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Accounting records transactions and events that can be measured in money terms. It this, in your opinion,a limitation of accounting or an advantage? Give reasons. |
| Answer» Solution :YES. Accounting records only financial transaction and events. It is an advantage as transactions of DIVERSE nature are RECORDED using a COMMON YARDSTICK, i.e., money. But there are other important transactions and events which many have far-reaching effect on business. They are not recorded because they cannot be measured in money terms. For example, production loss due to labour strike. Thus, it is a limitation to that extent. | |