BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Positive research and negative research
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Normative research and negative research
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Normative research and positive research
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Deductive research and normative research
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Detailed explanation-1: -Two of the most common and influential theories are positive accounting and normative accounting.
Detailed explanation-2: -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-3: -“Positive theory is a theory that tries to explain how the world works in a value-free way, while a normative theory provides a value-based view about what the world ought to be like or how it should to work. In general, positive theories express what is, while normative theories express what ought to be.”
Detailed explanation-4: -PAT seeks to forecast which companies will adopt a precise accounting method and explain which accounting practices will be used under particular circumstances, whereas normative theories provide prescription about how the process of financial accounting should be stipulated (Deegan, 2006: 217).