Accounting is an integral part of a business. It consists of accounting principles, standards and concepts that help us understand the basics of accounting. They also bring uniformity and consistency to the financial statements. The theory of accounting revolves around strategies, assumptions, procedures, and frameworks associated with the study of financial reporting and implementations of financial reporting principles in the accounting industry. The theory of accounting acts as the basis for comprehending financial transactions, reporting, and channelization of financial statements of companies using the best-suited strategies. Theory base of accounting concepts are fundamentally the basic ideas holding the theory base of accounting and therefore, can be regarded as general working practices for all accounting activities. These concepts are: Business entity concept, money measurement concept, going concern concept, accounting period concept and cost concept.

Saket Kumar

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