Which of the Following Statements Is Not True About Positive

question 21

Multiple Choice

Which of the following statements is not true about Positive Accounting Theory?

• A) It is used to distinguish research aimed at explanation and prediction.
• B) It is designed to explain and predict which firms will, and which firms will not, use a particular method, and also prescribes which method a firm should use.
• C) It focuses on the relationships between the various individuals involved in providing resources to an organisation, and how accounting is used to assist in the functioning of these relationships.
• D) One of the key theories that underpins Positive Accounting Theory is Agency theory.

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Definitions:

Average Rate

A mathematical mean or typical value of a set of rates, often used in reference to interest rates, pricing, or other financial statistics.

Market Demand

The total quantity of a product or service that is desired by all potential consumers in a market at various price levels.

Competitive Industry

An industry landscape where multiple firms compete against each other, often leading to innovation and lower prices for consumers.

Competitive Industry

A market sector characterized by many firms competing against each other for customers, leading to innovation and lower prices.