BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Detailed explanation-1: -Psychological pragmatic approach: theory depends on observations of the reactions of users to the accountants’ outputs. a reaction is taken as evidence that the outputs are useful and contain relevant information.
Detailed explanation-2: -Accounting theory provides a guide for effective accounting and financial reporting. Accounting theory involves the assumptions and methodologies used in financial reporting, requiring a review of accounting practices and the regulatory framework.
Detailed explanation-3: -Predictive approach in accounting theory is based on the concept of relevant information. The assumption is that the relevant information, if communicated, commands greater predictive ability in predicting the future events about a business enterprise.
Detailed explanation-4: -Accounting theory is defined as a cohesive set of conceptual, hypothetical and pragmatic proposition explaining and guiding the accountant’s actions in identifying, measuring and communicating economic information to users of financial statement, (American Accounting Association (A.A.A). 1966).