Conceptual frameworks provide prescription so they are considered to be:
A) Normative theories of accounting
B) Positive theories of accounting
C) Decision usefulness theory of accounting
D) None of the given options are correct.

Question

Quizplus · Accepted Answer

Conceptual frameworks provide guidance on how accounting should be done, thus they provide a normative theory of accounting. Positive theories, on the other hand, describe and explain the way accounting is actually done in practice. Decision usefulness theory is a specific normative theory that focuses on how financial information can be optimized to aid decision-making. None of the given options include the correct match for conceptual frameworks.

Conceptual Frameworks Provide Prescription So They Are Considered to Be