Which of These Is Not an Underlying Assumption of Positive

question 29

Multiple Choice

Which of these is not an underlying assumption of positive accounting theory?

• A)Individuals attempt to maximise their own wealth
• B)Accounting numbers play a central role in the distribution of wealth
• C)People are self-interested and rational
• D)Non-financial aspects of individuals' utility functions are important in the distribution of wealth.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, leading to competition based on factors other than price.

Pure Competition

A market structure characterized by an extremely large number of sellers, none of which can significantly influence price or market conditions due to the homogeneity of the product being sold.

Pure Monopoly

A market structure characterized by a single seller selling a unique product in the market. In a pure monopoly, the single seller controls the entire market supply and sets the price.

Demand Schedule

A table or graph showing the quantity of a good or service that consumers are willing and able to purchase at various prices.