WorksheetsCustoms Valuation Method
Total questions: 50
Worksheet time: 3hrs 30mins
Name
Class
Date
1.
Which of the following is not to be considered as a principle in the determination of dutiable value under the
WTO Valuation Agreement?
a)
There is a need for a fair, uniform and neutral system for the valuation of goods for customs purposes that
precludes the use of arbitrary or fictitious dutiable values;
b)
The basis for valuation of goods for customs purposes should, to the greatest extent possible, be the transaction
value of the goods being valued;
c)
The dutiable value should be based on simple and equitable criteria consistent with commercial practices and
that valuation procedures should be of general application without distinction between sources of supply;
d)
Valuation procedures may be used to combat dumping
2.
Which of the following is a mandatory addition/adjustment in a Free Carrier (FCA) delivered to carrier
transaction?
a)
Cost of loading to the delivering vehicle to the terminal.
b)
Export clearance.
c)
Unloading cost at the terminal.
d)
All of the above are mandatory additions.
3.
Who shall have the final decision with regard to valuing goods as an exception to the customs valuation
sequential rule?
a)
District Collector
b)
Commissioner of Customs
c)
Assistant Commissioner, PCAG
d)
Deputy Commissioner, AOCG
4.
What is the term which refers to the recognized consensus or substantial authoritative support within a country
at a particular time as to which economic resources and obligations should be recorded as assets and liabilities,
which changes in assets and liabilities should be recorded, how the assets and liabilities and changes in them
should be measured, what information should be disclosed and how it should be disclosed, and which financial
statements should be prepared?
a)
Balance sheet
b)
Income statement
c)
Profit and loss statement
d)
Generally Accepted Accounting Principles
5.
What GAAP shall be used in determining the amount of adjustment to the PAPP for raw materials produced at
the country of importation which were supplied to a foreign supplier?
a)
What is acceptable in the country of importation
b)
What is acceptable in the exporting country
c)
What is internationally accepted
d)
The standard which may be chosen by the customs administration
6.
Bureau of Customs through evidences available was able to establish that there is relationship between the
buyer and the seller and as such the District Collector decided to reject the entered value. Is the action of the
District Collector valid?
a)
Yes.
b)
No.
c)
Yes, because relationship has established the presumption that such relationship influenced the price.
d)
No, in the absence of proof that relationship influenced the price.
7.
Last year “A” ordered 500 pcs. Of “X” item valued at US$250,000 CIP Manila but rejected part of a delivery made
by “B” in the amount of US$50,000.00. A formal claim was made by “A” and “B” has not settled the claim.
Today a shipment arrived from “B” consigned to “A” for 500 pcs. “X” but the commercial invoice issued by “B”
shows only an amount of US$200,000.00 CIP Manila. The explanation by “B” to “A” is that the claim of
US$50,000 has been deducted from the regular price of US$250,000 CIP Manila. What is the proper PAPP for
customs purposes?
a)
US$200,000.00 CIP Manila which is the invoice value
b)
US$250,000.00 CIP Manila
c)
US200,000.00- freight and insurance
d)
US$250,000.00 – freight and insurance
8.
Which of the following that cost of packing and containers for ordered goods to be ready for shipment have to
be added to the price actually paid or payable to determine dutiable value?
a)
EXW
b)
FCA
c)
CPT
d)
None of the choices
9.
In making a quotation on DDP basis which of the following cost elements is not to be included by the exporter in
his export price costing?
a)
Customs duty
b)
Customs clearing expenses
c)
Unloading at the agreed place of delivery (generally the consignee’s warehouse)
d)
All of the above are to be included in the DDP price
10.
How shall the dutiable value of promotional materials sent free of charge be computed?
a)
Based on Method One
b)
Based on Method Two
c)
Based on Method Six
d)
Based on the sequential rule.
11.
To induce buyers to purchase big volume “A” offered to buyer “B” a volume discount of 50% if 10,000 pieces of
laser pointers would be purchased from March to May 2022. The price shall be US$1.00 CIP per piece. However,
if the quantity purchased is less than 10,000 for the 2-month period the price shall be US$2.00 CIP per piece.
“B” initially purchased 3,000 pieces in March 2022 and the invoice issued by “A” shows US$6,000.00. The next
purchase was in May 15, 2022 for 7,000 pieces and the invoice issued shows US$4,000.00.
The US$4,000.00 was computed at (US$1.00) (10,000) – US$6,000.00.
What is the PAPP for the 7,000 pieces?
a)
US$14,000.00
b)
US$4,000.00
c)
US$7,000.00
d)
US$4,000.00
12.
