Question

What is Financial Statements? State the utilities and limitations of Financial Statements.

Answer 1

The following are all limitations of financial statements: Dependence on historical costs. Transactions are initially recorded at their cost. This is a concern when reviewing the balance sheet, where the values of assets and liabilities may change over time.

Answer 2

Answer:

The following are all limitations of financial statements: Dependence on historical costs. Transactions are initially recorded at their cost. This is a concern when reviewing the balance sheet, where the values of assets and liabilities may change over time.