

39. JJ Contractors entered into a contract on October 2013 to build a warehouse for
Francis Corporation. The total contract price amounting to ₱10,000,000 was
received by JJ upon completion on June 30, 2014. Materials purchased during
construction valued at ₱4,000,000 were paid on June 1, 2014 while a construction
equipment worth ₱3,000,000 (net of vat) was purchased on January 1, 2014 with the
following terms; down payment – ₱500,000, balance payable every January 1 until
fully paid starting 2015. The equipment was estimated to last for six (6) years.

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 How much is the vat payable of JJ for June 30, 2014.
a. ₱360,000 c. ₱684,000
b. ₱690,000 d. ₱0

Dealer in Securities

40. A merchant of stock or securities, whether individual, partnership, or corporation,

with an established place of business, regularly engaged in the purchase of
securities and the resale thereof to customers, and who, as a merchant, buys
securities and resells them to customers with a view to the gains and profits that
may be derived there from.
a. Dealer in securities c. underwriters
b. Stock brokers c. Stock merchants

41. A dealer in securities has the following for the year 2012:

Sales, shares held for sale in the ordinary course of ₱5,000,000

trade or business
Sales, shares held as capital asset 1,500,000
Cos of shares, held for sale in the ordinary course of 2,000,000
trade or business
Cost of shares, held as capital asset 500,000
Supplies expense, net of vat 100,000
Rent expense, net of vat 200,000

How much is the vat payable?

a. ₱470,000 c. ₱270,000
b. ₱324,000 c. Vat exempt

Transactions Deemed Sale

42. Which of the statements is correct?

I. Certain transactions which are not actually sale because of the absence of
actual exchange between the buyer and the seller, are considered sale for vat
purposes.
II. Output vat should be imposed on certain transactions which are not actually
sale to avoid a situation where a vat registered taxpayer avail of input vat credit
without being liable for the corresponding output vat.
a. I only c. Both I and II
b. II only d. Neither I nor II

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43. Which statement is correct? The output value added tax on goods or properties
sold:
a. Is based on gross sales and not on net sales
b. Is not imposed on goods exported
c. Is imposed on actual sale only
d. May be due even in the absence of actual sale

44. Which of the following is not a sale and therefore is not subject to the value-added
tax?
a. Transfer, use or consumption not in the ordinary course of business of goods or
properties ordinarily intended for sale or use in the course of business.
b. Distribution or transfer to shareholders or investors of share in the profits of a
VAT-registered person.
c. Distribution or transfer to creditors in payment of debt.
d. Consignment sales.

45. One of the following is a transaction deemed sale under value added tax.
a. Transfer, use or consumption in the course of business of goods or properties
intended for sale or for use in the course of business.
b. Distribution or transfer to creditors in payment of debt.
c. Consignment of goods if actual sale is not made within forty (40) days from the
date the goods were consigned.
d. Retirement from or cessation of business with respect to beginning inventories of
taxable goods existing as of such retirement or cessation.

46. “Deemed Sale” for VAT purpose includes inventories of taxable goods existing at
the time of:
a. Change of control of a corporation thru the acquisition of the controlling interest.
b. Change in the trade name or corporate name of the business.
c. Merger or consolidation.
d. Dissolution of a partnership and the creation of a new partnership.

47. Choose the correct statement(s) from the following”

a. A non-vat registered person could not claim the input vat on its purchases as tax
credit against its business taxes.
b. In the books of a vat registered person, the input vat is an asset account.
c. Purchases on account from vat registered supplier is a source of creditable input
vat.
d. All of the above.

48. Which statement is not correct?

a. The excess input taxes of a taxable month arising from domestic sales may be
carried over to the succeeding month.
b. The excess input taxes of a taxable quarter arising from domestic sales may be
carried over to the succeeding quarter.

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 c. The excess input taxes of a taxable period arising from domestic sales may be
refunded.
d. The excess input taxes of a payable period arising from exports sales may be
refunded.

