If a reporting entity has a choice of either expensing or capitalizing an item of expenditure, and if the entity is subject to a high degree of political scrutiny, then what choice would be predicted by the political cost hypothesis of Positive Accounting Theory? Explain your answer

Q: Explain the difference between conservative and aggressive accounting practices.

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Q: The Question is: True or False & Why?: Comparability across companies will be enhanced since ASC…

A: ASC606 is the new guideline set up by IASB and FASB together to overcome the disparity in revenue…

Q: What is the Machiavellian approach to decision making?

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Explain the political cost hypothesis of Positive Accounting Theory.

A: Positive accounting:   It is referred to as the branch of accounting research that helps to explain…

Q: Considering whether to use historical cost or fair value relates to which of the following…

A: The procedures applied and principles followed by the company to prepare its financial statements…

Q: What is “fair value”? Consider whether it is really helpfulwhen reporting financial results. Give…

A: Fixed assets: These include all the assets that are of tangible nature and have an expected useful…

Q: What are the costs and benefits of management’s use of judgement in financial reporting?

A: Management is the internal part of any organization and thus it plays a very crucial role in making…

Q: State some of the more serious problems encountered in seeking to achieve the ideal measurement of…

A: Net income: The amount which is computed by summing up all the revenues received during a specific…

Q: What are some possible pitfalls of using nonauthoritative sources when doing accounting research

A: Non-authorized Sources:- These are the sources that are not permissible by the government and other…

Q: Which of the following statements about desirable attributes of accounting standards boards is most…

A: Accounting standards boards should not concede to political pressures because then it will not be…

Q: explain how the idea of value creation under stakeholder theory differs from that under positive…

A: Here discuss about the details of the difference between the stakeholders theory with the positive…

Q: From the following statements which one is not the correct classification of accounting theory

A: Accounting theory is the theory which is actually the set of guidelines, principles or in order…

Q: What is Fair Value Accounting? What are the factors contributing toward the trend of fair value…

A: "Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Which of the following is most closely linked to accounting conservatism? Lower-of-cost-or-market…

A: Answer:

Q: How are accounting judgments regarding internally generated intangible influenced by accountants’…

A: Step 1: Accounting judgement is the sharing of the judgements or sharing of knowledge and…

Q: Explain why firms must correctly classify expenditures incurred as either capital expenditure or…

A: Capital expenditure is something which has been incurred on something that will provide benefits for…

Q: Overall do you agree or disagree with the argument that financial statements should be stated as…

A: Historical cost refers to the original purchase cost of an asset whereas fair value is an estimate…

Q: Providing information to internal users for decision making is the purpose of which of the…

A: Internal users are those persons who are inside the company and make direct decisions for the…

Q: In terms of Accounting Theory: Part A - What are the symptoms of a regulatory system being public,…

A: Here discuss about the theories which are involved for public interest theory, regulatory capture…

Q: Which of the following is most closely linked to accounting conservatism? a. Lower-of-cost-or-market…

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Q: Fair value is a more relevant measure to use in Financial Reporting than Historical Cost. Discuss

A: Introduction: Fair value accounting refers to the practice of valuing your company's liabilities and…

Q: What is meant by Not-for-profit accounting?

A: Accounting represents the system of maintaining records of day-to-day business operations of an…

Q: Examine the advantages and disadvantages of interpretative accounting theory

A: Introduction : Interpretive Accounting theory has developed and contributed significantly to our…

Q: With respect to the concept of materiality, which of the following statements is correct?a.…

A: Definition: Materiality: Materiality is the event or amount that influences financial statements on…

Q: Explain why establishing accounting standards is characterized as a politicalprocess

A: The standard setting process is a political process that is affected by the impact of several…

Q: Which of the following regarding GAAP is true?a. GAAP is an abbreviation for generally…

A: GAAP is the combination of accounting standards, accounting principles and procedures a company…

Q: What are the main differences in accounting for profit and not for profit organizations?

A: Profit Organizations: When the main motive or the primary goal of a business is specifically to…

Q: Under this qualitative characteristic, users are assumed to have a reasonable knowledge of business…

A: Accounting is the detailed process of recording, classifying, summarising and analysing accounting…

Q: atcments is not an objective of financial reporting? hat is useful in investment and credit…

A: THE OBJECTIVE OF FINANCIAL REPORTING IS TO TRACK ANALYSE AND REPORT YOUR BUSINESS INCOME . THE…

Q: According to the principle of Conservatism it is defined that when There are many ways to determine…

A: Principle of conservatism is a principle which lets the company to play safely means the income…

Q: Explain what is meant by adverse economic consequences of new or changed accounting standards.

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Q: Consider FASB Concepts Statement No. 8, as amended. What are the conceptual issues underlying…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following pars of items are the two fundamental qualitative characteristics of a useful…

A: Qualitative Characteristics of financial statements are the attributes with which the investors to…

Q: Why does the IASB’s Conceptual Framework consider the relevance and faithful representation to be…

A: Accounting concepts are formulated based on assumptions, rules, guidelines, and principles etc.…

Q: If a particular accounting choice is considered aggressive in nature, then the fi nancialperformance…

A: When a particular accounting choice is considered to be aggressive in nature then it affects the…

Q: Comment on the statement that materiality is in the eye of the beholder. How does this statement…

A: In accounting, materiality relates to the significance of any transaction or accounts. It is one of…

Q: fer from o

A: Revenue should be recognised when it is generated, not when it is received, according to the revenue…

Q: Which function of a financial intermediary reduces transaction and information costs between a…

A: Financial intermediaries help to make deals for their clients. Due to their professional skill set…

Q: In conducting a B/C analysis, (a) why is it usually necessary to take a specific viewpoint in…

A: View point differs from person to person depending upon their costs and benefits from a project. It…

Q: What are organizational costs? What are the reasons for and against capitalizing organizational…

A: The first cost of forming a corporation is referred to as an organisational cost or expense. Legal…