Question

Different b/positive approach normative approach in accounting

Answer 1

Answer:

There is a slight difference between positive and normative approach

Explanation:

positive accounting theory is concerned with explaining and predicting current accounting practices. This mean that the focus is on understanding and explaining the techniques and methods that accountants currently use and why we have ended up with the conventional historical cost accounting system.

This approach can be compared with the normative accounting theory that dismiss conventional historical cost accounting as being meaningless or not decision useful and prescribe the use of more useful systems of accounting based on inflation adjustments.

Logically normative is more of a deductive process than positive accounting theory. Normative starts with the theory to deduces to special policies, while positive starts with specific policies, and generalizes to the higher level principles.