Accounting Information Systems Have Five Generic Elements

question 59

Multiple Choice

Accounting information systems have five generic elements. Which of the following would most appropriately be labeled "storage" within the context of the sales / collection process?

• A)A paper file of outstanding customer invoices
• B)An electronic database of sales transactions
• C)Both A and B
• D)Neither A nor B

---

Definitions:

FASB

The Financial Accounting Standards Board, an organization responsible for establishing and improving financial accounting standards in the U.S.

IASB

Stands for the International Accounting Standards Board, which is an independent, private-sector body that develops and approves International Financial Reporting Standards (IFRSs).

Gross Method

An accounting practice where purchases are recorded at their gross price without deducting any cash discounts at the time of purchase.

Perpetual Inventory System

An accounting technique that utilizes computerized point-of-sale systems and enterprise asset management software to immediately record inventory transactions upon sale or purchase.