Question

what is accounting? what are its limitations.​

Answer 1

Limitations of Accounting

Limitations of AccountingThere are some misconceptions about accounting. Like the fact that a Profit & Loss Statement shows the true profit or loss earned in a year, or that a balance sheet perfectly depicts the financial position of a firm.

Limitations of AccountingThere are some misconceptions about accounting. Like the fact that a Profit & Loss Statement shows the true profit or loss earned in a year, or that a balance sheet perfectly depicts the financial position of a firm.Whereas the truth is that accounting is not a perfect science or art or language yet. It has been evolving for so many years and continues to evolve. The limitations of accounting must be studied to understand it better

Answer 2

Explanation:

Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations.

LIMITATIONS:

Accounting is not fully exact: Accounting is influenced by the personal judgment in respect of various terms.People are bound to have different ideas and the estimates will naturally differ from person to person. Thus this will lead to the different amount of profit shown by a different person.Thus the profit cannot be treated as exact.