49. Serbesa Company is a manufacturer of local beer. During a particular quarter, it had
the following transactions (net of VAT):
January 2 : Consigned beer to a retailer in Quezon City amounting to
₱200,000
February 14 : Exported ₱1,000,000 worth of beer to UK.
February 27 : President of Serbesa Company celebrated his birthday,
consuming ₱50,000 worth of beer given to him by the
company as a birthday gift.
March 20 : Declared property dividend of one case of beer for every 10
shares amounting to ₱150,000.

Additional Information: From January to March, domestic sales to whosesalers

amounted to ₱600,000. No beer was returned by the consignee until the end of the
quarter. The output tax for the quarter is:
a. ₱48,000 c. ₱120,000
b. ₱72,000 c. ₱192,000

Vat on Importation

50. Which of the following importation is subject to value added tax?

a. Importation for personal use of the importer
b. Importation intended for resale
c. Importation of machinery for the importers factory
d. All of the above

51. Lester, not a vat registered taxpayer, was sent a package of goods by his friend,
Clifford who was abroad. The package was claimed by Lester. The Bureau of
Customs required him to pay vat on importation. Lester refused to pay the vat
claiming that since he is not vat registered person and that the package sent to him
is intended for personal use only, he should be exempt from paying input vat on
importation. Was Lester’s ground in refusing to pay vat correct?
a. Yes, because only vat registered importers should be subject to vat.
b. No, because importations, unless exempted, should be subject to vat
c. Yes, because the package was intended for personal use, and therefore, he was
not an importer

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 d. No, because Lester may actually sell the packages, depriving the BOC to collect
the applicable input vat.

52. Which of the following statements is correct?

I. An importation of goods by a non-profit charitable organization shall not be
subject to the value added tax.
II. In the case of importation, the importer is not the one liable for the VAT but the
person who shall buy the imported goods
III. Non-exempt persons or entities who acquire tax free imported goods from
exempt persons, entities or agencies shall be considered the importer for
Philippine VAT purposes.

a. I only c. III only

b. I and II only d. None of the above

53. Which statement is correct? Vat on importation

a. Should be paid by the tax exempt importer, if he subsequently sells the goods to
a non-tax exempt purchaser
b. Should be paid by the non-tax exempt purchaser to whom the tax exempt
importer sells it.
c. Is a liability shall either of the tax exempt importer or the non-tax exempt
purchaser
d. Shall not pay the value added tax because the transaction was exempt at the
point of importation.

54. One of the following is not subject to vat on importation

a. Goods brought into 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 importation tax.
d. Goods exempt from customs duties classified as personal and household effects
belonging to residents of the Philippines returning from abroad.

55. Which of the following is not a proper inclusion for the computation of VAT on
imported items?
a. Custom duties on importation
b. Excise tax on importation
c. Invoice price of the imported items
d. Facilitation expense

Input Vat on Capital Goods

56. Input vat on purchases of capital assets shall be spread (amortizes over 60 months
or useful lives of the capital assets if shorter than 60 months) when:

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 a. Capital assets have been acquired from enterprises registered with and located
at the export processing zones
b. Value of asset, excluding VAT, exceeds P1,000,000
c. Aggregate monthly purchases of capital assets, excluding VAT, exceeds
P1,000,000
d. VAT Taxpayer has secured prior approval for him to amortized input tax on
purchases of capital assets.

57. Statement 1: The input value-added-tax on purchase of capital goods valued at

P1,000,000 shall be spread over 60 months if the life of property is less than 5
years.
a. Statements 1&2 are false
b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 and 2 are true

58. For purposes of claiming input vat on depreciable assets, the aggregate acquisition
cost of a depreciable asset in any calendar month refers to the:
a. Total price agreed upon one or more assets acquired during the calendar month
b. Payments actually made during the calendar month
c. Total price agreed upon for one asset only acquired during the calendar month
d. Initial payments made if purchased on installment plan.

