Explain the advantages and disadvantages of accounting ?
Answers
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 .