Discuss the limitations which must be kept in mind while evaluating the Financial Statements.

Limitations which must be kept in mind while evaluating the Financial Statements are as follows: The factors which may be relevant in assessing the worth of the enterprise don’t find place in the accounts as they cannot be measured in terms of money.Balance Sheet shows the position of the business on the day of its preparation and not on the future date while the users of the accounts are interested in knowing the position of the business in the near future and also in long run and not for the past date.Accounting ignores changes in some money factors like inflation etc.There are occasions when accounting principles conflict with each other.Certain accounting estimates depend on the sheer personal judgement of the accountant.Different accounting policies for the treatment of same item adds to the probability of manipulations.