Which of the following hypotheses is testable,and therefore possible to falsify?
A) Assets are designed to best fulfil the function for which they are intended
B) Current replacement cost accounting is more useful than historical cost accounting
C) Research and development expenditure is an expense.
D) The net profit of a company is affected by the economic downturn

Question

Quizplus · Accepted Answer

The hypothesis that the net profit of a company is affected by the economic downturn is testable because it can be compared to data on the company's net profit before, during, and after an economic downturn. A hypothesis is testable if it can be supported or refuted based on empirical evidence.

A) This statement is not a hypothesis but rather a general observation or assumption. It is not possible to test whether assets are designed to best fulfill their intended function because it is subjective and dependent on each individual's interpretation of the function. 
B) This statement is not a hypothesis but rather an opinion. It cannot be tested because it is a matter of preference rather than a statement that can be proven true or false based on objective evidence. 
C) This statement is not a hypothesis but rather a statement of accounting policy. It cannot be tested because it is a matter of opinion and interpretation of accounting standards.

Which of the Following Hypotheses Is Testable,and Therefore Possible to Falsify