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normative approach and positive approach - Essay Example
Finance & Accounting
Pages 8 (2008 words)
Since 15th century accounting is having its existence in the business world. Among various source of income, business needs to maintain everyday transactions, this are known as accounting methods…
Among various source of income, business needs to maintain everyday transactions, this are known as accounting methods. Accounting theory can be defined as the study, which helps to examine the methodologies of the assumptions, with their frame work in financial accounting principles. By the study on accounting theory helps to understand the review the historical foundations of the accounting practises and the way by which the verification on accounting practises is made and report to the relating regulatory framework which governs the financial statement and also the financial reporting (Evans, 2009, p.67). We also can say that a set of concepts which are interrelated, or descriptions or intensions which help to create a reasonable analysis on the incidents by identifying the relations among the variables that can be described as accounting theory. There is no single proper theory in financial accounting which may govern the process of accounting accurately (Belkaoui, 2004 p.125). There are differences in approaches, opinions, and values in accounting practise. In the year 2005 Deegan and Unerman stated that to understand the accounting theory a proper methodology is needed to justify the process (Most, 1977, p.56). Nowadays both economics as well as businesses are continuously evolving. Accounting theory is also changing with business and economy. ...
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