College of Business and Accountancy

Second Semester 2023-2024

INTEGRATED ACCOUNTING THEORIES AND PRACTICE

TAXATIONS
Integrate Quiz
May 03, 2024

VAT
1. In value-added taxation, this is not a requirement for taxability of service.
a. Performed within or outside the Philippines.
b. In the course of business.
c. Consideration received actually or constructively.
d. Supply of service is not exempt from VAT.

2. The following are the data of spouses F and A during the year:

Gross receipts F A
From business:
Restaurant 1,350,000
Small Department Store 1,220,000
Practice of profession as CPA 254,300

Which of the following statement is correct?

a. For purposes of the threshold of P3M the gross receipts of F and A shall be combined.
b. A shall be subject to VAT even if she does not register voluntarily under the VAT system.
c. For purposes of the threshold of P3M, the aggregation rule for each taxpayer shall apply. Thus, the
gross receipts from the restaurant shall be added to the receipts from the practice of profession.
d. For purposes of the threshold of P3M, the restaurant and the practice of profession are considered as
separate taxpayers.

3. Which statement is correct? A bar review center owned and operated by lawyers is:
a. Exempt from VAT, provided that its annual gross receipts do not exceed P3M.
b. Exempt from VAT, regardless of its gross receipts during the year because it is an educational
center.
c. Subject to VAT, regardless of its gross receipts during the year.
d. Subject to VAT, if it is duly accredited by TESDA.

4. Which of the following is not exempt from VAT?

a. Importation in their original state of agricultural and marine food products.
b. Importation of non-food agricultural products in their original state by a primary producer.
c. Not VAT-registered radio station with annual gross receipts of not exceeding P10M.
d. Importation of personal and household effect belonging to residents of the Philippines returning
from abroad.

5. Statement 1: A sale of timber to a lumberyard by an owner of a timberland is not subject to VAT.

Statement 2: A sale of a goldfish by a petshop and a sale of fresh tilapia in the market are both exempt.
a. Both statements are true.
b. Both statements are false.
c. Only statement 1 is true.
d. Only statement 2 is true.
6. Exemptions from VAT is limited to the following, except:
a. Raw agricultural food
b. Health
c. Education
d. Agricultural non-food

7. Upon satisfaction of certain conditions, the following are subject to 12% VAT instead of 0%, except:
a. The sale of goods, supplies, equipment and fuel to persons engaged in international shipping or
international air transport operations and that the goods, supplies, equipment and fuel shall be used
exclusively for international shipping or air transport operations.
b. Transactions considered export sales under EO No. 226, otherwise known as the Omnibus
Investments Code of 1987, and other special laws.
c. The sale of raw materials or packaging materials to an export-oriented enterprise whose export
sales exceed seventy percent of total annual production.
d. The sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident
local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in
the Philippines of the said buyer’s goods, paid for in acceptable foreign currency, and accounted
for in accordance with the rules and regulations of the BSP.

1-6 | P a g e
 8. The VAT exemption shall only apply to sale of real properties not primarily held for sale to customers or
held for lease in the ordinary course of trade or business, sale of real property utilized for socialized
housing, sale of house and lot , and other residential dwellings with selling price of not more than
a. 3,199,200
b. 2,500,000
c. 1,500,000
d. 2,000,000

9. Sale or importation of drugs and medicines prescribed for diabetes, high cholesterol, and hypertension are
exempt from VAT beginning
a. January 1, 2018
b. January 1, 2019
c. January 1, 2020
d. July 1, 2018

10. Statement 1: In VAT the seller-businessman does shoulder the burden of the tax because he is the one
statutorily liable to pay.
Statement 2: VAT payable always refers to the excess of output tax over the input tax.
a. Both statements are true.
b. Both statements are false.
c. Only statement 1 is true
d. Only statement 2 is true..

