The Flexibility Principle of Accounting Information Systems Prescribes That The

question 37

Multiple Choice

The flexibility principle of accounting information systems prescribes that the:

• A)Benefits from an activity in the system outweigh the costs of the activity.
• B)System report useful,understandable,timely,and pertinent information for effective decision making.
• C)System aid managers in controlling and monitoring business activities.
• D)System be able to adapt to changes in the company,business environment,and needs of decision makers.
• E)System conforms to a company's activities,personnel,and structure.

---

Definitions:

Financial Position

A statement or status of an entity’s resources, liabilities, and equity at a particular point in time, illustrating its economic standing.

Equity Section

The section of a company's balance sheet that represents the residual interest in the assets of the entity after deducting liabilities, including items such as share capital, retained earnings, and reserves.

Pre-acquisition Entry

Accounting entries recorded to prepare the accounts for the consolidation process, reflecting adjustments necessary prior to acquisition.

Subsidiary

A company that is controlled by another company, called the parent company, through the ownership of more than half of its voting stock.