Discuss the advantages and disadvantages of accounting.
Answers
Advantages & Disadvantages of Accounting Standards. Businesses experience a variety of financial transactions as they work to meet customer demands. These include paying bills, receiving payments or borrowing money. Accountants record these transactions in the financial records.
Advantages of accounting :-
♥ The financial position and performance during and at the end of the accounting period is known .
♥ Helps the management to make business plans , takes decision and exercise control over the affairs .
♥ A systematic and timely recording of transactions obviates the necessity to remember transactions .
♥ Loan is granted by banks and financial institutions on the basis of growth of the business .
♥ It is often accepted as good evidence
in the court .
Disadvantages of accounting :-
♥ Even though most transactions are recorded on the basis of evidence , according isn't fully exact .
♥ Since they are prepared following the accounting concepts , according information may not be realistic .
♥ It ignores qualitative elements like quality or skills of management and staffs .
♥ Money doesn't remain stable , unless price level changes are considered accounting information will not show correct financial results .