(1) It takes into account only the transactions of monetary nature.It implies that the qualitative aspects (such as managerial skills,service of experts etc.) of a transaction are not considered.
(2) It is a post-mortem survey(ie:- historical in nature). It implies that accounting considers only whay has happened in the past.But the information relating to the past,present and future are required for the purpose of decision making.
(3) It does not provide information relating to a particular product or activity.In other words , it provides only the information about the concern as a whole.
(4) It does not consider the effect of price level changes.This is because the transactions are recorded at cost price and not at market price.
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