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    Processing Business Tax Requirement Final 22

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    tewabe bayih
    tax 2

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    Processing Business Tax Requirement Final 22

    Uploaded by

    tewabe bayih
    16 views6 pages
    tax 2

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    Processing business tax requirement final 22

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    tax 2

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    16 views6 pages

    Processing Business Tax Requirement Final 22

    Uploaded by

    tewabe bayih
    tax 2

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 6

    ADMAS UNIVERSITY

    MESKEL , MISRAK ,MEGENAGNA ADEBABAY ,KALITY,MEKANISSA & MEKELE TVET


    COLLEGES’
    SUMMATIVE ASSESSMENT (50%)
    KNOWLEDGE AND PRACTICAL PACKAGE

    Trainee’s Name:
    ID No.:
    Occupation/Department:
    Section:
    Entry & Level LEVELIV 2013 E.C ENTRY EXTENSION TRAINEES’
     Please put a tick mark GASHAW B
    () besides your trainer’s name:

    Unit Title: Process Business Tax Requirements

    Date of Assessment:
    Time Allowed: 1:30 Hrs.
    GENERAL DIRECTIONS:
    1. MAKE SURE THAT THE ASSESSMENT PAKAGE CONTAINS 06 PAGES
    INCLUDING THE COVER PAGE.
    2. READ THE INSTRUCTIONS CAREFULLY FOR KNOWLEDGE AND PRACTICAL
    PARTS.
    3. USE ONLY BLUE OR BLACK PEN.
    4. TURN OFF YOUR MOBILE PHONE.
    5. ANY ACTION TAKEN BY THE INVIGILATOR DURING EXAM TIME WILL NOT
    BE COMPROMISED.
    6. PUT AWAY ANY MATERIALS THOSE ARE NOT ALLOWED FOR THE
    ASSESSMENT/S.
    N.B: DON’T TURN THIS PAGE UNTIL YOU ARE ALLOWED TO DO SO!!

    1
    UNIT TITLE: PROCESS BUSINESS TAX REQUIREMENTS

    PART ONE: Matching

    Instruction: This assessment /exam contain 5 matching type questions, each worth 2
    points. Match the item in column “A” with the item in column” B” and write the letter
    of the best match with the space provided. Use only capital letters.

    “A” “B”
    1. excise tax A. t a x o n d e m a n d i n e l a s t i c g o o d
    2. withholding tax B. additional tax
    3. None deductible expense C. prepaid tax
    4. sur tax D. cost of goods sold
    5. Deductible expense E. Entertainment expense

    PART TWO: KNOWLEDGE TEST


    Instruction I:
    Choose the best answer from the given alternatives and write the choice of the correct
    letter on space provided. Each questions worth 2 points. Make sure that your answer is
    clearly marked. Use only capital letters.
    1. Business profit tax is
    A. A tax imposed on net profit realized from entrepreneurial activity
    B. A tax imposed on profit of the year declared by business
    C. A tax imposed on income / revenue for the year
    D. All
    2. The tax assessment is by estimation when?
    A. If the taxpayers are not maintain book of record and have reason.
    B. If a taxpayers are maintain book of record and have acceptable by tax authority.
    C. If a taxpayers are maintain book of record and unacceptable by tax
    authority. D.A&C
    3. Which of the following tax payer is required to file Balance Sheet to tax authority?
    A. Category „‟ B‟‟ tax payers B. Category „‟ A‟‟ tax payers
    C. Category „‟ C‟‟ tax payers D. Category „‟ D‟‟ tax payers
    4. ---------------------- is afinancial compensation provide to an employee when they terminate their job ?
    A. Right of way C. severance payment
    B. Rental tax D. All

    5. Which one of the following true about regressive tax rate structure?

    2
    A. Tax rate constant and tax base increase
    B. Tax base increase and gradually income increases
    C. Tax rate decrease and tax base increase
    D. Tax rate increase and tax base increase
    6. Which one the following true about progressive tax rate structure?
    A. Progressive tax rate is tax rate decrease and gradually tax base increase
    B. Tax rate constant and tax base increase
    C. Tax rate increase and gradually income decrease
    D. Tax rate increase and gradually tax base increase
    7. The purchase price of computer with vat is br11,500 what is the withholding tax?
    A. 150 B. 250 C.200 D.exempt

    8. Which of the following individual business income is exempted from tax liability in
    accordance to Ethiopian tax law?
    A. Br. 7,125.00 C. Br. 18,000.00 E. None
    B. Br. 9,250.00 D. Br. 10,900.00

    9. All of the following are true about tax except


    A. Tax is involuntary contribution made by citizens
    B. Tax maximizes inequality in wealth volume of citizens
    C. Tax does not provide direct return in benefit for tax payers
    D. Tax ensures economic stability as fiscal policy tool E. None
    10. All of the following expenses are non-deductible expense as per the Ethiopian tax law except
    A. Donation to political parties
    B. Bad Debt Expense provision not written off
    C. Punitive damages and penalties
    D. General and administrative expense E. None

    11. All of the following are properly matched except


    A. Schedule „B‟ Land use tax
    B. Schedule „C‟ Business profit tax
    C. Schedule „D‟ Royalty income tax
    D. Schedule „A‟ Employment income tax E. None
    12. One of the following is not the reason for penalty of business tax payer?

    A. Late filing or non-filing B. Late payment C. Understatement of tax D.


    None
    13. Which of the following statement is correct?

    A. Schedule D income tax payers are not subject to withholding tax


    B. The law does not require category B tax payers to submit a balance sheet
    C. Category C tax payer declare his annual turnover to the tax authority

    3
    D. All
    E. None
    14. Declaration of income is required for all tax payers except

    A. Schedule B B. Schedule C C. Schedule A


    D. Schedule D
    15. Which of the following tax one is different from the other?
    A. Income tax B. excise tax
    C. custom duty D. sur tax

    PART THREE: PRACTICAL TEST ( 10 Pts.)


    INSTRUCTION: This assessment contain 2 Projects (Choose only one of the two
    projects given and do it); worth 10 points. Read and analyze each question carefully
    so that when you understand, answer the questions correctly.

    1. The financial records of Z merchandizing company show the following data on Nov
    31,2020.

    Net sales 4,400,000


    Cost of goods sold 10,000
    Gain on disposal of asset 20,000
    Depreciation expense 22,000
    Interest expense 14,000
    Penality for violations of tax rules 10,000
    Repair and maintainance expense 32,000
    Utility expense 45,000
    Loss carry forward 62,000
    Severance expense for terminated employees 25,000
    Advertising expense 28,000

    Additional information
    - Depreciation expense for financial report purpose overstated 2 times (2X) than the
    depreciation expense for tax purpose to reduce tax liability

    4
    Required:

    1. Prepare income statement for the year


    2. Calculate profit tax assuming the company is expected to pay 30%

    2, assume that xyz company is engaged in merchandizing of goods and services. The company boughts
    inventory at acost of br 500,000 from ABC co. The seller have not any legal personality.
    Required
    A, what amount of withholding tax that XYZ company withholds from the seller?
    B, prepare the necessary journal entries for the seller and buyers book?

    5
    6

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