59. A taxpayer has excess credit as a result of input taxes paid on purchases of capital
goods. He may:
a. Have his excess tax credit refunded to a VAT registered person
b. Make his application for refund in the subsequent period following the period
during which the purchases were made.
c. Carry-over and apply his excess tax credit against output taxes in the
subsequent period or periods.
d. Use it in payment of any internal revenue tax of a VAT registered person.

60. If the depreciable capital good is sold or transferred within a period of 5 years or
prior to the exhaustion of the amortizable input tax thereon, the unamortized input
tax on the capital goods sold or transferred can be:
a. Claimed as input tax credit in its entirety during the month or quarter when the
sale or transfer was made.
b. Amortized over the remaining life of the capital good
c. Claimed as input tax credit in its entirely or amortized over the remaining life of
the capital good at the option of the taxpayer
d. Expensed outright in the month or quarter the sale or transfer was made

Presumptive Input Vat

61. Persons or firms engaged in the processing of sardines, mackerel and milks and in
manufacturing refined sugar and cooking oil shall be allowed:

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 I. Creditable input tax
II. Transitional input tax
III. Presumptive input tax
IV. Refundable input tax

a. I only c. I, II and III only

b. I and II only d. I, II, III and IV

62. Which of the following business is allowed a presumptive input vat?

a. Manufacturer of canned goods
b. Manufacturer of packed noodles
c. Manufacturer of packed juices
d. Manufacturer of dried fish

Transitional Input Vat

63. Who claim transitional input tax as tax credit against output tax?
a. Processor or manufacturer of cooking oil or refined sugar.
b. Those whose transaction is subject to zero percent VAT
c. VAT taxpayer from being VAT exempt or non-VAT taxpayer
d. Those who sell goods or services to persons or entities whose exemption from
tax is provided be special law or by international agreement to which the
Philippines is a signatory.

64. One of the following shall not entitled to transitional input tax
a. Taxpayers who become liable to vat for the first time under a new legislation
b. Taxpayers who are already vat registered person and also deal in good or
property, the sale of which is exempt but becomes vatable transaction under a
new amendatory law.
c. Taxpayers whose taxable transactions exceeded the vat registration threshold of
P1,919,500 during the year.
d. Taxpayers who elect to revert to being a vat exempt from being vat subject.

65. Once optionally registered as a vat person, the taxpayer shall be liable to output tax
and be entitled to input tax credit on the
a. First day if the month following the registration.
b. First day of the month following the close of the first quarter after registration
c. Tenth day of the month following the close of the first quarter after registration
d. Twenty fifth day following the close of the quarter.

Use the following data for the next two questions:

A vat taxpayer had the following data on its operations for the month of January:

January:

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 Sales, total invoice price ₱ 592,480
Purchases of goods, Vat not included:
From Vat registered persons 100,000
From nonVat registered persons 80,000
Purchases of services, Vat not included

From Vat registered persons 20,000

From non-Vat registered persons 8,000
From persons subject to percentage 10,000
taxes
Salaries of employees 60,000
Other operating expenses 12,000

This is the first month of being liable to the value added tax. Data on inventories at the
beginning of the period bought from VAT registered persons follow:

Inventory at cost P44,800

Inventory at net realizable value 49,000
Value added tax paid on beginning inventory 4,800

66. Input taxes are

a. P24,800 c. P19,200
b. P20,400 d. P19,650

67. The value added

68. tax payable is
a. P43,830 c. P46,680
b. P44,280 d. P59,248

69. Statement 1: The government or any of its political subdivisions, instrumentalities or

agencies, including government-owned or controlled corporations (GOCCs) shall,
before making payment on account of each purchase of goods and/or services
subject to VAT, deduct and withhold a final VAT due at the rate of five percent (5%) of
the gross payment thereof.

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 Statement 2: The five percent (5%) final VAT withholding rate shall represent the net
VAT payable of the seller.

a. Statements 1&2 are false

b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 and 2 are true

70. Empleyo Construction Company entered into a contract with the government to
construct an edifice for a total contract price of 25,000,000. During the month, the
government paid P10,000,000 of which it withheld 5% final withholding tax. How
much is the VAT payable by the company on the government contract?

