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Limitazioni nell'uso delle informazioni di account

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  • Note di Apprendimento
  • Revisione degli argomenti
    Wendy C.
    AU
    Wendy C.

    The limits to providing accounting information result from timeliness and cost. Historical values have to be made to represent current values.

    Samuel F.
    ZA
    Samuel F.

    What are some of limitations of accounting information?

    Harrison A.
    AT
    Harrison A.

    The income statement has some limitations since it reflects accounting principles .For example, a company's depreciation expense is based on the cost of the assets it has acquired and is using in its business.the resulting depreciation expense may not be a good indicactor of the economic value of the assets being used up .

    Harrison A.
    AT
    Harrison A.

    What are the limitations in the use of accounting information ?

    Harrison A.
    AT
    Harrison A.

    One limitation of the balance sheet is that only the assets acquired in the transactions can be included . therefore,some of the company's most valuable assets will not be reported on the balance sheet . Another limitation of the balance sheet pertains to a company's long term (or noncurrent ) assets which have increased in the value since the time they were purchsed in a transaction .For instance , a company's land will be reported at an amount no greater than its cost(due to the accountant's cost principle ). its buildings will be reported at their cost minus their accumulated depreciation(due to the cost principle).Hence, the amounts reported on the balance sheet for a company's land and buildings could be much lower than their market value .

    Harrison A.
    AT
    Harrison A.

    Does balance sheet provide accounting information ?

    Zachary B.
    US
    Zachary B.

    What are some limitations in the use of accounting information?

    Caroline Monica M.
    MW
    Caroline Monica M.

    Due to economc changes some information may not give the exact value of an asset, also if a business decides to diversfy into something else, at this point the past information may not be relevant because the nature of business has changed, so historic information may not work on this one.

    Diamond T.
    US
    Diamond T.

    Accounting is only one source of information and primarily provides information based on financial terms: Although this information is vital, decisions cannot be based solely on a monetary basis. Various decisions depend upon a diverse range of issues being considered. A unique combination of Quantitative as well as Qualitative factors should be considered to ensure an effective decision making process.

    Douglas R.
    US
    Douglas R.

    Accounting information is important too.

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