Abstract Whether determined from direct observation or from a study of authoritative statements, the present structure of accounting theory assumes an economic entity engaged in economic activities. The central purpose of accounting is to make possible the periodic matching of costs and revenues accomplishments. This concept is the nucleus of accounting theory and a benchmark that affords a fixed point of reference for accounting discussion. In the related area of behavioral relations this present core-function requires, at least in an implicit sense, the assumption that the external parties interested in accounting data are motivated to action primarily by the economic results reflected in the income reported by the business unit. In a similar manner acceptance of the present structure of accounting theory necessitates the corollary assumption that the parties who direct the activities of the business unit also are motivated primarily by the same economic results if for no other reason than the knowledge that their accomplishments will be evaluated in these terms.
Bedford et al. (Sat,) studied this question.