Ch01
Student: ___________________________________________________________________________
1. Which of the following is true about theories in general?
A. Theories can include any coherent set of ideas or statements to explain, or provide guidance in respect
of, certain phenomena
B. Theories must be empirically based to describe what is, rather than what should be
C. Theories must be based on inductive reasoning to provide a generalisation or
prediction
D. All of the given options are
correct
2. According to Thouless (1974), the ‘tricks’ some writers often use to distract readers from limitations in
the logic of an argument or theory are:
A. Using emotionally-toned
words
B. Evasion of a sound refutation of an argument by use of a sophisticated formula
C. Changing the meaning of a term during the course of an
argument
D. All of the given options are
correct
3. Normative accounting theories and research seek to:
A. Explain and predict particular phenomena based on
observation
B. Prescribe particular approaches not driven by existing
practices
C. Describe what is normal, or generally accepted,
practice
D. All of the given options are
correct
4. A theory that predicts that, if certain conditions are met then particular accounting practices will be
observed, is an example of .
A. Positive accounting
theory
B. Negative accounting
theory
C. Normative accounting
theory
D. Descriptive accounting
theory
5. Which of the following is not assumed in Positive Accounting Theory?
A. Individuals (including managers) are economically rational in their
behaviour
B. Individuals (including managers) are primarily motivated by self-
interest
C. The natural objective of managers is to maximise the wealth of the firm
D. Managers are not indifferent in selecting accounting methods to use
,6. A theory (or model) that states that the most useful information for economic decision making is the
current cash equivalents, as measured by the current net market values, is:
A. Current Price
Accounting
B. Continuously Contemporary Accounting
theory
C. Current Cost Accounting
theory
D. Replacement Value Accounting
theory
7. A criticism of Positive Accounting Theory is that it tells us nothing about:
A. Whether the practice or method being used is the most
efficient
B. Whether the practice or method being used is the most
equitable
C. Which method a firm should
use
D. All of the given options are
correct
8. Which of the following is not an example of a normative accounting theory or research?
A. Conceptual frameworks of
accounting
B. Critical perspectives of accounting
practice
C. Capital markets based (security price)
research
D. True income
theories
9. In evaluating theories of accounting, which of the following is not true?
A. Different theories are often the result of working in different paradigms, which provide greatly
different perspectives
B. Positive accounting theory is an example of a theory that is value free
C. Selecting a theory, topic, design or method for research, is based on value
judgements
D All theories of accounting, and assumptions on which they are based, are abstractions of reality, and so
. choice is based on how closely the theory fits our own perceptions
10. Which of the following statements is true about proving a theory?
A. An accepted positive accounting theory purports to provide sound predictions the majority of the time
B. An accepted positive accounting theory that purports to explain and predict, must hold true in all cases
C. Positive accounting theories do not need to be tested or
proven
D. Accepted positive accounting theories have no 'exceptions to the rule'
11. Which of the following statements aligns with the view of Falsificationists, such as Popper and others?
A. Hypotheses are proposed by guessing, without guidance from existing
theories
B. It is possible to state that a theory is
true
C. Hypotheses must be stated in a form that assumes they are true, until evidence that is not supportive
rejects them
D. All theories are false until they are proved to be true
,12. Which of the following statements best explains the role of logic in a theoretical argument?
A. As long as the premises of an argument follow logically from one to the other, the conclusion will be
correct
B. A conclusion can only be true to the extent that we accept that the premises on which it is based are
true
C. Arguments cannot be rejected on the basis of observation; only on whether they are logical or not
D.All theories and their arguments must correspond with actual observation of current practices, or real-
world phenomena, to be logical
13. The failure of a particular study to support a theory:
A. Provides the basis for rejecting the theory as useless or
insignificant
B. Means that the particular study must have flaws in its design or execution in specifying and collecting
the data
C. Threatens the theory, if repeated or more refined studies fail to support it with empirical
evidence
D. Means that the hypothesis was too broad, and did not specify the particular circumstances and
conditions in enough detail
14. Which of the following statements are correct about generalising the findings of a study to the general
population, based on particular samples?
