Please answer this question in details thanks 2. Normative Accounting Theories "When it comes...
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2. Normative Accounting Theories "When it comes to apportioning blame for Carillion's dramatic demise, fingers are being pointed in all directions. But most are missing the real culprit: faulty accounts appear to have allowed Carillion to overstate profits and capital, thereby permitting them to load up on debt while paying out cash dividends and bonuses. Prudent accounts are a fundamental pillar of the UK's capital maintenance regime: profits and capital may not be overstated. It is also illegal under company law to pay dividends out of capital."1 Required: Discuss the appropriateness of the Historic Cost model for accounting in the light of the recent corporate failure of Carillion. Explain whether you think capital maintenance problems would be resolved by turning to the following alternative accounting models: Current Purchasing Power (CPP) Current Cost Accounting (CCA) Exit Price Accounting (CoCoA) (Total 20 marks)
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