Question

limition of accounting​

Answer 1

Answer:

These limitations are stated below;

1. Recording only monetary items.
2. Time Value of Money.
3. Recommendation of alternative methods.
4. Restrain of Accounting Principles.
5. Recording of past events.
6. Allocation of problem.
7. Maintaining secrecy.
8. The tendency for secret reserves

Answer 2

Answer:

Some of the limitations of accounting are as follows:

1. Historical in Nature:

Accounting is historical in nature and reflects the past position of business organization.

2. Records Only Monetary Transactions:

Accounting provides only incomplete information as accounting records only those transactions which can be expressed and measured in terms of money. For example, ineffective control prevailing in the organization, inefficient employees, market conditions, change of government policies etc.

3. Price Level Changes:

The accounting statements do not show the effect of price level changes on the value of assets since it is based on historical cost.

4. Window Dressing:

Accounting principles are not static. Information contained in accounting may be manipulated by the accountants.Window Dressing:

5. Personal Biasedness:

In some cases, some events are measured on the basis of some estimates.

6. Real Value not Known:

Accounting is based on various generally accepted accounting principles.