Limitations of accounting
Options
A
B
C
D
For any discrepancies in this question, email contact@cadada.in
Theoretical FrameworkQ.1 | Meaning and Scope of AccountingQuestion 4603 of 110
All Questions Correct Answer
✅ Option — Correct Option
All Options:
- A
- B
- C
- D
Detailed Solution & Explanation
Limitations of accounting are:
Accounting is not an exact science.
It is based on many assumptions & conventions.
It involves many estimation which results into subjectiveness.
There are different alternatives possible for the same item which gives scope for
manipulation to get desired result.
It is a post mortem exercise and the information about entities perfor- mance and
financial position are available quite late i.e. after a year.
It cannot record the effect of many important events which cannot be measured in
terms of money like value of human resources which an enterprise has.
It does not consider the effect of inflation on income, expense, assets & liabilities
(known as Inflation Accounting).
More Questions from Theoretical Framework
What do you mean by accounting? Give its definition.
What are the branches of Accounting? Explain. OR What are the sub-fields of Accounting? [Dec 2023]
Functions of accounting data. [Jan. 2025, 4 Marks]
Differentiate between Book keeping and Accounting. [Sept. 2024, 4 Marks]
Capital is all assets less fictitious assets.
Capital+ Long Term Liabilities = Fixed Assets+ Current Assets+ Cash - Current Liabilities.
Ready to Master Theoretical Framework?
Practice all 110 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.
Start Practicing — It's Free