Philippine Christian University

Sampaloc 1, Dasmarinas City, Cavite

College of Business and Technology

Name: __________________________________Course/Year:____________Date:__________

BUSINESS TAXATION (PRELIM EXAM) – SET B

Multiple Choice:
Identify the choice that best completes the statement or answers the question.

_______1. Mr Q. is a dealer of liquors. On his sales in the Philippines, his tax is:
a. Excise tax c. Percentage tax
b. Value-added tax d. None of the above

_______2. Which statement is considered correct?

a. An excise tax which imposes a tax based on weight or volume capacity or aby other physical unit of
measurement is called specific tax;
b. An excise tax which imposes a tax based on selling price or other specified value of the article is called
ad valorem tax.
c. A percentage tax which is imposed whether the transaction resulted in a gain or loss is called transaction tax.
d. All of the above.

_______3. Statement 1: The Output value-added tax is computed by multiplying the gross selling price
12%, or multiplying the total amount indicated in the invoice by 12/112.
Statement 2: The Output value-added tax is computed by multiplying the total amount indicated in the invoice
by 12%.
a. True, true b. False, false c. True, false d. False, true

_______4. Which of the following statements is wrong: the value-added tax is:
a. Not an expense
b. A tax credit
c. Not a part of the gross selling price
d. On purchases, is a part of the cost of inventory.

_______5. Value Added Tax as a/an

a. Indirect tax c. Local tax
b. Direct tax d. Personal tax

______6. Which statement is correct?

a. Zero-rated sales is exempt from the VAT
b. A person whose sales or receipts do not exceed 250,000 is exempt from VAT and OPT
c. A person who issues a VAT invoice on a VAT exempt transaction is nevertheless subject to VAT on the
said transaction
d. Entities which are exempt from income tax are also exempt from VAT

______7. Which of the following is subject to vat?

a. Sale of smoked fish c. Sale of shells and coral products by a dealer
b. Sale of lechon d. Sale of newspaper
______8. The value-added tax due on the sale of taxable goods, property and services by any person whether or not he has
taken the necessary steps to be registered
a. Input tax c. Excise tax
b. Output tax d. Sales tax

______9. One of the following is not a transaction deemed sale

a. Transfer, use or consumption not in the ordinary course of business of goods or properties originally
intended for sale or for use in the course of business
b. Distribution or transfer to shareholders or investors of goods or properties as share in the profits of a
vat-registered person or to creditors in payment of debt
c. Retirement from or cessation of business, with respect to inventories of taxable goods on hand as of the
date of such retirement or cessation
d. Consignment of goods if actual sale is made within 60 days following the date such goods were consigned

_____10. One of the following is not correct?

a. Sale in retail of goods by a dealer c. Sublease of real property in the course of business
b. Sale of bamboo poles by a dealer d. Importation of ordinary feeds for poultry chicken

_____11. ABC Restaurant recorded the following sales during the month (based on menu prices)
To regular customers 560,000
To senior citizens 224,000
To persons with disability 112,000
The Output VAT is
a. 60,000 b. 72,000 c. 69,600 d. 79,200

Items 12 – 24 (3 pts each)

The taxpayer is a VAT registered real estate dealer:
Selling Price (net of vat) 6,000,000
Zonal Value 6,300,000
FMV, in the assessment rolls 5,800,000
Payments made by the buyer
March 15, 2016 750,000
October 15, 2016 750,000
March 15, 2017 2,250,000
October 15, 2017 2,250,000
______12. The output tax on March 15, 2016 collection is
a. 90,000 b. 756,000 c. 283,500 d. 94,500

______13. The output tax on March 15, 2017 collection is

a. 94,500 b. 270,000 c. 756,000 d. 283,500

Using the preceding number, but the FMV in the assessment rolls is 6,500,000
______14. The output tax on October 15, 2016 collection is
a. 780,000 b. 90,000 c. 97,500 d. 270,000

______15. The output tax on October 15, 2017 collection is

a. 780,000 b. 135,000 c. 270,000 d. 292,500