Department of Accounting, Law and Taxation

University of the East-Caloocan

Finals- Quiz 2
Name: ____________________________________
___________________________

Subject

and

Section:

Professor:_______________________________
Date:_______________________________________________
Multiple Choice
Identify and encircle the choice that best completes the statement or answers the question.
Theories (1 point):
1. First Statement: Other percentage taxes are indirect taxes that can be passed on by
person required to pay another person who shall be bear the burden of the tax.
Second statement: 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. Both statements are correct.
b. Both statements are incorrect.
c. Only the first statement is correct.
d. Only the second statement is correct.
2. A seller of goods is not VAT-registered. His annual gross sales amount to P1,919,500
(VAT threshold amount). To what business tax is he liable?
a. 3% tax on VAT-exempt persons
b. 12% value-added tax
c. 3% common carriers tax
d. Not subject to any percentage tax
3. Which of the following is not subject to the 3% common carriers tax?
a. Cars for rent or hire driven by the lessee
b. Transportation contractors, including persons who transport passengers for hire
c. Owners of animal-drawn two-wheeled vehicle
d. Domestic carriers by land for the transport of passengers
4. Which of the following is subject to the 3% common carriers tax?
a. Owners of banca
b. Domestic carriers by land for the transport of goods or cargoes
c. Domestic carriers by air for the transport of passengers
d. Keepers of garage
5. First statement: The gross receipts of common carriers derived from their incoming and
outgoing freight shall be subject to the local taxes imposed under the Local Government
Code.
Second statement: The 3% common carriers tax is based on the actual quarterly gross
receipts or minimum quarterly receipts whichever is lower.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
6. International carriers doing business in the Philippines is subject to:
a. 3% percentage tax of their quarterly gross receipts

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b. 3% percentage tax on their actual gross receipts or minimum gross receipts

whichever is higher
c. 12% value-added tax on their gross receipts
d. 0% percent value-added tax on their gross receipts
7. Which of the following franchise grantees is subject to the 2% percentage tax on
franchise?
a. Franchise on radio and/or television broadcasting companies the gross annual receipts
in the preceding year do not exceed P10,000,000
b. Franchise on gas and water utilities
c. Franchise on toll road operations
d. PAGCOR and its licensees and franchisees
8. First statement: Radio and television broadcasting companies whose annual gross
receipts of the preceding year do not exceed P10,000,000 shall have the option to be
registered as a value-added taxpayer and pay the tax due thereon.
Second statement: Once radio and television broadcasting companies qualified to
optionally register exercise the option, said option shall be revocable within three (3)
years from date of registration.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
9. How much tax shall be collected upon every overseas dispatch, message or conversation
transmitted from the Philippines by telephone, telegraph, telewriter exchange, wireless
and other communication equipment service?
a. 3% on gross receipts
b. 5% on gross receipts
c. 10% on the amount paid for the services
d. 12% on the amount paid for the services
10. The tax on banks and non-bank financial intermediaries performing quasi-banking
functions on interest, commissions and discounts from lending activities as well as
income from financial leasing on instruments from which such receipts are derived with a
remaining maturity of 5 years or less is:
a. 7% on gross receipts
c. 1% on gross receipts
b. 5% on gross receipts
d. 0%on gross receipts
11. First statement: The tax on life insurance premium applies to every person, company or
corporation doing life insurance business of any sort in the Philippines, except purely
cooperative companies and associations.
Second statement: A person engaged in non-life insurance business is subject to valueadded tax.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
12. Which of the following shall not be included in the tax base of tax on life insurance
premiums?
a. Premiums refunded within six (6) months after payment on account of rejection of risk
or returned for other reason to a person injured.
b. Reinsurance by a company that has already paid the tax.
c. Premiums collected or received by any branch of a domestic corporation, firm or
association doing business outside the Philippines on account of any life insurance of
the insured who is a non-resident, if any tax on such premium is imposed by the
foreign country where the branch is established.
d. All of the choices.

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13. First statement: All boxing exhibitions held in the Philippines shall be subject to
amusement tax.
Second statement: Admission charges to amusement places are required for the
imposition of amusement tax.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
14. One of the following is correct amusement tax rate.
a. 30% on jai-alai and racetracks
b. 18% on boxing exhibitions
c. 15% on cockpits, cabarets, night and day clubs
d. 10% on professional basketball games
15. Which of the following is not subject to the 10% tax on winnings?
a. Winnings on horse races
b. Prize received by an owner of winning race horses
c. Winnings from double, forecast/quinella and trifecta bets
d. None of the choices
Problems (2 points):
Show your solution on separate sheet of paper.
16. Mr. Jaime Rodriguez is the owner of a small variety store. His gross sales in any one year
do not exceed the VAT threshold amount. He is not VAT-registered. The following data are
taken from the books of the variety store for the month ending November 30, 2011:
Merchandise inventory, October 31, 2011
P10,000
Gross sales
45,000
Purchases from VAT-registered suppliers
35,000
How much is the percentage tax due and payable?
a. P1,650
c. P300
b. 1,350
d. None
(17-18) Ube Paspas Bus is a common carrier by land. During a particular month, it has the
following gross receipts:
Transport of passengers
P1,000,000
Transport of goods
1,500,000
Transport of cargoes
500,000
17. How much is the common carriers tax payable?
a. P120,000
c. P60,000
b. 90,000
d. 30,000
18. How much is the Value-Added Tax?
a. P360,000
c. P120,000
b. 240,000
d. 30,000
(19-20). J. Santos promoted a world boxing championship in Manila featuring Manny Hakot, a
Filipino champion. Gate receipts amounted to P3,000,000 and additional receipts from
television coverage was P2,000,000.
19. How much was the amusement tax due?
a. P750,000
c. P300,000
b. 500,000
d. None
20. Assuming the boxing exhibition was for a Philippine national championship, how much
was the amusement tax?
a. P750,000
c. P300,000
b. 500,000
d. None

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