In which of the following situations precludes the use of Method one?
a)
Buyer should remit to seller 20% of CIF value within thirty (30) days from the sale of the imported goods
in the domestic market.
b)
Buyer should remit to seller 10% of value of purchases made from the seller within six (6) months from
the arrival of the goods. It is presumed that the purchased imported goods will be sold within six (6)
months from arrival in the country of importation.
c)
Buyer must remit to the seller 10% of the projected operating income s of the buyer for a six (6) month
period.
d)
All of the choices do not preclude the use of Method One.
13.
Due to supply disruptions caused by the zero covid 19 policy in China “A” has shifted from China to Australia as
supplier for his raw materials requirements. What “A” did was to contact Australian “B” to look on his behalf for
possible suppliers. Payment to suppliers shall be made directly by “A”. For his efforts “A” shall pay US$500.00 for
every 1X20’ valued at US$5,000.00 CFR shipped by the sourced suppliers. What shall be the PAPP for a 1X20’?
a)
US$5,000.00 + $500.00+ insurance
b)
US$5,000.00+ insurance
c)
US$5,000.00
d)
US$5,000.00+ $500.00
14.
Based on WTO Valuation Agreement in which of the following choices that there is no relationship?
a)
Seller and buyer are officers or directors of one another’s businesses
b)
Buyer and seller are legally recognized partners in business.
c)
Any person directly or indirectly owns, controls or holds thirteen (13) per cent or more of the outstanding voting
stock or shares of both of them.
d)
There is relationship in any of the above instances
15.
Based on WTO Valuation Agreement in which of the following choices is relationship between buyer and seller is
absent.
a)
One of them directly or indirectly controls the other;
b)
Both of them are directly or indirectly controlled by a third person;
c)
Together they directly or indirectly control a third person;
d)
Supplier is the son of the buyer’s 1 st cousin
16.
What GAAP is to be used in determining the proper cost of raw materials in determining dutiable value when it
cannot be determined with the use of Method Four?
a)
What is acceptable in the importing country
b)
What is acceptable in the exporting country
c)
What is acceptable internationally
d)
The standard which may be chosen by the customs administration
17.
In DPU transaction which of the following cost/expense elements is not considered as adjustment to PAPP?
a)
Delivery from port of discharge to agreed place of delivery.
b)
Unloading at the port of importation.
c)
Customs clearance at the country of importation
d)
All of the above are included in a DPU transaction.
18.
Relative the concept of test values in determining whether relationship influenced price, which of the following
statements is not proper?
a)
The test values are to be used at the initiative of the appraiser
b)
Test values should only be used for comparison purposes only
c)
Test values should not be used as substitute values
d)
All the statements are proper
19.
“A” initially ordered 500 units electric fans from “B” of Sri Lanka. The design for the fans were done by Filipino
engineers hired by “A” at a cost of P1,000,000.00 which was supplied to “B”. The total cost of electric fans is
P5,000,000.00 CIP. What is the proper PAPP to be declared in the Goods Declaration?
a)
P5,000,000.00+ P1,000,000.00
b)
P5,000,000.00
c)
P5,000,000.00 + freight + insurance
d)
P5,000,000.00+ pro-rate cost of P1,000,000.00 per Philippine Financial Reporting Standards. The design cost has
to be allocated to the total numbers of fans to be ordered from “B”. 500 units is just the initial order
20.
The methods of valuation are set out in a sequential order of application. The primary method for customs
valuation is the Transaction Value and imported goods are to be valued in accordance with the provisions of this
method whenever the conditions prescribed for its use are fulfilled.
Which of the following is the exception to the sequential rule?
a)
From Transaction Value to Transaction Value of Similar Goods
b)
From Transaction Value of Identical Goods to Deductive Value
c)
From Transaction Value of Similar Goods to Computed Value
d)
From Computed Value to Fallback Value Method
21.
Which of the following choices ensure that the unit price considered for purposes of determining
dutiable value with the use of Method Four shall be objective and fair for the government?
a)
The buyer in the Philippines of the identical or similar imported goods did not supply any assist in the
production of the goods.
b)
The seller importer in the Philippines is not related to the local buyer.
c)
The imported, identical or similar goods sold in the Philippines are imported in the same condition as
the goods being valued.
d)
All of the choices.
22.
In determining the dutiable value using Deductive Method, the Bureau of Customs shall make
deductions to the selling price and therefore considerations on how the value of deductions will be
arrived at using the generally accepted accounting principle. Which of the following is the proper
accounting standard to be used?
a)
What is acceptable in the Philippines
b)
What is acceptable in the exporting country
c)
What is internationally accepted
d)
The standard which may be chosen by the customs administration
23.
If you are an importer doing business in Escolta, Manila and would want to import from New South
Wales, what is the purchase term under INCOTERMS 2020 if you want the order to be shipped out by air
and the purchase price would already include freight?
a)
CFR Manila
b)
CPT Escolta, Manila
c)
CPT NAIA
d)
CPT New South Walres
24.
