Mention two limitations of accounting.
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Explanation:
The main limitations of accountancy and financial statements fall into the following categories:
Accounting policies.
Estimates.
Professional judgement.
Verifiability.
Using historical costing.
Measurability.
Predictive value.
Fraud & Errors.
One of the biggest limitations of accounting is that it cannot measure things/events that do not have a monetary value. If a certain factor, no matter how important, cannot be expressed in money it finds no place in accounting.
Answered by
1
Answer:
Accounting policies.
Estimates.
Professional judgement.
Verifiability.
Using historical costing.
Measurability.
Predictive value.
Fraud & Errors.
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