A. It is not possible to make generalisations unless you study the entire
population
B. It is possible to make generalisations as long as the sample is representative of the
population
C. It is possible to make generalisations as long as the sample includes at least 50% of the
population
D. It is possible to make generalisations if the sample is representative, and its size allows statistical
inferences to be made
15. In evaluating various research studies, it is important to first consider:
A. The logic of the argument and how it is
tested
B. The logic of the argument and the assumptions on which it is based
C. The purpose of the study, and the type of theory on which it is based
D. Whether the data collected represents a valid measure of the theoretical variables in
question
16. Theories and models in the social sciences differ from theories in the pure sciences because:
A. Theories about human behaviour cannot be expected to apply all the time, like some natural science
theories
B. A number of theories may be available to describe, or provide a different perspective on, a particular
phenomenon
C. Not all theories in social science have predictions that can be tested
D. All of the given options are
correct
17. The sequential stages of inductive reasoning are:
A. Principles, objectives, assumptions and practice
B. Practice, principles, assumptions and objectives
C. Objectives, assumptions, principles and
definitions
D. Assumptions, objectives, principles and definitions
, 18. Which of the following terms describes a relationship that is argued from the specific (or particular) to the
general?
A. Scientific
reasoning
B. Inductive
reasoning
C. Deductive
reasoning
D. Logical
reasoning
19. Which of the following is an example of a dominant paradigm in accounting prior to 1960?
A. Current cost
accounting
B. Conceptual framework of
accounting
C. Historical cost
accounting
D. Continuously contemporary
accounting
20. What is a deductive theory or argument judged by?
A. Logic and
assumptions
B. Observable real-world
phenomena
C. Empirical evidence of relevant data to test the
theory
D. All of the given options are
correct
21. An Inductive theory or argument:
A. Relies on observation of real-world
phenomena
B. Establishes its truth or falsity by collecting objective empirical
evidence
C. Argues from the specific to form
generalisations
D. All of the given options are
correct
22. Which of the following is not a description of a paradigm?
A. It is a model for the formulation and resolution of research problems
B. It is a school of thought or a principle by which a group of researchers operate
C. It is a collection of unrelated theories
D. It offers a systematic approach to raise questions and to frame answers
23. The sequential stages of deductive reasoning are:
A. Principles, objectives, assumptions and practice
B. Practice, principles, assumptions and objectives
C. Objectives, assumptions, principles and definitions
D. Assumptions, objectives, principles and definitions
Student: ___________________________________________________________________________
1. Which of the following is true about theories in general?
A. Theories can include any coherent set of ideas or statements to explain, or provide guidance in respect
of, certain phenomena
B. Theories must be empirically based to describe what is, rather than what should be
C. Theories must be based on inductive reasoning to provide a generalisation or
prediction
D. All of the given options are
correct
2. According to Thouless (1974), the ‘tricks’ some writers often use to distract readers from limitations in
the logic of an argument or theory are:
A. Using emotionally-toned
words
B. Evasion of a sound refutation of an argument by use of a sophisticated formula
C. Changing the meaning of a term during the course of an
argument
D. All of the given options are
correct
3. Normative accounting theories and research seek to:
A. Explain and predict particular phenomena based on
observation
B. Prescribe particular approaches not driven by existing
practices
C. Describe what is normal, or generally accepted,
practice
D. All of the given options are
correct
4. A theory that predicts that, if certain conditions are met then particular accounting practices will be
observed, is an example of .
A. Positive accounting
theory
B. Negative accounting
theory
C. Normative accounting
theory
D. Descriptive accounting
theory
5. Which of the following is not assumed in Positive Accounting Theory?
A. Individuals (including managers) are economically rational in their
behaviour
B. Individuals (including managers) are primarily motivated by self-
interest
C. The natural objective of managers is to maximise the wealth of the firm
D. Managers are not indifferent in selecting accounting methods to use
,6. A theory (or model) that states that the most useful information for economic decision making is the
current cash equivalents, as measured by the current net market values, is:
