theory can be described simply as the logical reasoning underlying the statement of a belief. whether the theory is accepted depends on:Howe well it explains and predicts realityhow well it is constructed both theoretically and empiricallyhow acceptable are the implications of the theory to a body of scientists, professionals and society as a wholeIt is important to understand that accounting theory is not simply an abstract processIt is not divorced from reality. in fact, its main objectives are to explain why and how current accounting practice evolved, to suggest improvements, and to provide the basis for developments in such practice
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