• Home
  • Subjects
  • Finance & Accounting
  • The two main theoretical approaches in accounting theory are the normative approach and the positive approach. The two alternati

The two main theoretical approaches in accounting theory are the normative approach and the positive approach. The two alternati - Essay Example

Only on StudentShare

Extract of sample
The two main theoretical approaches in accounting theory are the normative approach and the positive approach. The two alternati

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. ...Show more


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…
Author : joannehuels
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"The two main theoretical approaches in accounting theory are the normative approach and the positive approach. The two alternati"
with a personal 20% discount.
Grab the best paper

Related Essays

Technology as a strategic factor which helps in the development or dismissal of subsequent firms
Depending on the attributes of the technological concept in use they are divided into either sustainable or disruptive forms. Those technological concepts which help in the development of existing business processes and thereby augments the quality of products or services are mainly sustainable in nature
10 pages (2500 words) Essay
The theoretical rationale for the NPV approach to investment appraisal
Explain the theoretical rationale for the NPV approach to investment appraisal and compare the strengths and weaknesses of the NPV approach to two other commonly used approaches. Net Present Value Method The Net Present Value (NPV) is defined as “the present value of a project’s cash inflows minus the present value of its costs” (Brigham & Ehrhardt, 2010, p.
10 pages (2500 words) Essay
Positive Accounting Theory
Accounting Theory Introduction Positive Accounting Theory Political Cost Hypothesis Small Businesses Role of Banks in Development of Small Businesses Federal Governments and Small Businesses Conclusion Accounting Theory \Introduction The theory of Positive Accounting seeks to make relevant accounting transactions based on the predictions of real world situations and occurrences.
5 pages (1250 words) Research Paper
Why Caledonia Has to Adopt Free Cash Flows Approach and not Accounting Profit Approach?
Cash flows are the finances a corporation acquires from its daily sales and spends it in the operations of the business at that particular period. It is the liquidity position of the company and does not constitute for sales credit (Mulford & Comiskey, 2005).
8 pages (2000 words) Math Problem
The provided an assessment standard setting approaches used in accounting including the free market approach, regulator; thereby, illustrated the applications for such approaches. The study employed literature materials to present systematic and clear understandings of accounting standard setting in relation to financial accounting standards.
8 pages (2000 words) Assignment
Normative approach and positive approach
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.
8 pages (2000 words) Essay
Universal Accounting Approach &Cross Border Investment
Finance and Accounting The need of accounting standards evolved because auditors and financial analyst were generally confronted with problems of accounting like misinterpretation, biasness, ambiguity and inaccuracy. To reduce these kinds of accounting errors, a set of accounting standards was developed, which was universally recognized.
6 pages (1500 words) Essay
Theoretical concepts of accounting
Accounting Theory This report presents a review and discussion related to the different theoretical concepts of accounting in the practical world. The areas discussed in the report include arguments related to the free market perspective with respect to the regulation of accounting and their validity after the recent financial crisis, difference between the assumptions underlying the capital market research and behavioural research and main criticisms of Positive Accounting Theory.
4 pages (1000 words) Essay
Financial Accounting and Report
This technique is known as the Ratio Analysis. In this method, experts calculate some important ratios from the financial statements of the company the performance of which is to be checked (Bragg, 2012, p.
6 pages (1500 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email