The Difference Between a Positive Economic Statement and a Normative

question 15

Multiple Choice

The difference between a positive economic statement and a normative economic statement is that:

• A) a positive statement must be true, while a normative statement is often not true.
• B) a normative statement must be true, while a positive statement is often not true.
• C) a positive statement can be verified, while a normative statement cannot be verified.
• D) a normative statement can be verified, while a positive statement cannot be verified.
• E) a positive economic statement is a moral judgment, while a normative economic statement is not a moral judgment.

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Definitions:

Journalizing

The procedure of logging company transactions in a journal, forming a part of the cycle of accounting.

Debit

An accounting entry showing an increase in assets or expenses or a decrease in equity, liabilities, or revenue.

Credit

An accounting entry that increases liabilities or equity, or decreases assets, reflecting the value of transactions where goods, services, or cash are received.

Cash Account

A financial account that tracks the amount of cash inflows and outflows, representing the company's liquid assets.