1.financial accounting refers to accounting information that is used by management for decision-making purposes
2.accounting theory includes the basic rules, definitions, and principles that underlie the drafting of accounting standards and how they are derived
3.accounting theory includes conceptual frameworks, accounting legislation, valuation models, and hypotheses and theories
4.hypotheses and theories are based on an informal method of investigation
5.replacement cost as a measure of asset value is generally more reliable than historical cost