  N-Body simulations are a very important tool in the study of formation of
large scale structures. Much of the progress in understanding the physics of
galaxy formation and comparison with observations would not have been possible
without N-Body simulations. Given the importance of this tool, it is essential
to understand its limitations as ignoring these can easily lead to interesting
but unreliable results. In this paper we study the limitations due to the
finite size of the simulation volume. We explicitly construct the correction
term arising due to a finite box size and study its generic features for
clustering of matter and also on mass functions. We show that the correction to
mass function is maximum near the scale of non-linearity, as a corollary we
show that the correction to the number density of haloes of a given mass
changes sign at this scale; the number of haloes at small masses is over
estimated in simulations. This over estimate results from a delay in mergers
that lead to formation of more massive haloes. The same technique can be used
to study corrections to other physical quantities. The corrections are
typically small if the scale of non-linearity is much smaller than the
box-size. However, there are some cases of physical interest in which the
relative correction term is of order unity even though a simulation box much
larger than the scale of non-linearity is used. Within the context of the
concordance model, our analysis suggests that it is very difficult for present
day simulations to resolve mass scales smaller than 100 solar masses accurately
and the level of difficulty increases as we go to even smaller masses, though
this constraint does not apply to multi-scale simulations.
