Understanding Accounting Theory
The
theory is a branch of accounting is accounting that consists of
systematic statement of principles and methodology that distinguishes
the practice. Vernon
kam (1986) considers that accounting theory is a comprehensive system
which includes postulates and theories related to it. He
split the element theory in several elements: basic postulates and
assumptions, definitions, accounting purposes, principles or standards,
and procedures or methods.
Vernon Thurs (1986) put forward the theory of functions of the following kuntansi.
1. Making a handle for accounting standard setting body in setting the standard.
2. Provide the frame of reference to solve accounting problems in the absence of official standards.
3. Preformance demarcate it done judgment in preparing financial statements.
4. Improving the understanding and confidence of the reader reports the information presented financial statements.
5. Improving the quality of reports that can be compared.
While Hendriksen (1982) suggests the usefulness of accounting theory as follows.
1. Provide the frame of reference as a basis for assessing procedures and accounting practices.
2. Provide guidance to the practices and procedures of the new accounting.
3. The properties of accounting theory
Accounting theory has some properties, such as:
a set of principles that are logical, interrelated and form a general framework
closely related to the accounting policy
should cover all the accounting literature that provides a different approach to each other
must
be able to provide a description of accounting practices, answer and
explain all the phenomena underlying the application of a method in
accounting practices.
must be able to explain why the company is more likely to use the LIFO method in assessing dartipada FIFO inventory
should be able to predict or even find an unknown accounting symptom
is very important in preparing and verifying the accounting principles
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