Question

Metion two limitation
accounting
9​

Answer 1

Answer:

9 limitations of accounting are; Recording only monetary items. Time value of money. Recommendation of alternative methods.

Answer 2

ANSWER :

Accounting can be defined as a man made activity carried on for the purpose of recording, summarizing and interpreting the result of the business transactions in systematic and chronological manner in order provide accounting information to its users.

There are some limitations of accounting. The word "limitation" refers to the disadvantage of the system of accounting.

❒ Two limitations of accounting are discussed below :-

• [1] Accounting is influenced by personal judgement : Accounting is considered as an art and a science of recording business transactions in the books of accounts. But it is not an exact science and hence the persons involves in maintaining the accounts are required to exercise their personal judgements in respect of various items where alternative accounting treatments exists. It is a limitation of accounting as personal judgement may varies from person to person.

• [2] There is absence of qualitative information in accounting : Another limitation of accounting is that accounting contains only those informations which can be expressed in terms of money. But there are also some qualitative aspects of the business which is not recorded in the books of accounts as these aspects can not be expressed in monetary terms. Hence there is absense of qualitative information in accounting.