I find that many individuals aren’t accounting literate! At Commerce Papers I strive to make accounting easy and make everyone accounting literate, so that they can achieve their professional and personal goals.
Accounting Theory Accounting theory is set of hypothetical, conceptual and pragmatic principles forming a general frame of reference for enquiring into the nature of accounting. It will be seen that accounting theory has been defined as a coherent set of logical principles that provides for:- Conceptual framework;
- Better understanding of present accounting practice;
- Evaluation of existing accounting practices; and
- Guideline for future development and research
- Accounting theory is that branch of accounting which consists of the systematic statement of principles and methodology, as distinct from practice. Moreover, it refers to a generally accepted logical explanation of Accounting Practices. It is that branch of Accountancy which develops and inculcates a set of logical principles for the evaluation and development of effective accounting practices.
Theory is defined as a group of related generalizations that indicate new observations, which can be empirically tested for the purpose and practice is the use of knowledge for the purpose of accomplishing work. These two concepts can be complementary, but can at times seem at odds. There is strong debate in the literature about whether focus on theory strengthens application or weakens it (or vice versa); scholars have many divided opinions. Theories provide methods for describing relationships and can be used to predict outcomes or behaviors and problem. Problem-solving and goal attainment are often the aims of practice, which is concerned with accomplishing work. Thus, theories can act as knowledge-based tools for performing work.