Question

Q10. Explain limitations of Accounting?​

Answer 1

Answer:

Practical Limitations of Accounting Principles :

#Recording only monetary items.

#Time value of money.

#Recommendation of alternative methods.

#Restrain of accounting principles.

#Recording of past events.

#Allocation of the problem.

#Maintaining secrecy.

#The tendency for secret reserves.

Answer 2

Answer:

Accounting often uses historical costs to measure the values. This fails to take into consideration factors such as inflation, price changes, etc. This skews the relevance of such accounting records and information. This is one of the major limitations of accounting.

Hope this is helpful.