Name: ___________________________________________ Section: _____________________

FINAL EXAMINATION

True/False
Indicate whether the statement is true or false.
____ 1. On transactions in the course of trade or business, non-stock, non-profit private organizations are not
exempt from VAT.

____ 2. A person may be subject to business tax even if he is not engage in business.

____ 3. In a manufacture of products, it is possible that value-added tax and percentage tax are simultaneously
imposed.

____ 4. VAT, being an indirect tax can be shifted or passed on to buyer, transferee or lessee of the goods, property
or services.

____ 5. Any business or business pursued by an individual where the aggregate gross sale or receipts do not exceed
P100,000 during any 12-month period shall be considered principally for subsistence or livelihood and not in
the course of business.

____ 6. Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or property,
renders services, and any person who imports goods shall be subject to value-added tax.

____ 7. Value-added tax is a privilege tax.

____ 8. Government corporations are not exempt from VAT.

____ 9. Value-added and percentage taxes cannot be imposed at the same time.

____ 10. The term “engage” connotes a single act or isolated transactions.

____ 11. The VAT applies, in general, to all persons who sell, barter, exchange or lease goods or properties, or
render services in the course of trade or business2 whose annual gross sales or receipts exceed P1.5 million

____ 12. Included in the deemed sale transaction is a transfer, use, or consumption not in the course of business of
goods or properties originally intended for sale or for use in the course of business.

____ 13. Distribution or transfer to shareholders or investors as share in the profits of the persons not registered
under VAT system, or to creditors in payment of debt is a deemed sale transaction.

____ 14. Consignment of goods if actual sale is not made within 50 days following the date such goods were
consigned will be considered sold for determination of VAT payable.

____ 15. Without the deemed sale provision, disposal of merchandise for sale will be considered VAT-Exempt
transaction.

____ 16. Generally, husband and wife shall be treated separately in computing the threshold, but if they opted to
register as one tax payer, for VAT filing purposes, their individual receipts shall be combined.

____ 17. VAT exempt sale may not be included in the computation of the threshold amount.
Matching
 a. Wearing apparels n. Tax Credit Method
b. Aggregation Rule o. Vacuum Packing
c. Orginal state / raw p. January 1, 1988
d. Livestock q. Bagasse
e. Specialty Feeds r. Barter, lease, Sale, Exchage
f. Poultry s. Importation
g. Poultry feeds t. Importer
h. Cross-border principle u. February 1, 2006
i. Professional Implement and instrument v. VAT system
j. Agricultural grower w. Fair Market Value at the time of
transaction
k. Non-Resident x. Seller
l. In-patient y. Landed cost
m. Governmental Function z. Crustacean
____ 1. Residue from sugar milling process used in making paper
____ 2. Used by entity in the practice of his career
____ 3. Feeds for animals generally considered pets
____ 4. Preservation of food product exempted from VAT
____ 5. Effectivity of 12% VAT rate
____ 6. No VAT shall form part of the cost of goods destined for consumption outside of the territorial border of
the taxing authority
____ 7. Method of collecting VAT due
____ 8. Unprocessed food products for human consumption
____ 9. An entity producing for others food products in their original state
____ 10. All feathered animals
____ 11. Person statutorily liable to VAT
____ 12. Personal belonging of a person returning to Philippines
____ 13. Effectivity date of VAT in the Philippines
____ 14. VAT exempt sale of medicines by hospitals to as part of its medical / hospital services
____ 15. Transaction subject to VAT
____ 16. Person deemed to be making business in the Philippines
____ 17. Shall apply if the individual tax payer derive income from other sources for the purpose of the threshold
benchmarking
____ 18. Tax base for the computation of imported good
____ 19. Restaurant inspection, animal control, health and safety permits and licenses, sanitation, vital statistics,
and the like
____ 20. Seafoods

Completion
Complete each statement.

