Accounting can be regarded as the mathematical science entrusted with the task of observing the financial information; collecting of the financial information; classifying and recording of the financial information under the various hands; summarizing and compiling the financial information in the financial statements in such a way that it can communicate effectively and efficiently the information so collected to the various interested parties; who can later on, can use and draw inferences out of the information provided. Like every subject or language it has its own coherent set of concepts and principles that constitute its theoretical framework based on logic and traditions which helps in, evaluating and explaining existing practices, and also serves as a guide for the development of new practices and procedures. The main objective of this paper is to understand and analyze the available literature about accounting theory and to understand how it has been studied and evaluated by different professionals who have worked on it. This paper also concentrates on understanding the concept and importance of accounting theory and its practices.

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Keywords: Accounting Theory, Accounting Concept, Theoretical Framework, Financial Information.