BUSTAX 17.

The importation of goods for personal use is not

1. The business can be taxed with Value-added tax and
percentage tax at the same time. FALSE
2. Which of the following Business taxes is NOT
enumerated in the National Internal Revenue Code
(NIRC)? ESTATE TAX
3. Value-added tax is imposed on imported goods to be
used in business operations but not imported goods
for personal use. FALSE
4. Distributors and retailers of wines, cigars, and
cigarettes are subject to excise tax. FALSE
5. A non-profit organization means an organization that
does not earn income or profit. FALSE
6. Generally, overseas communication-whether related
to business operation or not-is subject to business
tax. TRUE
subject to business tax; however goods imported for
business use are subject to business tax. TRUE
18. It is important to determine if an activity is a
business economic activity or not because a business
activity is subject to business tax. TRUE
19. In general, business tax is imposed on an economic
activity that is regularly carried out. A business
activity of an individual with a gross annual sale of
less than P100,000 is, therefore, subject to business
tax. FALSE
20. Percentage tax is imposed on services rendered.
TRUE
21. An activity classified as a business activity is
economic or commercial in nature, directed for
profit, and regularly and legally undertake. TRUE
22. Which of the following types of business entities is
NOT engaged in service? SCHOOL SUPPLIES

7. Which of the following is NOT considered as
percentage tax? TAX ON MANUFACTURER OF WINES
8. Percentage tax includes franchise tax, amusement
tax, tax on winnings, and tax on importation of non-
essentials goods. FALSE
9. Business taxes are imposed on the gratuitous
transfer of goods or services. FALSE
10. The business taxes enumerated in the NIRC of the
Philippines are as follows: excise tax, value-added
tax, percentage tax and income tax. FALSE
23. A non-resident alien with a single economic activity
in the Philippines is not considered engaged in
business. FALSE
24. Which of the following is NOT a basic requisite for an
activity to be considered as a business activity? IS AN
ISOLATED ACTIVITY
25. Aivan is not a dealer of securities. He sold his shares
of stock through Philippines stock exchange. Thus his
sale is not subject to business tax. FALSE

11. The primary motive of business is profit. TRUE

12. Which of the following is NOT a general classification

of business entities according to nature? FARMING

13. In the manufacturing business, there is a conversion

or processing of goods from raw materials to
finished products. TRUE

14. The principle of continuity implies that a business

activity should be carried out in a progressing
fashion. TRUE

15. Business entities are classified according to nature as

follows: manufacturing, banking, merchandising, and
service. FALSE

16. The importation of kitchen utensils for business and

personal use is subject to excise tax. TRUE
AIS
1. Information Technology (IT) audits can be performed
by both internal and external auditors. TRUE
2. The database administrator is responsible for the
security and integrity of the databaseM. TRUE
3. Automatic Teller Machines (ATMs) are good
examples of online Transaction   Processing Systems.
TRUE
4. Information lacking reliability may still have value.
FALSE
5. Which function manages the financial resources of
the firm through portfolio management, banking,
credit evaluation, and cash receipts and
disbursements? FINANCE
6. One of the greatest disadvantages of database
systems is that all data is always available to all
users. FALSE
7. Accountants play many roles relating to the
accounting information system, including all of the
following except. SYSTEM CONVERTERS
8. Most of the inputs to the General Ledger System
come from the Financial Reporting System. FALSE
9. An appraisal function housed within the organization
that performs a wide range of services for
management is. INTERNAL AUDITING
10. Which of the following is not a production support
activity? MARKETING
11. Transaction Processing Systems are used to record
business meetings.  FALSE
12. The term “accounting independence” refers to
SEPARATION OF DUTIES, SUCH AS RECORD KEEPING
AND CUSTODY OF PHYSICAL RESOURCES
13. What factor conceptually distinguishes external
auditing and internal auditing? CONSTITUENCIES
14. Data processing does not involve SYSTEM
MAINTENANCE
15. All of the following are external end users except
COST ACCOUNTANTS
16. Transaction Processing System KEEPS TRACK OF
DAILY TRANSACTION IN A DATABASE
17. Transaction processing systems convert non-
financial transactions into financial transactions.
FALSE
18. In the distributed data processing approach
COMPUTER SERVICES ARE ORGANIZED INTO SMALL
INFORMATION PROCESSING UNITS UNDER THE
CONTROL OF END USERS
19. Retrieval is the task of permanently removing
obsolete or redundant records from the database.
FALSE
20. Under SOX legislation public accounting firms are no
longer allowed to provide consulting services to their
clients. FALSE
21. Which individual is least involved in new systems
development? DATA LIBRARIAN
22. Useful information must possess all of the following
characteristics except PRECISION
23. ______________ a collection of hardware, software,
data, people, and procedures that work together to
produce quality information. INFORMATION SYSTEM
24. The author distinguishes between the Accounting
Information System and the management
Information System based on WHETHER THE
TRANSACTIONS ARE FINANCIAL OR NON-FINANCIAL
25. Which activity is not part of the finance function?
GENERAL LEDGER
26. The Management Reporting System provides the
internal financial information needed to manage a
business. TRUE
27. Systems development represents 80 to 90 percent of
the total cost of a computer system. FALSE
28. The objectives of an information system include each
of the following except FURTHERING THE FINANCIAL
INTERESTS OF SHAREHOLDERS
29. Attestation services are performed by EXTERNAL
AUDITORS
30. ________________is used to help managers make
right decision in important areas of  
business. DECISION SUPPORT SYSTEM