give five disadvantage of accounting
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Disadvantages of Financial Accounting
Accounting is not fully exact: Accounting is influenced by the personal judgment in respect of various terms.People are bound to have different ideas and the estimates will naturally differ from person to person.Thus this will lead to the different amount of profit shown by a different person.Thus the profit cannot be treated as exact.
Accounting does not indicate the releasable value: The balance sheet does not show the amount of cash which the firm may realize by the sale of all assets.
Accounting ignores qualitative elements: Since accounting is confined to monetary matters only qualitative elements like a quality of management and labor force industrial relations and public relations are ignored.
Accounting ignores the effect of price level change: Accounting statement is prepared at historical cost.Money as measurement unit change in value. It does not remain stable.The financial statement does not show the effect of the change in price level.The assets remain to undervalue in many case particular land and building So while preparing financial statement accounting information will not show the true result.
Accounting may lead to window dressing: The term window dressing means manipulation of accounts in a way so as to conceal vital facts and present the financial statement in a way to show better position than what it is actually.In this solution, income statement fails to provide a true and fair view of the result of the operation and the balance sheet fails to provide a true and fair view of the financial position of the enterprise.
i hope it helps.
Accounting is not fully exact: Accounting is influenced by the personal judgment in respect of various terms.People are bound to have different ideas and the estimates will naturally differ from person to person.Thus this will lead to the different amount of profit shown by a different person.Thus the profit cannot be treated as exact.
Accounting does not indicate the releasable value: The balance sheet does not show the amount of cash which the firm may realize by the sale of all assets.
Accounting ignores qualitative elements: Since accounting is confined to monetary matters only qualitative elements like a quality of management and labor force industrial relations and public relations are ignored.
Accounting ignores the effect of price level change: Accounting statement is prepared at historical cost.Money as measurement unit change in value. It does not remain stable.The financial statement does not show the effect of the change in price level.The assets remain to undervalue in many case particular land and building So while preparing financial statement accounting information will not show the true result.
Accounting may lead to window dressing: The term window dressing means manipulation of accounts in a way so as to conceal vital facts and present the financial statement in a way to show better position than what it is actually.In this solution, income statement fails to provide a true and fair view of the result of the operation and the balance sheet fails to provide a true and fair view of the financial position of the enterprise.
i hope it helps.
pukka:
such a great answer thank-you so much
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Price - the package cost, although small in relation to your other costs, is higher than a paper-based system.
Implementation - manual accounts are generally easier to set up and can be more flexible than computerised accounting. You will probably need some initial help setting up accounting software. Your accountant or system provider will usually charge you for this service.
Support - you may need to purchase yearly maintenance and support for your package.
Specialised needs - an accounts package will typically suit most types of business. However, specialist businesses may need to refine the package or change their processes to use accounting software successfully.
Implementation - manual accounts are generally easier to set up and can be more flexible than computerised accounting. You will probably need some initial help setting up accounting software. Your accountant or system provider will usually charge you for this service.
Support - you may need to purchase yearly maintenance and support for your package.
Specialised needs - an accounts package will typically suit most types of business. However, specialist businesses may need to refine the package or change their processes to use accounting software successfully.
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