Exercise 7.1 - CMCS for OCD

It is the commitment by a government agency arising from an act of a duly authorized official which binds the government to the immediate or eventual payment of a sum of money.

• Liability

• Accounts Payable

• Obligation

A valid and legal obligations of NGAs/ OUs, for which, goods/ services/ projects have been delivered/ rendered/ completed and accepted, regardless of the year when these obligations were incurred.

• Liability

• Accounts Payable

• Obligation

A firm obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits or service potential.

• Liability

• Accounts Payable

• Obligation

Which transaction gives rise to an accounts payable?

• Signing of a contract for supply of goods

• Delivery of goods with invoice and inspection report

• Approval of the Annual Procurement Plan (APP)

•  Release of Notice of Cash Allocation (NCA)

What is the main purpose of withholding tax?

• To reduce business income

• To increase product prices

• To collect income tax in advance

•  To eliminate tax compliance

What form is issued to a payee as proof of creditable tax withheld?

• BIR Form 1701

• BIR Form 2303

• BIR Form 2316

•   BIR Form 2307

What is the current standard VAT rate in the Philippines?

• 5%

• 10%

• 12%

•  15%

Which of the following types of withholding tax is not creditable against income tax due?

• Expanded Withholding Tax

• Final Withholding Tax

• Withholding Tax on Compensation

• All of the above are creditable

Which of the following suppliers is subject to 1% EWT?

•  Supplier of janitorial services

• Supplier of office furniture

• Consultant paid for a feasibility study

• Lease of building from a corporation

What happens to creditable withholding tax at the end of the year?

•  It is refunded in full

•  It is added to gross income

• It is credited against the taxpayer’s income tax due

• It is ignored during tax filing