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c) The chairman of the board of directors of the firm for which you work has told you that accounting numbers based on historical cost are of little value to him. Fair values, he argues, are considerably more important to the board of directors than "out-of-date costs." Provide some evidence to persuade him that accounting data should continue to be based on historical costs.

c) The chairman of the board of directors of the firm for which you work has told you that accounting numbers based on historical cost are of little value to him. Fair values, he argues, are considerably more important to the board of directors than "out-of-date costs." Provide some evidence to persuade him that accounting data should continue to be based on historical costs.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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c) The chairman of the board of directors of the firm for which you work has told you that accounting numbers based on historical cost are of little value to him. Fair values, he argues, are considerably more important to the board of directors than "out-of-date costs." Provide some evidence to persuade him that accounting data should continue to be based on historical costs. d) Do you agree that the company should recognise the costs as expenses only after the product has been sold to the customer and not when the company has received the cash from the customer? Justify your argument.
Transcribed Image Text:c) The chairman of the board of directors of the firm for which you work has told you that accounting numbers based on historical cost are of little value to him. Fair values, he argues, are considerably more important to the board of directors than "out-of-date costs." Provide some evidence to persuade him that accounting data should continue to be based on historical costs. d) Do you agree that the company should recognise the costs as expenses only after the product has been sold to the customer and not when the company has received the cash from the customer? Justify your argument.
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