As a Processing Tool in an Accounting Information System, ERP

question 13

Multiple Choice

As a processing tool in an accounting information system, ERP software is capable of generating outputs in the form of general-purpose financial statements. Which of the following statements is most true?

• A)The financial management module alone contains all the information a company needs to produce its financial statements.
• B)All four common ERP system modules provide information to the general purpose financial statements.
• C)A company needs to create a fifth module called "financial statement creation" if it wants to use an ERP system to create its financial statements.
• D)None of the above statements is true.

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Definitions:

Flexible Budget

An adjustable budget that changes or scales according to the level of activity or output, making it more useful for performance evaluation.

Total Variable Cost

The total of all costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.

Activity Declines

Situations where the level of activity or productivity in a business decreases over a certain period.

Actual Costs

The true or realized expenses incurred in the production of goods or services, as opposed to estimated or budgeted costs.