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January 06 , 2011

Positive Accounting Theory and Policy Selection


Many accounting practices and procedures have their foundation in positive accounting theory. This essay-length study guide explains the major tenets of positive accounting theory in simple to understand language, and then explains how it influences accounting policy selection. Subjects covered in the discussion include positive and normative accounting theories, as well as ex post and ex ante procedures. Examples using intangible assets and financial instruments show how it all works.

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