Consider the Following Information Items as You Respond to the Next

question 1

Multiple Choice

Consider the following information items as you respond to the next question: i. Customer master file
Ii) Journal entry to record the receipt of cash
Iii) Pre-numbered documents
Iv) Schedule of accounts receivable
Accounting information systems have five generic elements. Which of the following statements is most true?

• A)"Pre-numbered documents" can be an example of three of the five elements.
• B)"Schedule of accounts receivable" can be an example of all five elements.
• C)Both A and B are true.
• D)Neither A nor B is true.

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Definitions:

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability based purely on operational and business activities without considering interest and tax expenses.

Depreciation

An accounting method used to allocate the cost of a tangible asset over its useful life.

Net Capital Spending

The total expenditure on physical assets less any asset sales, reflecting how much a company is investing in its physical assets.

CCA Rate

The annual depreciation rate used under the Canadian tax system to calculate depreciation expense for tax purposes on a depreciable asset.