11. Kuya J, a non-VAT taxpayer, purchased merchandise worth P11,200, VAT inclusive from Kuya Wil, a VAT
registered seller. The passed-on VAT of P1200 on the purchase is
a. Part of the cost of purchases
b. An expense
c. A tax credit
d. Ignored

12. Anjie sold goods at a total price of P123,200 to Benjie on account. Benjie sold the same goods to Coji for
P143,000 (exclusive of VAT) cash. All of them are VAT registered taxpayers. The accounting entry to
record the sales in the book of Benjie is-
a. Cash P160,160
Sales 160,160
b. Cash 143,000
Sales 143,000
c. Cash 143,000
Sales 125,840
Output tax 17,160
d. Cash 160,160
Sales 143,000
Output tax 17,160

13. Input tax is available to a VAT-registered buyer provided that:

a. The seller is a VAT-registered person.
b. The seller issues a VAT invoice or official receipt, which separately indicates the VAT component.
c. The goods or service is subject to or exempt from VAT, but the sale is covered by a VAT invoice or
receipt issued by VAT-registered person.
d. The name and TIN of the buyer is not stated or shown in the VAT invoice or receipt.

14. For 2019, input tax is not available as a credit against the output tax of the buyer of taxable goods or
services during the quarter, if:
a. The VAT invoice or receipt of the seller is registered with the BIR.
b. The VAT invoice or receipt is issued in the name of the VAT-registered buyer and his TIN is shown
in said invoice receipt.
c. The VAT invoice or receipt of the seller does not separately indicate the gross selling price or
gross receipts and the VAT component therein.
d. The VAT invoice or receipts issued by the seller shows the TIN plus the word “VAT” or “VAT
registered person.

15. Which of the following documents can be validly used in claiming input tax credit?
a. Official receipt
b. Delivery receipt
c. Acknowledgment receipt
d. Sales invoice issued by a non-VAT seller.

For items 16 - 18:

Mongolia Company, a VAT registered business had the following data in its books in the second quarter of 2023:

2-6 | P a g e
Domestic sales (not on consigned goods) P 709,500
Sales returs 26,400
Goods shipped on consignment (net of tax):
Units Unit Price
June 5 25 P 22,000
May 5 20 22,000
April 5 12 22,000
Gods withdrawn for use by the company.
Goods taken as payment to creditor.
Freight and insurance of goods.
Purchases:
Raw materials 484,000
Supplies 61,600
Capital Goods 60,000
Salaries of employees 235,000
During the quarter, one consignee remitted cash net of 20% commission, representing the paymnt for five (5 units)
delivered on May 5.
Another consignee remitted cash of P 220,000, gross of 20% commission, representing payment for 10 units sold in
June. Other than the commission. Mongolia company gave 5% discount/rebate to the consignee for selling ten (10)
units in a three-month period.

16. The output tax on the 2nd quarter is-

a. P 124,450 c. P 121,050
b. P 161,106 d. 134,255

17. The input tax is –

a. P 73,293 c. P 65,440
b. 61,078 d. None of the above

18. The amount of VAT payable is-

a. P69,350.00 c. P 66,525.00
b. 87,813.00 d. 78,404.46

19. Isaac Company, a newly VAT registered business, had the following data during the 1st quarter (all amounts
are inclusive of tax):
Merchandise inventory P 204,000
Actual VAT paid on the inventory 16.000
Sales, total invoice amount 469,000
Purchases 57,400
Fifty percent (50%) of the merchandise inventory on January 1 were purchased from non-VAT registered
sellers.
The VAT payable by Isaac Company is
a. P 28,100 c. P 3,960
b. 30,100 d. 4,950

20. Ben Door supplier in Manila, sold merchandise on May 5, 2019 for P 100,000 (exclusive of VAT) to Bay
Yerr, a storeowner in Cebu. The terms are: 2/10, n/30; FOB shipping point, freight prepaid. Cost of freight
per waybill is P 1,120. Payment was made by Bay on May 12,2019 after a return of defective merchandise
worth P 5,600, tax inclusive.
Based on the above transaction, how much is the balance of Ouput tax to Ben Door?
a. P 12,840 c. 11,280
b. 11,400 d. P 11,172

