English

What are the limitations of financial statements? -

Advertisements
Advertisements

Question

What are the limitations of financial statements?

Options

  • Prepared on the basis of going concern concept 

  • Doesn't consider price level change

  • It's a study of interim report

  • All of the above

MCQ

Solution

All of the above.

Explanation:

Some limitations of financial analysis are:

  • Financial analysis is just a study of interim reports.
  • Financial analysis may be misleading without the knowledge of the changes in accounting procedure followed by a firm. 
  • Financial analysis does not consider price level changes.
  • The financial statements are prepared on the basis of on going concerns basis.
  • Monetary information alone is considered in financial analysis while non-monetary aspects are ignored.
shaalaa.com
  Is there an error in this question or solution?
Share
Notifications

Englishहिंदीमराठी


      Forgot password?
Use app×