Which of the Following Is Not Assumed in Positive Accounting

question 11

Multiple Choice

Which of the following is not assumed in Positive Accounting Theory?

• A) Individuals (including managers) are economically rational in their behaviour.
• B) Individuals (including managers) are primarily motivated by self-interest.
• C) The natural objective of managers is to maximise the wealth of the firm.
• D) Managers are not indifferent in selecting accounting methods to use.

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Definitions:

Distribution

The process of making a product or service available for use or consumption by a consumer or business user.

Tax Shifting

Occurs when households can alter their behavior and do something to avoid paying a tax.

Avoid Paying

Strategies or actions taken to minimize or evade expenses, taxes, or other financial obligations.

Luxury Tax

A tax imposed on expensive goods and services, often considered non-essential, as a means of raising government revenues without placing the burden on essential items.