Following are the disadvantages or limitations of double
entry book-keeping system
a)No record of all business activities: Under this system,
all the business activities cannot be recorded. It records only the financial
transactions and ignores non-financial qualitative activities of business.
b)Difficulty in corrective actions: Under double entry
system, financial statements are prepared after the expiry of the accounting
period.
Therefore, it is difficult to use corrective measures within the accounting period.
Therefore, it is difficult to use corrective measures within the accounting period.
c)Expensive: This system involves the maintenance of a
number of account books. So, it is quite expensive.
d)Complicated: This system requires strict adherence to the
principles or the rules of accounting. Therefore ,accounts cannot be maintained
without adequate knowledge and training under this system.
e)Failure to disclose some errors: In this system, only
arithmetical accuracy of the accounts is checked by preparing a trial balance.
But there are some errors which cannot be disclosed under this system. For
examples, complete omission of a transaction, recording of wrong amount etc.
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