Financial Accounting Theory Question Paper
Financial Accounting Theory
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2010
UNIVERSITY EXAMINATIONS: 2009/2010
FIRST YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CAA 301-A : FINANCIAL ACCOUNTING THEORY (SUNDAY)
DATE: AUGUST 2010 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
a) Discuss the separate entity concept as applied to all forms of business organizations
b) State and explain the factors that determine whether a business unit is a going concern
c) State and discuss the functions of money as a measurement? What are some of the problems
associated with this concept? How does it limit the scope of accounting reports?
d) “If nothing is paid for acquiring an asset, it will not be recorded at all.” Explain your stand on
this quotation.
e) Explain the concept of accounting period, citing its advantages, and its linkage to the accrual
and matching concepts.
f) Discuss the concept of cost in details
[30 Marks]
QUESTION TWO
a) Explain why the discussion of the “usefulness of accounting information” is focused mainly on
investors and creditors. What is your view on this?
b) What is the significance of accounting conventions?
c) Discuss financial ratio analysis tool as used by different financial statements’ users, highlight
its different users, user-orientation and its limitations
[20 Marks]
2
QUESTION THREE
a) Define inflation and discuss its problems to the historical cost-based system of accounting and
the use of financial reporting to determine accountability
b) Examine some of the principal financial responses to inflation and changing prices—prices
indexes, inflation accounting, general purchasing power adjustment, current value approaches,
among others
c) Discuss the problems involved in determining current value depreciation during inflation
d) Explain the problems involved in determining purchasing power gains on long-term debt
during inflation
[20 Marks]
QUESTION FOUR
The most valuable capital is that which is invested in human beings by companies. In light of this:
a) Discuss the significance of accounting for human resources
b) Explain briefly some of the methods of human resource accounting
c) Explain the problems that a firm may face in accounting for the human resource
d) You, individually, do you argue for or against human resource accounting? Explain your
answer.
QUESTION FIVE
The basic accounting assumptions, concepts and conventions have been contained in the following
standards:
a) IAS 1 - disclosure of accounting policies (An International Standard)
b) KAS 1 - disclosure of accounting policies (A Kenyan Standard)
c) SSAP 2 - Fundamental accounting concept (A U.K Standard)
Compare and contrast the above standards [20 Marks]
More Question Papers
Exams With Marking Schemes