A. Current Price
Accounting
B. Continuously Contemporary Accounting
theory
C. Current Cost Accounting
theory
D. Replacement Value Accounting
theory
7. A criticism of Positive Accounting Theory is that it tells us nothing about:
A. Whether the practice or method being used is the most
efficient
B. Whether the practice or method being used is the most
equitable
C. Which method a firm should
use
D. All of the given options are
correct
8. Which of the following is not an example of a normative accounting theory or research?
A. Conceptual frameworks of
accounting
B. Critical perspectives of accounting
practice
C. Capital markets based (security price)
research
D. True income
theories
9. In evaluating theories of accounting, which of the following is not true?
A. Different theories are often the result of working in different paradigms, which provide greatly
different perspectives
B. Positive accounting theory is an example of a theory that is value free
C. Selecting a theory, topic, design or method for research, is based on value
judgements
D All theories of accounting, and assumptions on which they are based, are abstractions of reality, and so
. choice is based on how closely the theory fits our own perceptions
10. Which of the following statements is true about proving a theory?
A. An accepted positive accounting theory purports to provide sound predictions the majority of the time
B. An accepted positive accounting theory that purports to explain and predict, must hold true in all cases
C. Positive accounting theories do not need to be tested or
proven
D. Accepted positive accounting theories have no 'exceptions to the rule'
11. Which of the following statements aligns with the view of Falsificationists, such as Popper and others?
A. Hypotheses are proposed by guessing, without guidance from existing
theories
B. It is possible to state that a theory is
true
C. Hypotheses must be stated in a form that assumes they are true, until evidence that is not supportive
rejects them
D. All theories are false until they are proved to be true
,12. Which of the following statements best explains the role of logic in a theoretical argument?
A. As long as the premises of an argument follow logically from one to the other, the conclusion will be
correct
B. A conclusion can only be true to the extent that we accept that the premises on which it is based are
true
C. Arguments cannot be rejected on the basis of observation; only on whether they are logical or not
D.All theories and their arguments must correspond with actual observation of current practices, or real-
world phenomena, to be logical
13. The failure of a particular study to support a theory:
A. Provides the basis for rejecting the theory as useless or
insignificant
B. Means that the particular study must have flaws in its design or execution in specifying and collecting
the data
C. Threatens the theory, if repeated or more refined studies fail to support it with empirical
evidence
D. Means that the hypothesis was too broad, and did not specify the particular circumstances and
conditions in enough detail
14. Which of the following statements are correct about generalising the findings of a study to the general
population, based on particular samples?
A. It is not possible to make generalisations unless you study the entire
population
B. It is possible to make generalisations as long as the sample is representative of the
population
C. It is possible to make generalisations as long as the sample includes at least 50% of the
population
D. It is possible to make generalisations if the sample is representative, and its size allows statistical
inferences to be made
15. In evaluating various research studies, it is important to first consider:
A. The logic of the argument and how it is
tested
B. The logic of the argument and the assumptions on which it is based
C. The purpose of the study, and the type of theory on which it is based
D. Whether the data collected represents a valid measure of the theoretical variables in
question
16. Theories and models in the social sciences differ from theories in the pure sciences because:
A. Theories about human behaviour cannot be expected to apply all the time, like some natural science
theories
B. A number of theories may be available to describe, or provide a different perspective on, a particular
phenomenon
C. Not all theories in social science have predictions that can be tested
D. All of the given options are
correct
17. The sequential stages of inductive reasoning are:
A. Principles, objectives, assumptions and practice
B. Practice, principles, assumptions and objectives
C. Objectives, assumptions, principles and
definitions
D. Assumptions, objectives, principles and definitions
, 18. Which of the following terms describes a relationship that is argued from the specific (or particular) to the
general?
A. Scientific
reasoning
B. Inductive
reasoning
C. Deductive
reasoning
D. Logical
reasoning
19. Which of the following is an example of a dominant paradigm in accounting prior to 1960?
A. Current cost
accounting
B. Conceptual framework of
accounting
C. Historical cost
accounting
D. Continuously contemporary
accounting
20. What is a deductive theory or argument judged by?
A. Logic and
assumptions
B. Observable real-world
phenomena
C. Empirical evidence of relevant data to test the
theory
D. All of the given options are
correct
21. An Inductive theory or argument:
A. Relies on observation of real-world
phenomena
B. Establishes its truth or falsity by collecting objective empirical
evidence
C. Argues from the specific to form
generalisations
D. All of the given options are
correct
22. Which of the following is not a description of a paradigm?
A. It is a model for the formulation and resolution of research problems
B. It is a school of thought or a principle by which a group of researchers operate
C. It is a collection of unrelated theories
D. It offers a systematic approach to raise questions and to frame answers
23. The sequential stages of deductive reasoning are:
A. Principles, objectives, assumptions and practice
B. Practice, principles, assumptions and objectives
C. Objectives, assumptions, principles and definitions
D. Assumptions, objectives, principles and definitions
