answer this question accounts
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Accounting is the systematic way of identifying, measuring, classifying, summarizing, interpreting and communicating the financial information of an entity.
Limitations of accounting:
1) Uses historical values instead of present values which are more reliable.
2) Accounting has certain number of assumptions due to which it is challenging to compare the performance of two entities.
3) Management has responsibility to prepare accounts which may lead window dressing under high pressure on management. Sometimes, it has lead to fraud by management also.
4) It does not provide information about the cost incurred in producing finished in an accounting year.
5) Inflation is not considered while making decisions regarding future viability.
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