What distinguishes positive accounting theory from normative accounting theory? a) It explains and predicts actual accounting practices rather than prescribing rules b) It only focuses on what should be done c) It deals exclusively with tax accounting d) It ignores actual business practices

Contemporary Auditing
11th Edition
ISBN:9781337650380
Author:KNAPP
Publisher:KNAPP
Chapter1: Comprehensive Cases
Section1.2: Lehman Brothers Holdings, Inc.
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What distinguishes positive accounting theory from
normative accounting theory?
a) It explains and predicts actual accounting practices
rather than prescribing rules
b) It only focuses on what should be done
c) It deals exclusively with tax accounting
d) It ignores actual business practices
Transcribed Image Text:What distinguishes positive accounting theory from normative accounting theory? a) It explains and predicts actual accounting practices rather than prescribing rules b) It only focuses on what should be done c) It deals exclusively with tax accounting d) It ignores actual business practices
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