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Cash Flows and Net Realizable Values: Further Evidence of the Intuitive Concepts
Author(s) -
LEE TOM
Publication year - 1984
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/j.1467-6281.1984.tb00196.x
Subject(s) - cash flow , appeal , relevance (law) , net income , net (polyhedron) , cash , process (computing) , accounting , perception , economics , business , actuarial science , econometrics , computer science , psychology , finance , mathematics , political science , geometry , neuroscience , law , operating system
This paper reports the results of a survey of students with and without prior knowledge of accounting with a view to identifying any differences in their perception of the relevance of current prices of assets. The combination of cash flows and net realizable values appears to have an intuitive appeal to students with no prior exposure to accounting concepts or practices. In the process of learning about accounting, it seems that students learn to abandon net realizable values in favour of historical costs.