Which of the Following Statements Is Correct in Relation to Normative

question 25

Multiple Choice

Which of the following statements is correct in relation to normative theories?

• A) Normative theories often evolve as a result of research performed in relation to positive theories
• B) Facts about current accounting practice are not considered in the development of normative theories
• C) Normative theories are not likely to evolve from the consideration of positive theories
• D) Normative theories always evolve as a consequence or result of positive theories

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Definitions:

Money Supply

The total volume of economic monetary assets, such as cash, coins, and the balances in checking and savings accounts, at a specific period.

Currency

The system of money in general use in a specific country, consisting of banknotes and coins, that is accepted as a medium of exchange.

Overdraft Privileges

A feature offered by banks allowing an account holder to withdraw more money than is currently available in their account, often for a fee.

Fee

A charge for services rendered or for access or admission to facilities or events.