Assuming that that use of TV and TV of Identical Goods is precluded then TV of Similar Goods may be
used. If the previously accepted TV of Similar Goods are $100, $150, $120, and $95 as found in e-VRIS
what should be used in computing for the dutiable value? The previously accepted TVs are all in the
same commercial level and quantity as the good being valued.
a)
Simple average of the four (4) values
b)
$150
c)
$95
d)
Weighted average of the four (4) values
25.
Which of the following offices is responsible for establishing and maintaining the database of values of
previously accepted transaction values
a)
PCAG
b)
FED
c)
IAS
d)
All of the above offices are responsible in one way or another
26.
If an importation is to be valued using Method Two an importation shall be valued by referring to value
of identical goods exported into the country “at or about the same time” of the importation being
valued. What is the time frame of the phrase “at or about the same time”?
a)
Within 90 days before lodgment of goods declaration covering the importation being valued.
b)
Within 45 days before lodgment of the goods declaration covering the importation being valued.
c)
Within 45 days before or after bill of lading date of the importation being valued.
d)
Within 90 days of bill of lading date of the importation being valued.
27.
In the use of Method Two the identical goods must be produced by the same person in the country of
production of the goods being valued. Supposing there are no identical goods produced by the same
person?
a)
Proceed to the use of Method Three
b)
Identical goods produced by the same person who produced the goods being valued at a country
other than the country of exportation
c)
Identical goods produced by a different person in the same country of exportation of the goods
being valued.
d)
Proceed to the use of Method Four, if Method Three cannot be used.
28.
Under Method Six which of the following may be used in determining dutiable value?
a)
The selling price of wooden furniture produced in the Philippines.
b)
The price of wooden furniture sold in Bangkok night market.
c)
The transaction value of similar goods but of different quantity level.
d)
Whichever is higher between two alternative values
29.
SAD, Box Number where the Valuation Method used in determining dutiable is indicated.
a)
Box 33
b)
Box 43
c)
Box 31
d)
Box 53
30.
Which of the following is not considered as assist in the context of GATT Valuation Code?
a)
Cost of labels supplied by the buyer
b)
Cost of design done at the country of importation
c)
Cost of raw materials supplied by the buyer
d)
Cost of design done at the country of exportation
31.
In computing for the dutiable value under Method Five which of the following is not considered as a cost
element?
a)
Ocean freight
b)
Customs brokerage fee at the country of exportation
c)
Customs brokerage fee at the country of destination
d)
Above all cost elements are to be included in the computing the DV under Method Five
32.
The applicable purchase term under Incoterms 2020 where delivery takes place at the factory of the
seller but export clearance shall be the responsibility of the seller.
a)
EXW
b)
FAS
c)
FOB
d)
FCA
33.
In the use the transaction value of identical goods the Bureau of Customs shall refer to previously
accepted Transaction Value. What should be considered to make the valuation fair?
a)
The previously accepted Transaction ‘value must be of the same commercial level and in
substantially the same quantity as the goods being valued shall be used to determine the
dutiable value.
b)
The transaction value of identical goods sold at a different commercial level and/or in different
quantities shall be considered but adjusted to take account of differences attributable to
commercial level and/or to quantity
c)
Adjustments should only be made on the basis of demonstrated evidence which clearly
establishes the reasonableness and accuracy of the adjustment.
d)
All of the above.
34.
Which of the following is not an element in the definition of “identical goods”?
a)
The same in all respects including physical characteristics, quality and reputation.
b)
Produced by the producer of the goods being valued.
c)
None of the choices
d)
Produced in the same country as the goods being valued.
35.
Which of the following is not an attribute in the definition of similar goods?
a)
Have like characteristics and like component materials.
b)
Are capable of performing the same functions as the goods being valued.
c)
Are commercially interchangeable with the goods being valued.
d)
Are articles which may have been produced in another country other than the country of
production of the goods being valued
36.
In the goods declaration (SAD) who shall indicate the valuation method used to value an importation?
a)
Declarant
b)
Customs Broker/declarant
c)
Customs Examiner/Appraiser
d)
VASP
37.
By this method, the dutiable value is determined on the basis of sales in the Philippines of the goods
being valued or of identical or similar imported goods, less certain specified expenses resulting from the
importation and sale of the goods. What is this method of valuation?
a)
Deductive method
b)
Fallback value
c)
Computed value
d)
Method 5
38.
These are goods although not alike in all respects have the same characteristics and like component
materials, capable of performing the same functions as the goods being valued, commercially
interchangeable with the goods being valued, produced in the same country as the goods being valued
and produced by the producer of the goods being valued.
a)
Same goods
b)
Similar goods
c)
Identical goods
d)
Comparable goods
39.
In using Deductive Method to value imported goods, what is a cost element that shall not be deducted
to the price per unit of identical or similar goods which was sold on the greatest aggregate at first level
sale.
a)
VAT
b)
Customs duty
c)
Customs broker’s fees for customs clearance
d)
All of the above are cost elements that must be deducted from the unit price.
