![]() It also eliminates “noise” in the process and may even force the decision-maker to set aside preconceived notions. With less than ten meal choices to choose from, you are no longer afflicted with “paralysis by analysis.”Ī conceptual framework gives the decision maker a well-established system for evaluation and decision-making. Once these limitations are made, your choices are pared to a few choices. Second, you don’t want anything deep-fried, and finally, you prefer flour tortillas to corn. The process could be as follows: first, you want something with carne asada (steak). You may face bounded rationality, or “paralysis by analysis.” To make up your mind, you may need to set up a process. Imagine going to a Mexican Restaurant where there is a menu with literally hundreds of choices. ![]() A conceptual framework is like an algorithm you use to make a choice. I chose a framework and tried to use it as instructed, but it wasn’t until many years later that I fully understood the usefulness of a conceptual framework. This article will explain conceptual frameworks, and two accrual accounting principles namely the revenue recognition principle and the matching principle.ĭuring one of my graduate school experiences, I encountered a professor who seemed to be in love with conceptual frameworks. The article addressed cash accounting and hinted at its shortfalls which were rectified by accrual accounting. My last Cornhusker Economics article, Accounting Assumptions and the Farm Businessset the foundation for a specific evaluation of the conceptual framework accrual accounting offers the farm or ranch manager. ![]()
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