Which of the following is not true about Positive Accounting Theory?
A) A positive theory seeks to explain and predict particular phenomena.
B) A positive theory focuses on the relationships between various individuals and how accounting is used to assist in the functioning of these relationships.
C) A positive theory prescribes how a particular practice should be undertaken.
D) All of the given options are correct.

Question

Quizplus · Accepted Answer

Positive Accounting Theory is descriptive in nature and seeks to explain and predict particular phenomena based on empirical evidence. It focuses on how accounting is used to assist in the functioning of relationships between various individuals, such as shareholders, managers, and creditors. However, it does not prescribe how a particular practice should be undertaken, making option C incorrect. Therefore, option D is incorrect as well.

Which of the Following Is Not True About Positive Accounting