40.
Which of the following is a valid basis in establishing dutiable value under Fallback Value?
a)
The selling price in the Philippines of goods produced in the Philippines.
b)
A system that provides for the acceptance for customs purposes of the higher of two
alternative values.
c)
The price of goods in the domestic market of the country of exportation.
d)
Deductive Method but the time frame “at or about the time of importation of the goods being
valued” exceeds the 90-day threshold
41.
When may a goods declaration be hit by the valuation criteria in the e-VRIS ?
a)
When entered value falls below value of the last importation of the importer
b)
When declared value is not supported by proof of payment
c)
When entered value is below the minimum of the allowable range of the reference values
d)
In any of the above situation.
42.
“A” an importer would want to purchase from “B” foreign supplier on the basis of everything will be
done at the country of exportation by “B” including payment of sea freight. At POM which Is the port of
discharge “A” shall handle customs clearance up to delivery to his warehouse. Unloading from the
carrying vessel shall be for the account “A” because it is not included in the freight as arranged by “B”.
What is the proper Incoterms 2020?
a)
CFR South Harbor, Manila
b)
CPT South Harbor, Manila
c)
DAP South Harbor, Manila
d)
FAS. South Harbor, Manila
43.
What is a condition before Computed Value may be used to value an importation?
a)
The approval of the Commissioner of Customs is secured.
b)
There must be an approval of the foreign government.
c)
There must be relationship between the buyer and the seller.
d)
There must be proper coordination with a certified public accountant.
44.
Buyer “A” provided the engineering design for Product “B” which was manufactured by Foreign Supplier
“C”. The design was done at the country of Buyer “A” which amounted to US$25,000.00.
Should US$25,000.00 be added to the price actually paid or payable when the dutiable value is being
computed?
a)
Yes, the full amount of US$25,000.00 should be added being a mandatory addition.
b)
Yes, but the amount of US$25,000.00 should be apportioned on the goods ordered based on
the GAAP of the country of importation.
c)
No, because US$25,000.00 should be considered as permissible deduction.
d)
No, because US$25,000.00 is not a mandatory addition and not subject to payment of
customs duty.
45.
Is the price indicated in the commercial invoice always the price actually paid or payable for purposes of
determining dutiable value using Method One?
a)
Yes, especially if expressed in Incoterms 2020
b)
No, because there may be some amounts that are not included in the invoice price
c)
No, because mandatory additions must be considered.
d)
Yes, because of WVA rules.
46.
Buyer has a representation in a foreign country and the work of his representative is to source suppliers
for him. For his efforts the representative is given a compensation of US$1,000.00 for every transaction
concluded with a supplier he has sourced at the country of exportation. What shall be the treatment of
the US$1,000.00 for purposes of computing dutiable value of imported goods? Choose the best
statement.
a)
The US$1,000.00 is dutiable.
b)
The US$1,000.00 is not dutiable.
c)
The US$1,000.00 is a mandatory addition and therefore subject to payment of duties
and taxes.
d)
The US$1,000.00 is a mandatory addition if the supplier will include the amount in the
invoice value he will issue.
47.
A new exporter does not want to be bothered by anything except production and packaging of his
export products. The exporter is operating in Nueva Ecija and the buyer is in United Kingdom.
What should be selling term in Incoterms 2020?
a)
EXW Nueva Ecija
b)
EXW United Kingdom
c)
DDP Nueva Ecija
d)
DDP United Kingdom
48.
The importer intends to buy a very sensitive item such that he does not want to do anything with the
physical handling of the goods. He wants the goods to delivered to a specific place in his warehouse. The
handling of the item requires utmost expertise on the matter. The supplier quoted EXW New Delhi,
India. The address of the importer is Calvo Building, Escolta.
What is the applicable Incoterm that should negotiated by the importer to his supplier?
a)
DDP
b)
DPU
c)
DAP
d)
EXW
49.
In Computed Value which of the following cost elements shall not be considered?
a)
Cost of Insurance coverage from port of loading to port of entry
b)
Cost of inland marine to cover the risk of handling at the country of exportation.
c)
Cost of unloading the goods at the port of entry.
d)
All of the above are to be considered in the valuing the goods using Method Five.
50.
What is the applicable term under Incoterms 2020 for a transaction with following terms and
conditions?
1. Marine insurance will be arranged by foreign buyer;
2. Foreign buyer will avail of the services of an international freight forwarder in the
transport of the goods from country of origin;
3. Exporter will handle customs procedures at the port of loading;
4. Exporter will deliver to the international freight forwarder’s warehouse; and
5. Shipment shall be via sea freight.
a)
EXW
b)
FOB
c)
FCA
d)
FAS
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