Senier itiens and NT.

Senior Citizgns and PlN D

Statement 1: Whil senior citizen discount
5.
QUIZZER "children's meals" these are
primarily prepare and vat
exemption
the PWD is child, the 20% PW
discount will be
and
intentionally shallfornotchildraply to
consumption.
nt 2:2: The 220% applicable as longmarketed
as it is for
his
nildren,if
Senior Citizens and PWDs Statement discount on purchase of food personal
other consumable items served and
dinks,
who is a resident of the Philippines and who is by establishments includes value beverages, dessert and
refers to any Filipino citizen e
food Counters, tast Tooo, coOKed To0d and
short orders meals and other similar
(60) years old or above. C. benefactor
a. Statements 1&2 are false including take outs
a. persons with disability b. Statement true but statement 2 is false
1 is
b. senior cítizens d. self-employed C. Statement 1 is false but statement 2 is true
Answer: B d. Statements 1 and 2 are true
Statement 1: A resident citizen in the preceding numDer shall reter to a Filipino citizen with
Answer: D
2
permanentlegal residence in the Philippines, and snail include one, who, having miarated
Which of the following statements regarding discounts
to a foreign country, has returned to the Phillppines with a definite intention to reside therein allowed to PWDs is
and whose immigrant visa has been surrendered to the foreign government.
erein, a. In case the seller provides
promotional discounts, the PWD will haveincorrect?
choose either the promotional discount or the the option to
PWD discount.
b. Only the PWD discount is exempted from vat.
Statement A senior citizen referred to in
2 preceding number may apply to senior
the In cases where the PWD is also a senior
C citizen
citizens with dual citizenship status provided they prove their Flipino citizenship and have to SC discount in order to maximize the (SC), the PWD shall also be entitled
at least six (6) months residency in the Philippines. discounts granted under Magna Carta for
PWDs and SCs.
a. Statements 1 &2 are false
d. None of the above.
b. Statement 1 is true but statement 2is false
C. Statement 1 is false but statement 2 is true Answer: C
d. Statements 1 and 2 are true
7. Statement 1: The 5% discounts on electric and water
Answer: D provides vat exemption. consumption of senior citizens also
are those who have long-term physical, Statement 2: The vat exemption granted to Senior Citizens
mental, intellectual or sensory (SCs) and PWDs will not cover
impairments which in interaction with various barriers
may hinder their full and effective other indirect taxes that may be passed on by the seller to a SC/PWD such buyer, as
participation in society on an equal basis with others. percentage tax, excise tax, etc.
a. persons with disability C. benefactor
b. senior citizens Only statement 1 is correct
d. self-employed
Answer: A Only statement 2 is correct
Only statement 3 is incorrect
4. Which of the d. None of the statements is correct
following statements is correct?
a. Double discount to a PWDISC is not Answer: B
b.
allowed.
PWDs/SCs will have the option to choose either
or the PWD discount promotional/other forms of discounts
provided only the PWD discount is exempted from
that the returnable income of a PWD is in the nature of compensation income and he qualifes
C. In case that the PWD is also
a SC, the PWD vat. as a minimum wage earner (MWE), he shall be exempt from income tax. This income tax
discount. may opt to use either the SC or PVv exemption is alan:
d. All of the above a. Tax privilege granted only to PWDs.
Answer: D 0Exemption which will be lostif the PWD loses his status as PWD.
Privilege that will not extend to a PWD wilh dual citizenship status.
General income tax exemption without regard to the status of the taxpayer.
Answer: D income lax.
MWEs, regardless of the status of the taxpayer, are exempt from