Installment Sale/Deferred Payment

71. Statement 1: On a sale of real property on installment by a real estate dealer, the
seller shall be subject to VAT on the installment payment received, including
interests and penalties for late payment.
Statement 2: On sale of real property on installments by real estate dealer, where
the Vat is computed not on the consideration in the deed of sale but on the higher
fair market value, the Vat must be billed separately with a specific mention that it is
based on the market value of the property.

a. Statements 1&2 are false

b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 and 2 are true

72. Statement 1: In the case of sale on deferred payments basis not qualifying under the
installment plan, the transaction shall be treated as cash sale and the Vat is payable
in the month of sale.
Statement 2: In the case of a sale on deferred payment basis not qualifying under
the installment plan, payments subsequent to the inital payments shall no longer be
subject to vat.

a. Statements 1&2 are false

b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 and 2 are true

Use the following data for the next two (2) questions:

Ivan, vat registered real estate dealer sold a residential lot on October 2014. The
following information was made available on the terms of the sale:

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 Gross selling price P3,000,000
Initial payments consisting of down payment and
installments in the year of sale 900,000
Balance to be paid in equal installments of
P700,000 starting January 2015 2,100,000

The zonal value of the residential lot was P2,800,000.

73. How much was the output tax due on October 2014?
a. P360,000 c. P108,000
b. P300,000 d. P0

74. How much was the output tax on January 2015?

a. P252,000 c. P108,000
b. P84,000 d. P0

75. Lady sells real property in the course of its business. During the last quarter of 2014,
it had sold a parcel of land under the following terms (vat inclusive):

Total contract price P1,120,000

Downpayment, 10/05/2012 112,000
1st installment 112,000
2nd installment 56,000

The output vat in the last quarter of 2014 is

a. P12,000 c. P26,000
b. P24,000 d. P0
76. Alex is in the course of trade selling real property. During the month of February, it
had the following data (per sales document, inclusive of vat)

Cash sales P560,000

Sales on deferred payment basis (initial payments
exceeds 25% of selling price) 336,000

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 The real property sold for cash had a zonal value of P600,000 exclusive of vat and
the property sold under deferred payment basis had a fair market value of P200,000,
exclusive of vat. How much is the output vat on the sale of real property?

a. P84,000 c. P108,000
b. P96,000 d. 112,320

Mixed Transactions

77. Which of the following is not correct pertaining to the transactions of a business
which is engaged in Vat and non-Vat transactions?
a. Vat invoice shall be issued for vat transactions.
b. Non-vat invoice shall be issued to non-vat transactions
c. Separate Vat invoice for the taxable transactions and non-vat invoice for the Vat
exempt transactions
d. Only one invoice for both Vat and non-Vat transactions shall be issued.

78. Which of the following statements is wrong? When a purchase from a VAT-registered
person is for use both in the VAT and Non-VAT business of purchaser, the VAT
component of the total amount paid for the purchase:
a. May be debited at the time of purchase to the Input Taxes account.
b. May be debited at the time of purchase to the Purchases account
c. Must be allocated between the VAT and Non-VAT business at the end of the
taxable period.

Use the following data for the next two (2) questions:
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 quarter, the taxpayer made sales of goods in the amount of P336,000 inclusive of
vat. The sales of the non-VAT business amounted to P200,000 with a separate
percentage tax of P6,000 for a total of P206,000. During the same quarter, repairs in the
building amounted to P56,000 inclusive of vat. Supplies purchased for the common use
amounted to P11,200 inclusive of vat.

