An Accounting System That Collects Financial and Operating Data on the Basis

question 20

Multiple Choice

An accounting system that collects financial and operating data on the basis of the underlying nature and extent of cost drivers is (CMA adapted)

• A)full-absorption costing.
• B)activity-based costing.
• C)variable costing.
• D)benchmarking.

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Definitions:

Closing Entries

Accounting journal entries made at the end of an accounting period to transfer temporary accounts' balances to permanent accounts, thus preparing the books for the next period.

Accounting Cycle

The process of recording and processing all financial transactions of a company, from when the transaction occurs, to its representation in the financial statements, followed by closure of accounts.

Work Sheet

A document used by accountants to prepare adjusting entries and to draft a company's financial statements.

Accounting Cycle

The accounting cycle is a step-by-step process of recording, classifying, and summarizing financial transactions of a business to provide an accurate picture of its financial position and performance.