Question

What are the demerits of accounting.?

Answer 1

Answer:

Expresses Accounting information in terms of money.

Accounting information is based on estimates.

Accounting information may be biased.

Recording of Fixed assets at the original cost.

Manipulation of Accounts.

Money as a measurement unit changes in value.

Answer 2

ANSWER

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The Demerits of accounting are as follows :-

1.Not Fully exact :-

Business transactions are recorded on actual basis.But on many occassions estimates have to be made for calculating profit or loss.some mistakes have been done by some users while entering the information.

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2.Incomplete Picture :-

In accounting only those transactions are recorded which can be expressedin money. Non monetary transactions such as quality of goods, labour relation,loyality of staff and others.

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3.Ignoring Changing Value of money :-

The purchasing power of money keeps on changing due to inflation or deflation. But accounts are prepared on the assumption that the value of money is stable.As a result,the quality of accounting information suffers.

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