Limitations of Human Resource Accounting

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What is the primary reason why valuing human resources is considered unrealistic?

Human resources are not capable of being owned

There are no specific and clear cut guidelines for 'cost' and 'value' of human resources

There is a fear that HRA may dehumanize and manipulate employees

The period of existence of human resources is uncertain (correct)

What is the objective of human resource accounting?

To increase the productivity of employees

To design training modules

To make decisions on the basis of efficiency (correct)

To reward employees

What is the primary significance of human resource accounting?

To increase the income of the organization

To reduce the cost of human resources

To design training modules

To manage human resources as valuable assets (correct)

What is the limitation of present valuation systems?

They are not universally accepted Signup and view all the answers

What is the acquisition cost related to?

Incurred in acquiring the right man for the right job Signup and view all the answers

What is the yield generated by human resources?

Higher productivity and higher income/profit Signup and view all the answers

What is the primary concept that the opportunity cost approach is based on?

Economist's concept of opportunity cost Signup and view all the answers

Who first advocated the opportunity cost approach?

Heckiman and Jones Signup and view all the answers

What is a limitation of the opportunity cost approach?

It is difficult to evaluate the alternative use of an employee Signup and view all the answers

What is an advantage of the opportunity cost approach?

It ensures optional allocation of human resources Signup and view all the answers

What is another name for the opportunity cost approach?

Market Value Method Signup and view all the answers

Who suggested the standard cost approach?

David Watson Signup and view all the answers

What is the primary focus of the statutory provisions in the Factories Act 1948?

Employee health and safety Signup and view all the answers

What are the two types of costs under the human resource accounting approach?

Acquisition cost and learning cost Signup and view all the answers

What is the main objective of HR value accounting?

To determine the value of investments made by the organization Signup and view all the answers

What is the main advantage of the historical cost approach?

It is simple to understand and easy to implement Signup and view all the answers

What is the basis of the historical cost approach in HR cost accounting?

The actual cost incurred on human resources Signup and view all the answers

What is one of the provisions related to the health of workers in the Factories Act 1948?

Ventilation and temperature Signup and view all the answers

What is a limitation of the historical cost approach?

It is difficult to estimate the number of years to amortize the expenditure Signup and view all the answers

Who developed the replacement cost approach?

Both Rensis Likert and Eric G.Flamholtz Signup and view all the answers

What is the name of the model used to calculate the future value of employees?

Lev and Schwartz model Signup and view all the answers

What is an advantage of the replacement cost approach?

It is more realistic and logical Signup and view all the answers

What is the purpose of HR cost accounting?

To determine the costs incurred by the organization on its employees Signup and view all the answers

What is a limitation of the replacement cost approach?

It may be difficult to find an identical replacement of the existing human resource Signup and view all the answers

What is the primary purpose of categorizing employees based on their hierarchical positions in standard cost method?

To group employees with similar characteristics Signup and view all the answers

What is a limitation of using standard cost method for valuing human resources?

It does not take into account individual differences Signup and view all the answers

What is the main advantage of using the standard cost method for valuing human resources?

It is easy to explain and implement Signup and view all the answers

What is the purpose of determining the total earnings that each group will receive up to retirement age in the Lev and Schwartz approach?

To calculate the present value of human resources Signup and view all the answers

What is the significance of discounting the total earnings at the cost of capital in the Lev and Schwartz approach?

To calculate the net present value of human resources Signup and view all the answers

What is the final step in the Lev and Schwartz approach for valuing human resources?

Discounting the total earnings at the cost of capital Signup and view all the answers