79. The creditable input tax is:

a. P6,000 c. P1,200
b. P5,000 d. P4,320

80. The vat payable is

a. P25,000 c. P31,680
b. P30,000 d. P34,800

81. Data for a trader with one line of business subject to value added tax and another
line of business not subject to value added tax:

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 Sales, vat business, vat included P896,000
Sales, non-vat business 200,000
Purchases of goods, vat business, vat included 224,000
Purchases of goods, nonvat business, vat
included 33,600
Purchase of depreciable asset, for use in vat and
non vat business, vat included 112,000
Purchases of supplies, for vat and non vat
business, vat included 2,240
Rental of premises, for vat and non vat business,
from non vat registered person 22,400

The value added tax payable is:

a. P59,808 c. P82,608
b. P62,208 d. P86,208

Use the following data for the next two (2) questions:
The following data during the month releases to William Company, a VAT registered
person:

Domestic sales, invoice amount P330,000

Domestic sales to export traders 274,996
Export sales 200,000
Purchases of goods for domestic sales 374,000
Purchases of supplied on domestic sales 69,848
Purchase of service 154,000
Purchase of goods for export 55,000

82. Total input taxes is

a. P20,650 c. P19,446
b. P40,350 d. P20,650

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83. Value added tax payable/excess tax if input taxes on export are claimed as tax credit
a. (P5,127) c. P19,446
b. P4,350 d. P20,650

84. A VAT-registered person has the following data:

Export sales, total invoice amount P400,000

Domestic sales, total invoice amount 672,000
Purchase of raw materials, used to manufacture
goods for export and domestic sales, VAT
inclusive 560,000
Supplies used for both export and domestic sales,
VAT inclusive 448,000
Purchase of equipment used in the manufacture
of goods for export and domestic sales, VAT
exclusive 300,000

The amount of input tax which can be refunded or converted into tax credit
certificates at the option of the VAT-registered person is:
a. P50,400 c. P144,000
b. P57,600 d. P86,400

Administrative Provisions

85. Which statement is correct? Receipts or invoices should be issued by a taxpayer:

a. In all cases where the sale of merchandise or services is valued at twenty-five
pesos or more;
b. Where the sale is made by a VAT taxpayer to a VAT taxpayer, regardless of the
amount;
c. Kept by the taxpayer who issued the invoice or receipt for a period invoice or
receipt is issued;
d. All of the above statements are correct.

86. In order that an invoice will qualify as a VAT invoice or receipt for purposes of
claiming tax credit for input tax, it must contain:
I. The VAT registration number
II. The total amount which the purchaser pays or is obliged to pay the seller with
the indication that such amount includes the vat.

a. Only II c. Both I and II

b. Neither I nor II d. Only I

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87. Monthly VAT declaration is filed on or before the:
a. 15th day from the end of each month
b. 20th day from the end of each month
c. 25th day from the end of each month
d. 30th day from the end of each month

88. Quarterly VAT declaration is filed on or before the:

a. 15th day from the end of each quarter
b. 20th day from the end of each quarter
c. 25th day from the end of each quarter
d. 30th day from the end of each quarter

89. As regards individuals, which of the following is not correct?

a. Income tax returns should be filed on or before April 15 of the following year
b. Estate tax returns should be filed within 6 months from the date of death of
decedent
c. Donor’s tax returns should be filed within 30 days after the date the gift was
made
d. VAT returns should be filed within 25 days after the end of each month

90. Mr. Juan Dela Cruz, VAT-exempt, issued VAT invoice to Pedro, VAT-registered
trader. As a consequence, Mr. Juan dela Cruz would:
a. Be liable to VAT without the benefit of input tax credit;
b. Not liable to VAT because he is VAT exempt
c. Be liable to percentage ta, VAT and surcharge of 50%
d. Not be liable to any business tax but may be liable to income tax.

91. Statement 1: If the sale involves goods, properties or services some of which are
subject to and some of which are VAT zero-rated or VAT exempt, the invoice or
receipt shall clearly indicate the break-down of the sales price between its taxable,
exempt and zero-rated components, and the calculation of the vat on each portion of
the sale shall be shown on the invoice or receipt.

Statement 2: The seller has the option to issue separate invoices or receipts for the
taxable, exempt, and zero-rated components of the sale.

a. Statements 1&2 are false

b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 and 2 are true

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