1. When is the effectivity of VAT in the Philippines?

2. In the Philippines, VAT is collected through method.

3. VAT is a tax on consumption, levied on every transaction in the course of trade of business like:
a.)
b.)
c.)
d.)

4. is the person statutorily liable to payment of VAT though it could be passed on to

the .

5. Today, VAT rate is % which was effective last February 1, .

6. GIve the tax base of the following person:

a.) Seller of Goods/Properties
b.) Seller of Services
c.) Importer of Goods

7. person, who performed services in the Philippines are DEEMED to be making sales
in the course of trade or business although the performance of such services is not regular.

8. How much is the threshold for a person to be subject to VAT?

9. When does a person could be Vatable even if his gross annual receipt or sales does not exceed the
threshold amount?

ANSWER: If the person is registered under System

10. rule shall apply if the individual tax payer derive income from other sources.
Example: An individual practicing his profession and a merchandiser at the same time.

11. Generally, government is not subject to tax.

True / False

12. It is a government function that includes services that only the government does, such as restaurant
inspection, animal control, health and safety permits and licenses, sanitation, vital statistics, and related
functions. G

13. Complete the acronym.

V A T

14. The principle that suggests, “no VAT shall form part of the cost of goods destined for
consumption outside of the territorial border of the taxing authority”.

15. refers to all feathered animals.

 16. Sale or importation of agricultural and marine food products in their state, including livestock
and poultry of a kind generally used as, or yielding or producing foods for human consumptionis VAT
exempt transaction.

17. Sale or importation of poultry feeds are exempted from VAT,except feeds which is intended to feed
race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets.

18. Importation of professional instruments and implements, wearing apparels and personal household effects
belonging to persons coming to settle in the Philippines, for their own use, accompanying such person, or
arriving within days before or after their arrival.

19. persons producing for others poultry, livestock and agricultural and marine
food products in their original state.

20. Medical, dental, hospital and veterinary services are exempted from VAT, except those rendered by
professionals. Sales of medicines by hospitals to are exempt from VAT as part of its medical
/ hospital services.

21. Sale of real property for low-cost and socialized housing is VAT exempt if residential lot valued at
or below.

22. VAT registration threshold is .

23. Give examples of simple processing to preserve food for human consumtion.

Short Answer

1. What is the purpose of the deemed sale provision of VAT system.

2. Transfer of goods or properties not in the course of business can take place when VAT registered person
withdraws goods from his business for his personal use. What will be the basis for computation of output
VAT?

3. In the retirement from or cessation of business, with respect to all goods on hand (as of the date of
retirement or cessation) whether or not the business is continued by the new owner or successor shall be
considered sold. What will be the basis for the computation of VAT?

4. Compare and contrast zero-rate sale from VAT exempt sale.

5. Are review schools and training institutes are not accredited by governmen are subject to VAT? Explain.

Problem
1. A VAT-registered trader made the following sales of goods during the fourth quarter of 2012;
Cash Sales 250,000
Open Account Sales 125,000
Installment Sales 100,000
Transfer for Personal Use of Goods for Sale 25,000

How much is the output tax for the quarter?

2. Alicia Villarama Feeds based in Pasig City trades Specialty trades for race horses, fighting cocks, aquarium
fish, zoo animals and other animals generally considered as pets. On May 13, 2015, Alicia Villarama
Feeds purchased on account specialty feeds with a total amount of payable of P784,000. A
wholesaler operating in the region bought for cash all of the available feeds on May 25, 2015;
amount of cash received was P1,120,000. Alicia Villarama Feeds paid the value-added tax due by
month-end not minding the actual deadline.

REQUIRED: Prepare the entries related to value-added tax.

3. APL Corporation sold a parcel of land to DDP Company on October 1, 2012 for P1,000,000, plus the output
VAT , with a down payment of P100,000 VAT not included, and 36 equal monthly instalment payments of
P25,000 plus the output VAT. First instalment is due on month-end. The zonal value of the subject property
at the time of sale amounted to P1,500,000. How much is the output tax on the October 1, 2012 payment?