BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Normative theories often evolve as a result of research performed in relation to positive theories
|
|
|
Facts about current accounting practice are not considered in the development of normative theories
|
|
|
Normative theories are not likely to evolve from the consideration of positive theories
|
|
|
Normative theories always evolve as a consequence or result of positive theories
|
Detailed explanation-1: -“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-2: -Normative starts with the theory and deduces to specific policies, while positive starts with specific policies, and generalizes to the higher-level principles.
Detailed explanation-3: -Normative accounting theories and research seek to: A Explain and predict particular phenomena based on observation.
Detailed explanation-4: -The answer is c); Capital Markets-based (security price) research.