1.

Explain in brief 4 limitation of financial accounting?

Answer»

1) financial accounting is historical in nature: Net effect of transactions are recorded in financial accounting which has happened in past. 2) INCOMPLETE knowledge of cost:
From cost point of view, financial accounting is incomplete. In financial accounting, ACCOUNTANT  does not calculate each and every PRODUCT’s total cost. 3) absence of full disclosure of facts:

In financial accounting we RECORD only those activities and transactions which we can show or describe in MONEY. 4)no provision of cost control :
Financial accounting does not help business organization for controlling the cost. Because, there is no provision of controlling cost in it.



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