Accounting Tragedy

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My first MBA mid-term exams and lo!!! how royally i screw up my paper. What a start man!!! I am truly amazed that after putting in lot of hard-work for the past few days to ensure a perfect 100% score, i end up messing a golden opportunity.

What surprises me even more is that except perhaps one soul in the class(which is unfortunately me)everyone knew the most liquid asset is "CASH". Now i get it why people say students from engineering background find it tough. It is not because the course is tough or that you would not understand the concepts or any other such related reasons, it is only because engineers love to go "into" the problem, analyze it - using existing definitions, theorems, laws et cetera and finally arrive at "the correct answer". So one may say - "Is mein kya galath hai?" (What is wrong in this?).

Well, while its common sense/hard-wired fact that cash is the most liquid asset for students from commerce or finance background, a typical engineer would think on these lines -

Question given:
Which of the following is the most liquid asset?
A. Inventory
B. Prepaid expense
C. Accounts Receivable
D. Cash

Analysis:

Step 1. What is a liquid asset?
Ans: Any asset which can be converted to "CASH" easily.

Step 2. Which ones can i eliminate?
Ans. Obviously cash man!! Because cash is already liquid. I mean why would one convert cash to "cash" again. So option D is out.

Inventory would take time to be sold because you would have to find a suitable buyer or try making them into finished products.So option A is out.

Prepaid expenses are out too since once you pay rent in advance, or insurance in advance we know its not that easy to get your cash back.

Step 3. Conclusion: The left out option : Accounts Receivable is the answer.

Its needless to say after this point why engineers find it tough initially in a MBA program.

Next up i didn't know how to calculate income from operations. Again the two golden alphabets in front of my name("ER")went about seeking its own way sealing my chances of getting the perfect score shut.

Let's see how the engineer inside me copes up with the forth-coming challenges.

Vartmankal
(TT - 00:29)


Location: India

Comments

  1. UnknownNovember 4, 2009 at 11:19 PM

    and u know wat ur dad is a CA

    ReplyDelete
  2. Sundar VisweswaranNovember 5, 2009 at 10:20 AM

    Its so obvious tat when someone means 'liquid' in the context of accounting or finance or anything related, it means CASH n only CASH.
    I pity u :-)

    ReplyDelete

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