Question

what is the limitation of accounting​

Answer 1

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Limitations of Accounting:

1. Recording only monetary terms:

it records only transactions which can be recorded in monetary terms.Qualitative aspects like managerial skill,services of experts ,etc are not recorded.

• Accounting is a post-mortem analysis:

It records events as they have taken place. There is no scope for ascertaining what the appropriate expenditure or cost of acquisition should have been.

• Effect of price level changes are not considered here:

Transactions are always recorded in the books at cost price not at market price.

these are the limitations of Accounting.