Question

Explain the importance and limitations of accounting​

Answer 1

Answer:

it's very important. If you want to earn money you should choose it

Answer 2

Advantages of Accounting:

• Accounting helps to maintain the business records in a systematic manner.
• It helps in the preparation of financial statements.
• Accounting information is also used to compare the result of current year with the previous year to analyze the changes.
• It helps the managers in the decision making process.
• It provides information to other interested parties such as shareholders, creditors, investors, customers, government, employees, regulatory bodies etc.
• It helps in taxation matter
• Accounting information can be produced as evidence in the legal matter.
• It helps in valuation of business.

Limitations of Accounting

• The items expressed in monetary terms are recorded in the accountings where as the items which are nonmonetary nature not recorded.
• Sometimes accounting data are recorded on the basis of estimates and which could be inaccurate.
• Fixed assets are recorded as the original cost.
• Value of money does not remain stable so accounting value does not show true financial results.
• Accounting can be manipulated and biased.