Empirical Research That Attempts to Determine Why Particular Accounting Alternatives

question 56

Multiple Choice

Empirical research that attempts to determine why particular accounting alternatives are selected by management is an example of:

• A)normative research.
• B)deductive research.
• C)positive accounting research.
• D)analytical research.

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Definitions:

Fair Value Adjustment

Fair Value Adjustment refers to an accounting action that adjusts the reported value of an asset or liability to reflect its current market value.

Trading Securities Portfolio

A collection of securities bought and held primarily for sale in the short term to generate income on short-term price differences.

Fair Value

The estimated price at which an asset can be bought or sold in an orderly transaction between market participants at the valuation date.

Unrealized Gain

An increase in the value of an asset that has not been sold, thus not yet generating actual profit.