Question

Which is/are limitation of Accounting Standards?

• A. The choice between different alternative accounting treatments is difficult.
• B. There may be trend towards rigidity.
• C. Accounting Standards cannot override the statute.
• D. All of the above.

Answer 1

Answer: (D)

All of the above.

The limitations of accounting standards are:

1. Accounting standard makes choice between different alternate

accounting treatments difficult to apply.

2. It is rigidly followed and fails to extend flexibility in applying accounting

standards.

3. Accounting standard cannot override the statue. The standards are

required to be farmed within the ambit of prevailing status