limitations of accounting-briefly explain - Accountancy - Introduction to Accounting

Question

limitations of accounting-briefly explain

Komal Verma · Accepted Answer

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