ACC321 Business & Transfer Taxes PDF

ACC321: Business and Transfer Taxes Review Material 1st Examination Theory 1. Business Taxes are a. Imposed upon onerous transfers such as sale, barter, exchange or importation. b. Imposed upon gratuitous transfers such as donation inter-vivos and donation mortis causa. c. Imposed upon gratuitous an...

ACC321: Business and Transfer Taxes Review Material 1st Examination Theory 1. Business Taxes are a. Imposed upon onerous transfers such as sale, barter, exchange or importation. b. Imposed upon gratuitous transfers such as donation inter-vivos and donation mortis causa. c. Imposed upon gratuitous and onerous transfers. d. None of the above. 2. Under the tax code, the following are major internal revenue business taxes, except: a. Value-added tax c. Excise tax b. Percentage tax d. Income tax 3. Which is correct? a. Without a business pursued in the Philippines (except importation) by taxpayer, valueadded tax cannot be imposed. b. “In the course of trade or business” means the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a non-stock, nonprofit organization or government entity. c. Services rendered in the Philippines by a nonresident foreign person shall be considered as being rendered in the course of trade or business even if the performance is not regular. d. All of the above. 4. Which statement is false? Transactions considered “in the course of trade or business”, and therefore subject to the business taxes include: a. Regular conduct or pursuit of a commercial or an economic activity by a stock private organization. b. Regular conduct or pursuit of a commercial or an economic activity by a nonstock, nonprofit organization. c. Isolated services in the Philippines by non-resident foreign persons. d. Isolated sale of goods or services for a gross selling price or receipts of P950,000. 5. The provisions of the VAT Law shall apply to persons whose undertakings are intended to be pursued on a going concern basis where the end view is to realize unrestricted amounts of pecuniary gains or profits from those who may avail of the goods they sell or the services they render. Which of the following statements is correct? a. Services rendered in the Philippines by a citizen or resident person shall be considered as being rendered in the course of trade or business even if the performance is not regular. b. Services rendered in the Philippines by a nonresident citizen foreign person shall be considered as being rendered in the course of trade or business even if the performance is not regular. c. Both “a” and ”b” d. Neither “a” or “b” 6. Statement 1: Business taxes are based on gross income. Statement 2: Business tax is in addition to income tax. a. Only statement 1 is correct. c. Both statements are correct. b. Only statement 2 is correct. d. Both statements are incorrect. 7. As to tax rate, value-added tax is an example of a. Graduated tax c. Regressive tax b. Progressive tax d. Proportional tax 8. Which of the following statements is correct? a. The seller of goods/services is the one statutorily liable to pay VAT. b. The “burden of tax” is borne by the final consumers although the producers and suppliers of these goods and services are the ones who have to file their VAT returns to the Bureau of Internal Revenue. Hence, what is transferred or shifted to the consumers is not the “liability to pay the tax” but the tax burden. c. Both “a” and “b” d. Neither “a” and “b” 9. Which is correct? a. All vat-exempt taxpayers shall be subject to other percentage taxes. b. A taxpayer who is subject to percentage tax on his gross receipts will also be subject to income tax on his net income. c. Both “a” and “b” d. Neither “a” or “b” 10. A non-VAT registered taxpayer whose sales for the year exceeded P3,000,000 is a. Exempt from VAT c. Subject to percentage tax b. Subject to 0% VAT d. Subject to 12% VAT 11. Percentage tax I. A business tax. II. A transfer tax. III. Ad valorem tax. IV. Progressive tax. a. I and II only c. I, III and IV only b. I, II and III only d. I, II, III and IV 12. The percentage tax is a. a tax on sale of services. b. imposed on sale of goods. c. imposed together with excise tax. d. All of the above. 13. Statement 1: Other percentage taxes are indirect taxes that can be passed on by person required to pay another person who shall bear the burden of tax. Statement 2: Persons and transactions that are subject to the other percentage taxes are no longer subject to the value-added tax but may be subject to excise tax. a. Only statement 1 is correct. b. Only statement 2 is correct. c. All statements are correct. d. All statements are incorrect. 14. Which of the following is subject to 3% percentage tax under Section 116 of the Tax Code as amended under the TRAIN Law? I. Fruit dealer whose gross receipts for the year amounted to P2,500,000 only. II. An individual taxpayer whose gross sales for the year amounted to P100,000. III. School bus operator whose gross receipts of the year amounted to P3,000,000. a. I and II only c. I, II and III b. I and III only d. None of the above 15. Which statement is wrong? a. The percentage taxes are basically on sales of services. b. The percentage taxes are paid on a monthly or quarterly basis. c. The percentage taxes are not allowed by law to be shifted to the customers or clients. d. An isolated transaction not in the course of business will not result in a liability for a percentage tax. Problem Solving Binay, non-vat registered, has the following data for the year 2018: Sale of fresh fruits 500,000 Sale of fresh vegetables 500,000 Sale of dried fish 500,000 Sale of refined sugar 500,000 Sale of cooking oil 500,000 Only 50% of the above sales were collected. 16. How much percentage tax for the year 2018 should Binay pay? 17. If Binay opted to register to VAT, what is her tax due for 2018? JJ, non-VAT registered taxpayer, operates a convenience store from which the gross receipts from sales and payments on purchases from VAT registered suppliers were as follows (net of VAT): Sales of processed food items 280,000 Sales of non-food items 220,000 Purchases of processed food items 100,000 Purchases of non-food items 80,000 Salaries of helpers 48,000 18. What is the amount of percentage tax due that JJ should pay for the year? In the second quarter of 2018, a non-VAT registered taxpayer engaged in the sale of services and whose annual gross receipts do not exceed the VAT threshold has the following data: Accounts receivable, beg. 50,000 Sales on account 100,000 Accounts receivable, end 75,000 Purchase of supplies, total invoice amount 11,200 19. What is the percentage tax due of the taxpayer? 20. Assume the taxpayer is VAT-registered, what is the VAT due of the taxpayer?