accounting questions

1. Watts and Zimmerman's Positive Accounting Theory is:
A. One of several normative theories of accounting
B. One of several positive theories of accounting
C. One of several critical theories of accounting
D. None of the given options is correct

2. The key theory that underpins Positive Accounting Theory is:
A. The Efficient Markets Hypothesis
B. Agency theory
C. Normative ethical theory
D. None of the given options is correct

3. The principal's expectation of opportunistic behaviour by his or her agent results
in lower payments to:
A. The agent
B. The principal
C. The principal and the agent
D. Neither the principal nor the agent

4. The 'political cost hypothesis' of Positive Accounting Theory suggests that:
A. Large firms are more likely to use accounting choices that reduce reported profits
B. Small firms are more likely to use accounting choices that reduce reported profits
C. Neither large nor small firms are more likely to use accounting choices that reduce
reported profits
D. Both large and small firms are more likely to use accounting choices that reduce
reported profits
5. The 'bonus plan hypothesis' of Positive Accounting Theory suggests managers of
firms with bonus plans tied to reported income are more likely to use accounting
methods that:
A. Increase prior period reported income
B. Increase current period reported income
C. Increase future period reported income
D. None of the given options is correct

6. The 'debt/equity hypothesis' of Positive Accounting Theory predicts that:
A. The higher the firm's debt/equity ratio, the more likely managers are to use
accounting methods that lower income
B. The lower the firm's debt/equity ratio, the more likely managers are to use
accounting methods that increase income
C. The higher the firm's debt/equity ratio, the more likely managers are to use
accounting methods that increase income
D. None of the given options is correct

7. Critical researchers accuse financial accounting of:
A. Being open to manipulation by self-interested managers
B. Reinforcing unequal distributions of wealth and power
C. Being irrelevant to management decision-making

D. Poorly predicting stock prices

8. ‘Social Praxis’ in the context of critical theory means that
A. Theory influences practice
B. Practice influences theory
C. Theory influences practice, while practice influences theory
D. Theory does not influence practice, and practice does not influence theory

9. Critical accounting researchers have criticised other social and
environmental accounting researchers for:
A. Lacking objectivity
B. Being too radical and unrealistic
C. Leaving existing social structures unchallenged
D. Ignoring the findings of empirical accounting research

10. Which theoretical perspectives have been utilised by critical researchers?
A. Marxism
B. Deep ecology
C. Radical feminism
D. All of the given options are correct

11. Broadly speaking, critical researchers have been:
A. Successful in identifying problems in accounting practices, but unsuccessful in
changing practices
B. Successful in exposing problems in accounting practices, and successful in
changing practices
C. Unsuccessful in exposing problems in accounting practices, but successful in
changing practices
D. Unsuccessful in exposing problems in accounting practices, and unsuccessful in
changing practices

12. Critical researchers interpret the Australian accounting bodies' opposition to
mandatory corporate social and environmental reporting as evidence that the
accounting profession:
A. Is legitimately concerned with introducing unnecessary regulation
B. Does not believe mandatory reporting would enhance corporate accountability
C. Does not believe shareholders and the public support mandatory reporting
D. Promotes the interests of business above the interests of other stakeholders

13. Critical researchers believe that accountants are:
A. Complicit in the exploitation of citizens
B. Resistant to the exploitation of citizens
C. Irrelevant to the exploitation of citizens
D. Exploited by citizens

14. Critical researchers believe that regulation of corporations is ineffective
because the government:
A. Is weak and powerless
B. Is deceived by corporations
C. Favours the rich
D. Does not believe that more effective social and environmental legislation is
required