Question

. Of the following which is limitation of accounting
1 point
Accounting facilitates Information about business
Accounting facilitates comparative study
Accounting ignores qualitative elements.
Accounting facilitates sale of business​

Answer 1

Answer:

Accounting ignores qualitative elements.

Explanation:

Following are the limitations of accounting:

Accounting is not precise: Accounting is not completely free from personal bias or judgment.

Accounting is done on historic values of assets: Accounting records assets at their historical cost less depreciation. It does not reflect their current market value.

Ignore the effect of price level changes: Accounting statements are prepared at historical cost. So changes in the value of money are ignored.

Ignore the qualitative information: Accounting records only monetary transactions. It ignores the qualitative aspects.

Affected by window dressing: Window dressing means manipulation in accounting to present a more favourable position of the business than the actual position.