Which of the Following Statements Is a Normative Statement

question 105

Multiple Choice

Which of the following statements is a normative statement?

• A) Every American household should have health care insurance coverage.
• B) Military spending as a percent of government spending decreased by 5 percent in the 1990s.
• C) Welfare reform has decreased the amount the government spends on welfare.
• D) The price of computers fell last year.
• E) Fewer people are unemployed this year than last year.

Comprehend and describe the conceptual framework underlying financial reporting.

Recognize how materiality and faithful representation impact financial reporting and decision making.

Distinguish between current and non-current classifications for assets and liabilities.

Explain the depreciation of property, plant, and equipment and the valuation of intangible assets.

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return. Present value considers the time value of money.

Discounted Future

Refers to the process of estimating the present value of an expected future cash flow by applying a discount rate to account for the time value of money.

Australian Accounting Standards

Rules and guidelines set by the Australian Accounting Standards Board (AASB) that govern how financial reporting is conducted in Australia.

IASB

Stands for International Accounting Standards Board, responsible for developing International Financial Reporting Standards (IFRS).