One of the limitations with the traditional accounting system is that it is common to measure current performance against the previous year's performance, which is not an indicator that the business's performance is good enough.

Question

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Comparing current performance to the previous year's performance does not necessarily indicate whether the business is performing well or not. It may not take into account changes in the market or industry, as well as internal changes within the business. Therefore, relying solely on this comparison may not provide a reliable indicator of the business's current performance.

One of the Limitations with the Traditional Accounting System Is