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Accounting Theory Question Paper

Accounting Theory

Course:Bachelor Of Education Arts

Institution: Kenyatta University question papers

Exam Year:2008

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2007/2008
INSTITUTE OF OPEN LEARNING
SPECIAL EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE, BACHELOR OF EDUCATION AND
BACHELOR OF ARTS

BAC 405: ACCOUNTING THEORY

DATE: Thursday 9th October 2008 ____________TIME: 10.00am – 12.00pm
INSTRUCTIONS: Answer ALL questions.

Question 1
(a)
Explain the usefulness of human resource accounting to management in internal reporting. [15 marks]
(b)
Explain the valuation as a step in the matching process. [8 marks]

Question 2
“The concept of physical capital maintenance is incapable of general application to all firms”. Define the concept and explain the statement. [18 marks]

Question 3
(a)
Highlight the different categories of timing differences in accounting for income taxes.
(b)
Kericho Co. Ltd bought a machine for Ksh.1000,000. The company intends to use the machine for five years. Its policy is to use straight line method to depreciate fixed assets. The company’s net profit for the year amounted to Sh.1,500,000. the government allows capital allowance of 100% for this class of assets in the 1st year of issue. Corporation tax is 35%. Calculate the deferred tax for the year. [7 marks]

Question 4
(a)
Compare and contrast “the value theory” and “the events theory” of the accounting practice. [12 marks]
(b)
Discuss the importance accounting theory. [7 marks]