Question

explain the objectives and limitation of accounting

Answer 1

Recording only monetary items.

Time value of money.

Recommendation of alternative methods.

Restrain of accounting principles.

Recording of past events.

Allocation of the problem.

Maintaining secrecy.

The tendency for secret reserves.

Importance of form over substance

Answer 2

Objectives of accounting:
1. Maintaining proper records of business transactions.
2. Ascertaining the profit or losses of the business.
3. Knowing the sources of revenue and the items of expenses.
4. Ascertaining of the financial position of the business.
5. Ascertaining the amount due to the business and the amounts due from the business.
6. Ensuring effective control over the performance of the business...
.....

Limitations of accounting:
1. Does not provide complete information.
2. Do not give exact information.
3. Accounting figures may be manipulated.
4. Does not show the real financial position of the business.
5. Accounting fails to supply the financial information.
6. The business as the assets and liabilities are shown in the balance...
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