Writea detailed note on the levels of accounting theory
Answers
The study of accounting theory involves a review of both the historical foundations of accounting practices, as well as the way in which accounting practices are changed and added to the regulatory framework that governs financial statements and financial reporting.
Accounting Theory Construction. ... The descriptive pragmatic approach to accounting theory construction is an inductive approach – it is based on continual observation of the behavior of accountants in order to copy their accounting procedures and principles.
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Accounting theory may also be used to explain existing practices to obtain a better understanding of them. But the most important goal of accounting theory should be to provide a coherent set of logical principles that form the general frame of reference for the evaluation and development of sound accounting practices.