Quiz 1 - Intro to Consumption Taxes

1. The VAT on importation is 

a. 12% of sales
b. 3% of mark-up
c. 12% of mark-up
d. 12% of purchases
2. Who is the statutory taxpayer of business taxes? 
a. The buyer, whether or not engaged in trade or business
b. The seller who must be engaged in trade or business
c. The seller, whether or not engaged in trade or business
d. The buyer who must be engaged in trade or business
3. Excise tax is paid by 
a. Buyers
b. Seller or buyer depending on who agreed to pay the excise tax
c. Importers or manufacturers
d. Sellers
4. Which is correct regarding consumption tax? 
a. It is entirely based upon the consumer’s ability to pay.
b. It may help in the redistribution of wealth to society.
c. It applies to both domestic and foreign consumption.
d. It applies only when the seller is non-resident.
5. Which is subject to the VAT on importation? 
a. Domestic consumption from resident sellers
b. Foreign consumption from resident sellers
c. Foreign consumption from foreign sellers
d. Domestic consumption from foreign sellers
6. Which importation is subject to the VAT on importation? 
a. Neither 1 and 2
b. 1 Importation by a person engaged in business
c. 2 Importation by a person not engaged in business
d. Both 1 and 2
7. Faray Company, a resident business, renders services to Mr. Caldwin, a resident person who is
not engaged in business. Identify the statutory taxpayer and the type of consumption tax. 
a. Faray Company-VAT on importation
b. Faray Company-Business tax
c. Mr. Caldwin-Business tax
d. Mr. Caldwin-VAT on importation
8. Maddy is regularly engaged in the sale of goods. He will pay 
a. VAT only
b. Percentage tax only
c. Either A or B
d. Neither A nor B
9. Which is not subject to excise tax? *
a. Sin products
b. Non-essential commodities
c. Food products
d. Mineral products
10. Which is correct with the VAT on importation? *
a. Payable only when the importer is engaged in business
b. Payable only when the foreign seller is engaged in business
c. Payable regardless of the purpose of the importation
d. Payable only when the resident seller is not engaged in business
11. Who is the statutory taxpayer to the VAT on importation? *
a. Both
b. Foreign seller
c. None of these
d. Domestic buyer
12. The tax on domestic consumption is referred to as *
a. Either VAT on importation or Business Tax
b. VAT on importation
c. Business tax
d. Neither VAT on importation nor Business Tax
13. The deduction from Output VAT is called *
a. Input VAT
b. VAT on importation
c. Percentage tax
d. VAT due and payable
14. The VAT on domestic sales is an example of *
a. a direct tax
b. an indirect tax
c. a regulatory tax
d. a specific tax
15. Which is not a business tax? *
a. Excise tax
b. VAT on importation
c. Percentage tax
d. VAT on sales
16. Which is subject to business tax? *
a. Foreign consumption from resident sellers
b. Domestic consumption from foreign sellers
c. Foreign consumption from foreign sellers
d. Domestic consumption from resident sellers
17. Mr. Ford made a casual sale involving a car to Mrs. Tayaman, a resident buyer. Mr. Ford is not
a car dealer. Who is subject to consumption tax? *
a. Mr. Ford
b. Mrs. Tayaman
c. Both Mr. Ford and Mrs. Tayaman
d. Neither Mr. Ford nor Mrs. Tayaman
18. The percentage tax is generally *
a. 3% of sales or receipts
b. 3% of purchases
c. 12% of mark-up
d. 3% of mark-up
19. Calauag Company, a non-resident business, purchased P200,000 from Balom Company, a
resident business. Which will pay the consumption tax on this transaction? *
a. Calauag Company
b. Both companies
c. Balom Company
d. Neither of the companies
20. Heaven Company, a resident business, purchased P150,000 goods from Wiley Company, a
non-resident business. Identify the statutory taxpayer and the type of consumption tax. *
a. Wiley Company - Business tax
b. Wiley Company -VAT on importation
c. Heaven Company-Business tax
d. Heaven Company- VAT on importation
21. Statement 1: A business which pays VAT normally does not pay percentage tax. Statement 2: A
business which pays percentage tax also pays VAT. Which statement is correct? *
a. Statement 2
b. Statement 1
c. Neither statement
d. Both statements
22. Which type of consumption will pay consumption tax? *
a. Foreign consumption
b. Neither domestic and foreign consumption
c. Domestic consumption
d. Both domestic and foreign consumption
23. Which is an incorrect statement regarding consumption tax? *
a. They effectively tax everyone in the state.
b. Consumption taxes may encourage savings formation.
c. They apply only when the goods or services are destined for consumption within the
Philippines.
d. They are always indirect in nature.
24. Mr. Chadwick, an employee, sold his residential lot to Mr. Cruz, a real property dealer. Who is
subject to consumption tax with respect to this transaction? *
a. Neither Mr. Chadwick nor Cruz
b. Mr. Cruz
c. Mr. Chadwick
d. Both Mr. Chadwick and Cruz
25. The tax on domestic consumption from resident suppliers is *
a. Either VAT on importation or Business Tax
b. VAT on importation
c. Neither VAT on importation nor Business Tax
d. Business tax