The study of accounting theory enables to understand our past and provide us a positive reception of how our recent practices and problems came into being. Historical investigation also tells that certain problems are continuing and may not be capable of an everlasting solution for example accounting for intangible and changing price levels. The accounting theory’s development came up because of needs and changes in accounting concepts and techniques. The main purpose of accounting is to plan periodic matching of revenues and cost. The accounting theory is classified into positive and normative accounting theory. This paper will take into consideration the positive and negative approach of accounting theories; their advantages and disadvantages, comparison and relationships between the two and evidence supporting that where each of the approaches might be appropriate in the current economic and business environment. Positive Approach The positive approach in accounting starts with observations of financial information of business firms and on the basis of recurring relationships proceeds to draw overview and principles of accounting. Financial and accounting information, hence, represents recurring relationships leads to the formulation of principles. Different steps involved in positive accounting theory are: doing the observations and then recording of all the observations, analysis and then doing classification of these observations in order to detect recurring relationships, inductive derivation of principles of accounting and generalizations from those observations which signify recurring relationships and last step is the testing of generalizations (Rao, 2006, p.57). This approach is appropriate in the business environment in order to explain and forecast management’s choice of standards through analysing the benefits and costs of particular financial exposures in relation to allocation of resources and to various individuals within the economy. This theory is based on the propositions that shareholders, managers, and politicians or regulators are rational and that they try to make best use of their utility, which is related to their reward and therefore to their wealth. The preference of an accounting policy by any of these groups depends on a comparison of the relative benefits and costs of different accounting procedures in such a way so as to maximize their utility. For example it will be appropriate in such a business environment where it is assumed that management takes into consideration the effects of the reported accounting of numbers on political cost, information production cost, tax regulation, management compensation, and constraints found in bond-indenture provisions. The fundamental idea of positive theory is to develop hypotheses about factors that persuade the accounting practices and to test the legality of these hypotheses
Accounting Theory Table of Contents Introduction 3 Positive Approach 4 Advantages of Positive Approach 5 Disadvantages of Positive Approach 5 Normative Approach 6 Advantages of Normative Approach 7 Disadvantage of Normative Approach 8 Evidence of Positive Approach 8 Efficient Market Hypothesis 9 Agency Theory 10 Contracting Theory 11 Evidence of Normative Approach 11 Historical Cost Accounting 11 Current Purchasing Power Accounting 12 Current Cost Accounting 12 Comparison between Positive and Normative Approach 13 Relationship between Positive and Normative Approach 14 Conclusion 14 Reference 15 Introduction Accounting is practiced within an implied theoretical framework compiled of principle…
In addition, the paper will focus on how two counselors having different theoretical approaches might help Marie deal with the problems she has. In regard to this, this paper will focus on how each of the theoretical approaches can explain her behavior. Moreover, the paper explores the issues that the theoretical approaches will focus on and part of the problem that they might deal with first.
The gender identity develops in a child under influence of various factors about which different approaches reveal their own findings. In this paper we shall take up and discuss two theories relating to child gender identity and its development. This paper will present the points of similarity as well as contrasts between the two theories.
Research report on normative approach and positive approach Contents Introduction 3 Normative theory 4 Example 6 Advantages 6 Disadvantages 6 Positive Approach 7 Example 9 Conclusion 10 References 12 Introduction Since 15th century accounting is having its existence in the business world.
After the Universal Declaration of Human Rights was put into effect, freedom of speech was guaranteed as a basic fundamental liberty. Even before that President Roosevelt’s four freedoms speech spoke of the desired America where people had freedom of speech and opinion. Since then various theories have been presented regarding freedom of speech.
Thirdly, a theory emphasizes the role of nature versus nurture or looks at contributions from both (Berk, 1996). Below is a brief description of the major theoretical approaches to child development.
Behaviourism perspective took shape mainly through works of John Watson, Ivan Pavlov, Edward Thorndike and B.
Psychological theory is usually thought of as a systematic set of ideas and statements about the scientific study of behavior and cognitive processes. The field of psychology thus seeks to obtain scientific information on everything we think, feel, or do.
Therefore, this paper provides an insightful study of recent innovations in management accounting techniques and various controls employed on the part of the organisation to regulate managerial performance.
The main theme underlying the development of this paper encompasses the developments in management accounting systems and the effectiveness of corresponding measures in regulating managerial performance.
The patient reports (a) depression (b) feelings of inadequacy and low self esteem (c) acute self consciousness in crowds (d) learning disability and an inability to stay focused and maintain concentration (e) hyperactivity as a child (f) difficulty in communicating effectively with others (g) procrastination in applying for a job. Most of these symptoms are closely aligned to the patient’s learning disability with is a neurobiological condition .
We can also relate our development to particular theories and use these as a framework for understanding.
The writer’s own development throughout childhood and adolescence was clearly influenced by environmental factors. At about age 4, the writer witnessed
Although both styles are based on parents expecting children to strictly follow established rules, they also differ greatly and may or may not achieve similar results (Bernstein 42). They are both demanding, but authoritative parenting is responsive and
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