Comment #1 An MBA student remarked to another student the following opinion: Accounting is rubbish. I worked
Question:
Comment #1 An MBA student remarked to another student the following opinion: “Accounting is rubbish. I worked for a genetic engineering company and we never looked at the accounting numbers, and our stock price was always growing.” The other MBA student agreed, stating “I worked for an equipment manufacturing company that managed by evaluating the numbers, and our stock price barely improved.”
Comment #2 The owner of a small technology company opined that the company’s accounting system was inadequate. He noted that accounting systems generate historical costs only. He added that since things change so quickly in the technology industry, historical costs are of no value to his company.
Based on the financial and managerial accounting concepts that you have learned in this class, thoroughly evaluate each of the above comments. Show your evaluation by separating them into: (A) Comment # 1; and (B) Comment # 2.
Making Hard Decisions with decision tools
ISBN: 978-0538797573
3rd edition
Authors: Robert Clemen, Terence Reilly