21. Based on the above transactions, the balance of the Input Tax on Bay Yerr is-
a. P 12,840 c. P 11,280
b. 11,292 d. 11,172
22. Beth had the following receipts during the month (exclusive of tax):
Passenger Cargo
Bus (10 units), per unit P 15,000
Sea vessel 1,500,000 P 800,000
Sea vessel 2, 1,500,000 P 800,000
Cessna plane for hire 800,000 560,000
The output tax during the period is-
a. P 164,220 c. 440,220
b. 441,000 d. P 439,200

23. In 2022, Dimagiba Construction Company entered into a contract with the government to construct an
edifice for a total contract price of P 25,000,000. During the month, the government voucher indicates that
it will pay P 5,600,000 (inclusive of VAT) to the company. Disregrading other taxes, how much creditable
withholding VAT is to be withheld by the government on the payment?
a. P 150,000 c. 1,000,000

3-6 | P a g e
 b. 850,000 d. P 0

24. Statement 1: There is a VAT on importation by an importer-merchant even if he does not intend to sell the
imported article.
Statement 2: A person who is exempt from VAT may register under the VAT system.
a. Statement 1 is false; Statement 2 is false.
b. Statement 1 is false; Statement 2 is true.
c. Statement 1 is true; Statement 2 is true.
d. Statement 1 is true; Statement 2 is false.

25. 1st Statement: Unless exempt, VAT is imposed on goods brought into the Philippines, whether for use in
business or not.
2nd Statement: In the case of goods imported into the Philippines by a VAT exempt person which are
subsequently sold to taxable persons, the latter shall be considered the importer thereof and shall be liable
for VAT due on such importation.
a. Statement 1 is false; Statement 2 is false.
b. Statement 1 is true; Statement 2 is true.
c. Statement 1 is false; Statement 2 is true.
d. Statement 1 is true; Statement 2 is false.

26. Robin P. imported a car from the U.S.A for his personal use. Total landed cost is P 250,000 (about US
$5,000) including customs duties of P 50,000. VAT payable is:
a. P 30,000 c. 10,000
b. 25,000 d. None, because importation is for personal use.

27. Bata, a VAT registered person had the following data:

Price actually paid for the goods boughjt from Japan P 600,000
Related insurance premiums and freight from Japan
Customs duty amount to 40% of dutiable value
Other import charges and expenses amount to 10% of customs duties
The VAT on importation is-
a. P 82,560 c. P 135,360
b. 145,920 d. 157,920

28. The following are the date of City Appliances Marketing Company for October, 2019:
Sales up to October 15, total invoice value P 266,000
Purchases up to October 15, net of input taxes 215,000
Additional Information:
On October 16, 2015, the City Appliances Marketing Co. retired from its business and the
inventory valued at P 190,000, net of input taxes, was taken and transferred to New City Appliances
Company. There is a deferred input taxes from the third quarter of P 3,500. How much is the total value
added taxes due and payable by City Appliances Marketing Company in its operations in October and its
retirement from business?
a. P 22,500 c. P 6,350
b. 22,000 d. 25,350

29. Taxpayers who became VAT registered persons upon exceeding the minimum turn-over of P 3,000,000
shall be entitled to a transitional input tax on the inventory on hand as of the effectivity of their VAT
registration on the following, except:
a. Supplies for use in the course of taxpayer’s trade or business.
b. Goods which have been manufactured by the taxpayer.
c. Goods in process for sale.
d. Capital goods being used in the operation of the business.
30. An importer wishes to withdraw its importation from the Bureu of Customs. The imported goods were
subjected to a 10% customs duty in the amount of P 12,500 and to other charges in the amount of P 9,500.
The value added tax due is
a. P 12,500 c. P 13,364
b. 17,640 d. 14,700

31. In which of the following cases may refund of input tax be allowed?
1st case: For input tax on purchases of capital goods.
2nd case: For input tax on purchases of goods and services by an exporter.
a. In both cases. c. Neither in the 1st nor in 2nd case
st
b. Only in the 1 case. d. Only in the 2nd case

32. Mr. Tria rents his 13 residential units for P 15,300 per month. During taxable year 2024, his accumulated
gross receipts amounted to P 3,840,000.
He is subject to –
3% 3%
VAT percentage tax VAT percentage tax
a. Yes Yes c. No Yes
b. Yes No d. No No