750
751
Senur atiens dnd Pl17
Senior
Is unable to make his own rot e Correct amount of MSC's business tax Citizets and PIND
classified as PWD, ,the relurn 13
a. P270,000 should ber
9. Statement 1: If a taxpayer, or representative or by
by the
the
may be made by his duly authonzed agent
or property.
guardian or other b. P960,000 c.P1,080.00
d. nil
care of his person
person charged
with the
representative or guardian shall
Answer: B
(PWD) and his RECEIPTS from
Statement The principal retum and incurring penalties provided for
2: vided for erroneous, Regular customers
the alse
responsibility of making SCs
fraudulent retums. stat P,00.0O00
statement 1 and transter
of responsibility in Total gross receipts subject to vat
ikewise available a seniorin citizen,
3 The toprivilege if he is under some form of disability annt
unable2 isto e4mpt
Statement xVat rate Pe.o00.00
VAT
127%
make his own retum. P960,000
1 is correct of the following statements is
14. Which
statement
a. Only corect?
b. Only statement 2 is corect a. The sales discount granted to a SC or
C. Only statement 3 is
incorrect
necessary expense duly deductible from PWD shall be treated as
oi the selerordinary and
incorrect
is the gross inoome
d.None of the statements the category itemized deductions.
of
Answer: D The sales discount shail not be faling under
acCCOunted as deductible
availing Optional Standard Deduction (OSD)
the expense for taxpayers
4) questions
Usethe following datafor the next four provides C. The sales discount shall only be
allowed as temized deducion
20o dIsCount to Senior citizens. It recorcled th
Mabuhay Services Corporation (MSC) ne for the same taxable year that the discount
is
from gross income
following duning the year: d. All of the above granted.
Customers
Reqular Senior Citizen Total Answer: D; (RR 5-2017)
P8,000,000 P1,000,000 P9,000,000
Receipts
Cost of services 5,000,000 LUsethe following data for the next two (2 questions:
Other deductible expenses 2,000,000 Mabisa Drugs Incorporaton had the folowing during the year.
10. The amount of gross receipts to be reportedis
a. P1,000,000 c. P9,000,000 Customers
d. P9,250,000
Senior Citizen
b. P1,250,000
Reqular Total
Answer: D Gross Sales P8,000,000 P2,000,000 P10,00.000
Cost of Sales 5,000,000 1,000.000 6,000,000
11. The regularand special itemized deductions deductible from gross income of MSCis Other deductible expenses
2.000,000
a. P2,000.000 c.P5,250,000
b. P2,250,000 d. P7,000,000 Mabisa adopts a policy of giving senior citizens 25% discount. As a resuit. it granted P500.000
Answer: B total senior citizens' discount during the year.
15. The amount of gross sales to be reported is
12. The taxable net income of MSC is:
a. P8,000,000 c. P9,600,000
a. P750,000 c.P1,750,000 b. P9,500,000 d.P10,000,000
b. P1,000,000 d. P2,000,000
Answer: D &Answer: D
RECEIPTS:
Regular customers 16. The amount of other deductible expenses to be repored is
SC (PIM/80%)
P8,000,0000
1,250,000 a. P400,000 c.P2,400,000
Tolal gross receipts
Less:
P9,250,000 b. P500,000 d.P2,500,000
Cost of services
Other deductible expense (5,000,000) Answer: D
Section 5.8 ofRR 5-2017 provides:
(P2M + SC discount of OR a "sales discount not exceeding 20%
P250,000) 2,250,000) Only the "actual amounf of sales discount granted from value added
Taxable Net Income Of the gross selling price or receipts can be
deducted gross income, net of
The gross sales or receipts to be P2,000,000 and shal be proper documentation as provided under perinent proVsions
of

reported should be the undiscounted amount. tax, if applicable

The Senior citizenlPWD discount shall be the Tax Code (RA 8424 NIRC, as amended).
reported as part of operating expenses

