Limitations of Accounting Information

Steps:

• Identify common limitations: accounting data is historical, based on estimates, and ignores non-monetary factors.
• Review statements 1, 2, and 3 against these (assuming standard ones like timeliness, subjectivity, and qualitative omissions).
• Check which combinations match all three limitations.
• Select the option including all valid statements.

Why A is correct:

• Option A includes statements 1, 2, and 3, aligning with GAAP principles that accounting info is limited by historical cost, judgments, and exclusion of qualitative aspects.

Why the others are wrong:

• B omits statement 3, missing a key limitation like subjectivity in estimates.
• C omits statement 2, ignoring historical nature per accounting standards.
• D omits statement 1, excluding timeliness issues defined in financial reporting frameworks.

Not enough information: Statements 1, 2, and 3 not provided.

Final answer: A