4-6 | P a g e
For items 33 to 34:
Goodbooks Educational Supply, VAT registered, is engaged in the business of selling books, school supplies and gift
items. The following are the record of its purchases and sales in a quarter (inclusive of tax):
Sale of school supplies P 560,000
Sale of gift items 336,000
Purchases of school supplies and gift items 406,000
Purchase of computer for use in business 21,112
33. The creditable input tax on the purchase of computer is –
a. P 2,400,000 c. P 26,400.65
b. 1,920.50 d. 2,262.00

34. The VAT payable is –

a. P 50,238 c. P 52,500
b. 34,100.50 d. 58,800

35. Tala Company had the following data for the 1st quarter of the current year (VAT exclusive):
Taxable sales P 600,000
Exempted sales 300,000
Zero-rated sales 100,000
Input tax which cannot be directly attributed
to any of the above sales 50,000

The VAT payable for the quarter if the input tax attributable to zero rated sales is claimed as tax credit-
a. P 42,000 c. P 32,000
b. 37,000 d. 22,000

36. Combined Company operates a VAT business and a non-VAT business. During the quarter, its books
revealed the following record of sales and purchases:
Sales (VAT business) P 6,000,000
Sales (non-VAT business) 2,000,000
Purchases (VAT business) 4,015,000
Purchases (non-VAT business) 800,000
Purchases (for use in VAT and Non-VAT businesses) 640,000
The value-added tax payable by Combined Company is-
a. P 76,600 c. P 135,000
b. 60,600 d. 180,600

Numbers 37-39 are based on the following information:

Mildred Enterprises, a VAT registered trader had the following data during the last quarter of the year:

Purchases Sales
October P 627,200 P 392,000
November 599,200 862,400
December 959,000 789,600
All of the amounts indicated above are exclusive of VAT.
37. The amount of output tax on Mildred for the quarter is-
a. P 219,000 c. P 262,248
b. 245,280 d. None

38. The amount of input tax for the quarter is-

a. P 203,500 c. P 262,248
b. 28,200 d. None

39. The VAT payable/excess tax for the last quarter is –

a. P (16,968) c. P 60,900
b. 16,968 d. None

40. Felicism had the following data in 2020:

Case 1 Case 2
Sales, net of VAT P 1,900,000 P 1,800,000
Purchases of goods for sale, exclusive of VAT 1,260,000 1,600,000
Purchases of machines (VAT not included) 1,440,000 900,000
Machine life 6 years 3 years

The amount of VAT payable/excess tax area as follows:

(A) (B) (C) (D)
Case 1 P 54,000 P 73,920P 73,920None
Case 2 (84,000) (84,000) 20,000None

Items 41 to 43:

5-6 | P a g e
 41. The books of Online Manufacturing Company had the following record of purchases in the 2nd quarter of
2020:
Capital goods Useful Life Month Purchased Cost
Machine 1 20 yrs April P 1,200,000
Machine 2 12 yrs May 300,000
Machine 3 25 yrs June 800,000
Machine 4 4.5 yrs June 270,000
The creditable input tax in the month of May is -
a. P 2,400 c. P 300,000
b. 36,000 d. 38,400

42. The creditable input tax in the month of June is

a. P 4,600 c. P 2,200
b. 128,400 d. 5,000

43. The amortization of input VAT on capital goods purchased shall only be allowed if the purchase is made
a. Before December 31,2021
b. On or before December 31,2021.
c. After December 31,2021
d. Effective January 1, 2021.

44. Bombapresyo Company delivered materials to a government agency amounting to P 200,000, net of VAT.
How much would Bombapreso receive from the government agency after the withholding of the VAT but
before other taxes?
a. P 192,920 c. P 211,800
b. 214,000 d. 189,200

45. Which of the following should not appear in the VAT invoice or official receipt?
a. Total amount which the purchaser pays or is obligated to pay.
b. VAT registration number of the seller.
c. A statement that the buyer is a VAT registered person.
d. The amount of VAT shown separately in the invoice of official receipt.

================================nothing follows=================================

6-6 | P a g e