Question

Which of the following is not the limitation of Financial Statements?
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Answer 1

The following points highlight the five major limitations of financial statements, i.e, (1) Only Interim Reports, (2) Do not Give Exact Position, (3) Historical Costs, (4) Impact of Non-Monetary Factors Ignored, and (5) No precision.

Answer 2

Following are the limitations of the financial analysis:

1. Financial analysis does not consider price level changes.

2. Financial analysis may be misleading without the knowledge of the changes in accounting procedure followed by a firm.

3. Financial analysis is just a study of interim reports.

4. Monetary information alone is considered in financial analysis while non-monetary aspects are ignored.

5. The financial statements are prepared on the basis of on-going concept, as such, it does not reflect the current position.

Hope it's helpful.