Accounting has been one of the most important aspect in running a business in today’s economic and social system. It is used to support decision making in various aspect of life. To be able to apply accounting properly, it is important to understand the basic of accounting and its theories. The position of accounting fundamentals is very important in education and business, where learning or training activities will work well if it is started from a good fundamental understanding as well. This paper is written to help giving general understanding on the fundamentals of accounting. By using theoretical review approach, explanations are given thoroughly for reader’s understanding. From the discussion, it can be concluded that theories helps accountant to have consistent standards and determination of attitudes, functions and limitations of financial accounting and financial reporting. Though there are different kind of perspective in each theory, it is important to note that by applying the theories, accounting can be done reliably.