Which of the Following Is a Normative Statement

question 116

Multiple Choice

Which of the following is a normative statement?

• A)Next year's inflation rate will be under 4 percent.
• B)Consumers will buy more gasoline over the December holiday period than they bought during the summer holiday period even if the price of gas is 10 cents a litre higher than it was during the summer.
• C)Government cuts in welfare spending impose an unfair hardship on the poor.
• D)A wheat shortage or surplus is always the result of federal government policies.
• E)Hurricane Irene caused more damage in the United States than Hurricane Katrina.

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Definitions:

One-Year Period

A timeframe of twelve consecutive months used for financial reporting, planning, and assessment purposes.

Accrual Basis

An accounting method where revenues are recorded when earned and expenses are recorded when incurred, regardless of when cash is exchanged.

Recognizes Revenues

The process of recording revenue in the financial statements when it is earned and realizable, in accordance with the revenue recognition principle.

Expense Recognition Principle

Accounting principle that dictates expenses should be recognized in the period in which they are incurred to generate revenues.