The Dream Life Theater of Mine

well, while doing my ACC304 assignments, I am pondering over something: What if accounting did not grow? What if the accounting profession do not converge? Why are there so many changes in accounting standards and why are they ever a changing? I just wished it didn't...then we wouldn't have so much standards to follow, but nevertheless, thanks to those @#$%^&* Enron people and Arthur Andersen, accountants are nothing much worse than criminals..I just into accounts cos of the love for numbers and money.. Accountants - underpaid but overworked...and forced to fraudulent accounting of firms wealth.. wished there is a real life accounting practice on carbon reporting, but judging from preliminary info researched, the world is not ready yet for GHG reporting... sigh...do we even not care about externalities accounting? at least scientists do? =PP

Tutorial 9 Answers - chapter 5 rose and marquis referred to textbooks Question 1: 1. facilitates the flow of current savings into investment that promote economic growth 2. reallocates the funds to projects with high returns 3. Equate the money supply with demand for investments (Liquidity Preference Interest Rate theory) 4. An important policy tool for monetary policy Question 2 Risk free rate = rate that is earned without default risk. this risk free rate is a part of the other interest rates, where the risk free rate is anchored to interest rate and the difference is the risk premium. for example CAPM => ke = Rf + (Beta)(Rm - Rf) where Rf = risk free rate or return Rm - Rf = risk premium ke = cost of equity Q3 refer to text... assumptions of the classic theory - ignores the FI ablilty to create credit - ignores the income impact on investment demand and savings supplied Q4 refer to text for full explanation assumption of preference liquidity theory - income is stable -constant