BACHELOR OF BUSINESS ADMINISTRATION

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BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Overview of Theories of AccountingPredictive Theories8. In the mid-to-date 1970 there was a further change in the focus of accounting research and theory development. The major aim of accounting research is explaining and predicting accounting practice, rather than prescribing particular approach. Many accounting researchers during that time move to predictive research. What is the previous research before predictive research?
A
Negative research
B
Prescriptive research
C
Descriptive research
D
Positive research
Explanation: 

Detailed explanation-1: -What is Accounting Theory? An accounting theory is a notion that uses speculations, methodologies, and frameworks in the study of financial reporting (as well as how financial reporting principles are applied in the accounting industry).

Detailed explanation-2: -The key tenets of accounting are explained, including: double entry, substance over form, the matching principle, the revenue recognition principle, cost-benefit, materiality, and conservatism, as is their impact on the overall application of GAAP (Generally Accepted Accounting Principles).

Detailed explanation-3: -Accounting theories provide both the theoretical basis and the rules based on that theoretical basis used to guide accountants in creating useful financial documents. If accounting methods and practices can be considered the meat of accounting, then accounting theories are the bones that lend them shape and structure.

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