What is the difference between positive and normative accounting theories?

• A.Positive accounting theory explains what should occur.
• B.Normative accounting theory predicts what is expected to occur rather than explaining what should occur.
• C.Normative accounting theory specifies the prediction rules for items.
• D.Normative accounting theory explains what should occur instead of predicting what is expected to occur.

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Generally accepted accounting practice recognises revenue when

• A.cash is received for the goods.
• B.customers order goods.
• C.goods are dispatched to the customer.
• D.goods are produced.

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Which one of the following would be included in a statement of financial position?

• A.retained earnings
• B.cost of sales
• C.proceeds from long term borrowings
• D.finance costs

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Financial managers will benefit in a strongly efficient market by

• A.having their shareholders be tolerant of low profits if higher profits are expected in the future.
• B.being able to decide what information needs to be made available to shareholders.
• C.being able to take more risks without shareholders' consent.
• D.having their shareholders invest more money into expanding the company's operations.

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Which one of the following is an objective of the International Federation of Accountants (IFAC)?

• A.to issue new international financial reporting standards (IFRS)
• B.to provide advice on accounting standards to the OECD
• C.to provide direction to the Financial Accounting Standards Board (FASB)
• D.to establish high quality professional standards in accountancy

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