Question

Write all Limitations of accounting.

Answer 1

Dear Student

Limitations of Accounting

• Qualitative aspects like, quality, size, colour, etc. are not revealed by accounting records
• Window dressing (manipulation and misrepresentation) is possible in preparation and presentation of accounts
• Market value of assets are ignored
• Effects of inflation (price change) are ignored in the accounting records
• Some items like, anticipated losses and profits are based on estimation and past experiences

Regards