The document provides an overview of several normative theories of accounting: - Conventional accounting focuses on the stewardship function of managers reporting to absentee owners. - Normative theories seek to guide appropriate accounting policies for different circumstances and may propose alternative approaches to current practice. - Historical cost accounting values assets at their original transaction price but provides an objective record and is easily understood. However, it ignores changing prices. - Current cost accounting values assets at their current replacement cost to show maintenance of physical capital. But it introduces subjectivity. - Exit price accounting values assets at their expected sale price to reflect an entity's capacity to adapt. But it assumes liquidation rather than ongoing use of assets.