DEDUCTIVE AND INDUCTIVE APPROACHARES TO FORMULATE ACCOUNTING THEORY
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This document discusses the deductive and inductive approaches to formulating accounting theory. The deductive approach begins with assumptions and objectives and derives accounting principles through logical means. It involves determining objectives, selecting postulates, defining terms, formulating principles, and establishing procedures. The inductive approach examines observations first and derives principles and procedures from the observations through analysis and generalization. It is used to justify existing practices while deductive is used to guide new practices. The conclusion states that both approaches are significant in developing accounting theory, with deductive being used initially and inductive to explain standards.
DEDUCTIVE AND INDUCTIVE APPROACHARES TO FORMULATE ACCOUNTING THEORY
- 1. PRESENTED BY…. Preethi s j Under the guidance of Sundar B. N. Asst. Prof. & Course Co-ordinator GFGCW, PG Studies in Commerce Holenarasipura
- 2. CONTENTS • Approchares to formulate accounting theory Introduction to deductive and inductive approach Deductive approach Meaning Steps Inductive approach Meaning Steps Conclusion Reference
- 3. Approchares to formulate accounting theory Non –theoretical approaches . 1.Pragmatic approach. . 2.Authorization approach Theoretical approaches 1.Deductive approach 2.Inductive approach 3.Ethical approach 4.Sociological approach 5.Economic approach
- 4. Introduction The terms deductive and inductive indicate the type of research methodology or reasoning used in formulating an accounting theory. The main difference between inductive And deductive reasoning is that inductive reasoning Aims at developing a theory while deductive Reasoning aims at testing an existing theory r
- 5. MEANING This approach begins with basic accounting objective( assumption) and proceeds to derived by logical means the accounting principles that serves as guides and bases for the development of accounting techniques
- 6. The deductive approach includes the following steps Determining the objective (general or specific) of financial reporting Selecting the postulates of accounting Developing a set of definitions Formulating principles of accounting Applying the principle of accounting to specific situation Establishing procedures methods and rules
- 7. MEANING The inductive approach to accounting theory examine observation first and accounting and then derives principle and procedures from these observation This approach emphasis on drawing generalized conclusion and principles of accounting for detailed observation and measurement of financial information of business enterprises C
- 8. The inductive approach includes the following steps Making observations and recording of all observations Analysis and classification of these observations Derivation and formulation of generalizations and principles of accounting from the recorded observation Testing of generalization and principles
- 9. Different between Inductive and deductive approach 1. It is used for justifying the existing practice 2. It depends on what accounting do 3. It is followed for derivig descriptive theory 1. It is used for guiding the new accounting practice 2. It depends on what should be done 3. It is followed for derivig normative theory • Inductive approach • Deductive approach
- 10. 1. It is simple and easy fails in the changing scenario 2. Historical cost concept , entity concept etc 1. It is comparatively difficult how ever useful changing scenario 2. Inflotion social responsibility human resource accounting etc
- 11. CONCLUSION This approach while explaining deductive and inductive reasoning , we elaborated on their role in accounting theory ,developed standard and accounting research . the process of developing an accounting theory , the reasoning method is highly significant developing the theory in the first place has a deductive process in social sciences .
- 12. • 1. Introduction to deductive and inductive approach:’(retrieved from http://wwwscribbr.com) date 10/4/2021 . 2.Deductive and inductive approach :’(retrieved from https://www silde share net ) date 10/4/21 3. Deductive and inductive approach:’(retrieved from https://ww.reserchgate.net/publication/294872064) date 10-4-21 .