752 753
Senir (atizens and PI17) Senier
income is:
Private
establishments
their gross income ermploying senior cilizens shall be
Citizens and PIWD
17. The taxable net c. P1,800,000 citizens" provided eqivalent to 15%% ot entiied
the total to
a. P1,500,000
d. P2,000,000
amount paid as additional
deducion ftom
salaries and weces
.The ermployment
e
b. P1,600,000 shall
annual taratle have to cortnue for a
moome ot he peniod of at sis
Answer
level as may be seruor CAZenis) doesleast
determuned by the NEDA ol
(6) months
GROSS SALES 1a' erceed the poverty
Regular customers
P8,000,0000
20. Using the above information, exc that 20'% of the
Senior Citizens (SC) 2,000,000 eceiving a
disability receiving total compensation of regular employees are
Total gross receipts P10.000.000 of the corporation is P160,000, the deducible persons with
Less a. P1,152,000 compensation expense
Cost of Sales - Regular (5,000,000)
(1,000.000) b. P1,155,000 P1,178.000
Cost of Sales - SC
d.P1,192,000
Other deductible expense
P2M+ SC discount ofP500,00) (2,500,000) Answer: B
Taxable Net Income P1,500,000 Regular employees (Pa00,000 x 806)
PWD employees (PB00,000 x P640,0
209%)
18. Which of the following statements is
correct?
sale to a PWD or SC is considered as coc a
Additional Compensaion-PWD@25% 150000
a. The input tax attributable to vat exempt Senior citizen employees: 40,000
an expense account by business establishments and shall not be allowed as innid With salary grade above
poverty level
tax credit. With salary grade below
poverty
level 200,000
b. The vat exemption of a SC or PWD shall not cover other indirect taxes that mav ha Additional deductible salary (100,000 x 100,000
15%)
passed on by the seller to a SC or PWD buyer, such as peroentage tax, excisetax,
Total Compensation Expense 15.000
Additional deductible compensation of 25% for PWD
employees
P1,155,000
etc. Title Il; Sec. 8(b) of RA 7277
In case of letter "b', the discount must be on the total cost of the goods or services Magna Carta for PWDs, as amended. provides.
-

C. "Private entities that employs disabled

persons who meet the required skils or
charged by the seller, exclusive of vat. either regular employee, apprentice or leamer, shal be
as quaifcatons
entitled to an addtional deduction
from their gross income equivalent to 25% of the
d. All of the above total amount paid as salaries and
wages to
disabled persons
Answer: D; (RR 5-2017)

21. Which of the following statements is not a requirement in order for private establishments
Use thefollwingdatafor the next two2 questions:
Bobads Corporation employs both regular and senior ciizen employees and paid the following employing senior citizens to be entitled to additonal deduction from their gross income
equivalent to fifteen percent (15%) of the total amount paid as saaries and wages to senior
compensation:
citizens?
Regular employees P800,000
a. The employment shallhave to continue for a period ofat least one (1) year.
Senior citizen employees b. The annual taxable income of the senior citizen does not exceed the poverty level as
With salary grade above poverty level 200,000 determined by NEDA.
With salary grade below poverty level 100,000 C. Both statements "a" and "b"
d. Neither "a" nor"b
19. The deductible compensation expense is:
a. P1,100,000
Answer: A
c.P1,120,000
b. P1,115,000 d.P1,145,000 22. Private entities that employ disabled persons who meet the required skils or qulificatons,
Answer: B as
entner or leamer, shall be entitled to an additional
regular employee, apprentice
deduction
Regular employees P800,000 from gross income equivalent to:
15% of the total amount paid as salaries and wages to PWDS.
Senior citizen employees:
With salary grade above poverty level b. 25% of the total amount paid as salaries and wages to PvWDS.
200,000
With salary grade below salaries and wages to PMWDs.
poverty level
Additional deductible salary (100,000 x
15%)
100,000
0 % of the total amount paid as to PWDS.
Total Compensation Expense 15,000 a. 100% of the total amount paid as salaries and wages
P1.115,000
Additional Compensation of 15% for those
Answer: B
RR7-2010 provides with salary grade of below poveriy level.

