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Financial Accounting Essay Topics & Paper Examples

Limitations of Financial Accounting

Financial accounting is the only branch of accounting and it is not perfect. There are large numbers of limitations which open new way to use other tools of accounting. To know what are the main limitations of financial accounting. It is very necessary for accountants. Accountants are often blind to these limitations. So, I am covering its limitation a lot of ground. Read below and understand:- 1. Financial accounting is of historical nature Net effect of transactions are recorded in financial accounting which has happened in past. These accounts is just postmortem of all events of business in past .These record does not help for future planning and other managerial decisions. Financial accounting shows the profitability of business but it…

Whether Fair Value Should Be Retained In Financial Accounting

Fair value may also be called the justified or unbiased price. It is applied in both Economics and Accounting. Fair value accounting refers to the rational or unbiased estimate for the possible good’s, service’s and asset’s market price. Fair value in Accounting is aimed at presenting financial data in the most utilizable way possible. Financial statements will therefore represent the true and reasonable view of the financial information relating to any financial entity. Stakeholders will hence be able to make their investment and relationship decisions based on Accounts statements that have utilized the Fair Value Accounting principle. The Body: Fair value in Accounting considers objective factors like;  The acquiring, producing or distributing costs, replacing and costs for the closest substitutes,…