A Normative Theory

question 9

Multiple Choice

A normative theory:

• A)Is based on what should be the case given a certain objective.
• B)Is completely divorced from reality.
• C)Describes,explains or predicts activities.
• D)Only focuses on normal activities.

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Definitions:

Investing Activity

Financial operations related to acquiring or disposing of non-current assets, crucial for budgeting and strategic planning of an organization's capital.

Financing Activity

Transactions related to raising capital and repaying investors, including issuing stock, paying dividends, and borrowing funds.

Net Income

A company's overall earnings following the deduction of all costs and taxes from its gross income.

Fiscal Year

A twelve-month period used for accounting purposes and preparation of financial statements, which may not align with the calendar year.