Documentation of the Accounting System Allows

question 58

Multiple Choice

Documentation of the accounting system allows:

• A)The accountant to analyze and understand the procedures and business process and the systems that capture and record the accounting data.
• B)The non-accountant to create a picture or chart of what should happen within the accounting system.
• C)The investor to see inside the accounting system so that he / she can better understand the financial statements.
• D)The accountant to determine which financial statements will be necessary to properly report the results of operations.

---

Definitions:

Merchandising Firms

Businesses that purchase finished goods for resale, typically operating in the retail or wholesale sectors.

Retail and Wholesale

The selling of goods in small quantities (retail) to consumers and in large quantities (wholesale) to businesses or retailers.

Theory of Constraint (TOC)

A management philosophy that focuses on identifying and removing bottlenecks or constraints that limit the performance of a system.

Ethical Responsibility

The duty of individuals and corporations to act in ways that benefit not just themselves but also society, often beyond legal obligations.