754 755
neylizgAs aná/I1/. Scnner
pnce of P9.520.
ng pnce P9.520 inclusive of
tizgns and Pl1D.
senor cihzen, bought
a medicine with a selirng
VAT URNAL
Cash ENTRIOF IHE CLNC
LolaLta. a Lola?
23 amount to be pand by PWO iscout Espensa
How much is he net C. P6,916
a P8.500 d. P6,800 Profensinal fen
P7616
business ta
21. How mUch is the
o
te ciric on ts
Answer: D P8500
a. P26.88
P120 series renrtesed ta te PW
520/1.12
Purchase pro P9 (1.700 b. P96
Dhsnun: (PE 500
1 205) . il
Amount lo te pak by
the SC P6.800 Answer: D
OURNAL ENTRY OF THE SELLER Assum the dental cinic is non-vat
Cash
P6. 800 28. registered
the vat threshold. How much is the amcunt o
and ts annial
goss
SC Dscouni Expense
1.700
P8.500 a. P&00 . P1000
be çaid
by te PO?
rerects neer eTee
Saies
Record the sales at
undiscounted amount b. Pe96
The 20% discount shall be recognized as part o1 operaing expenses dP1,120
Any input vat attributable to
the sale to SC and PWDs shall be classified ae
Answer: B
Prof. fee
09eratng eNDENses Discount (P1,120x 20%)
Ravenue net of discount
his 4 grandchildren on account of i .
citzen went to Jollibee to treat
24 Loic Sot. a senior
and beverages With gross amount of P1,120 inclusiveof
retrement They consumed foods JOURNAL
Cash
ENTRY OE THE CLNC
lolo Sot?
VAT How much is amount to be paid by PWD Discount Expense
P896 c. P1.056
Professional fees
P20 d. P1,100 P20
Answer: C 20 Based on the assumpton n the mmediately preceding umber. how mucs he usiness
Aliocated the GC P1.120x4/5= P896 tax due of the cinic on its services rendered to he PWD?
Allocated to the SC = P1,120 x 1/5 /1.12 x 80%
=
P160
a. P26.88 c.P120
Amount to be Paid = PE96+160 P1,056
b. P96

25 Gabniana Cinic, a VAT-registered entity. perfomed a prosthetic surgery on the legs of Loyd, Answer: A
Prof. fee
a person with disabity. The total cost of medical operation was P500,000. Being a disabled
Discount(P1.120 x 20%)
person, Loyd received 20% discount from Gabriana. How much is the total amount to be Revenue net of disccunt
paid by Loyd? x Percentage tax % under Sec. 115
a P400.000 c. P500.000 Percentage Tax Due
b P448.000 d. P560.000
Answer: A.; Amount to be Paid= P500.000x 80% = P400,000 JOURNAL ENTRY OF THE CLINIC
Percentage tax due expense 26 8
Percentage tax payacile 26 38
Use thefollowngdatafor the nextfour14)quEstions:
Tootrfui Denta Clinic rendered dental services to a PWD.
P1.120 inciusive of vat
The professional fee amounted to 30. Statement 1: The 20% discount granted to a Senior Cizen cames with it an exempton
from vat.
26. How much is the amount to be paid by the PWD?
Statement 2: The 5% special discount granted to a Senior Citizen camies with it an
P800 c. P1,000
b. Pe96 exemption from vat.
d. P1,120
a. Only statement 1 is correct
Answer: A b. Only statement 2 is corect
Prol fee inc of vat
P1,120 C. Both statements are correct
Less: vat (P1,120 3/28)
x
(120) d. Both statements are incorrect
Prot. tee excl. of vat
P1,0
Discourt(P1,000x 20%)
200) Answer: A
Amount to bDE pad by the SC
PBO0

756 757
Senir Citizens and PlVD
31. Statement 1: The 20% discount granted to a PWDS carries with it an exem
PWD
Statement 2: The 5% special discount granted to a PWD camies with it annption
& from vat.
vat.
xemption from
a. Only statement 1 is correct
b. Only statement 2 is correct
C. Both statements are correct
d. Both statements are incorrect
Answer: A
32 refer to goods "vital to the needs of consumers, for their sustenaneo
existence" while prime commodities are goods that are "essential" to them, and

a. Basic necessities
b. Prime commodities
C. Non-essential goods
d. Any of the above
Answer: A
33. are goods not considered as basic necesities but are essential to
Consumers
a. Basic necessities
b. Prime commodities
C. Non-essential goods
d. Any of the above
Answer: B
34. The 5% special discount granted to senior citizens on basic and prime commodities is
limited to purchases not exceeding. per calendar week without carry-over of
the unused amount".
a. P1,000 c. P1,300
b. P1,200 d. P1,500
Answer: C

35. The 5% special discount granted to PWDs on basic and prime commodities is limted t0
purchases not exceeding "per calendar week without carry-over of the unuseo
amount".
a. P1,000 C. P1,300
b. P1,200 d. P1.500
Answer: C

758