Which of the Following Statements Best Describes Accounting

question 31

Multiple Choice

Which of the following statements best describes accounting?

• A)An information system in which the underlying economic conditions of organizations are recorded, summarized, and reported.
• B)The reports that management prepares for the owners of the company summarizing how the company performed during the period.
• C)An information system in which all transactions with the company are accurately reported.
• D)The reports that management prepares for use in making decisions related to the financing, investing and operating activities of a company.

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Definitions:

Operating Period

The time frame during which a business operates to achieve its set objectives, which can be measured daily, monthly, quarterly, or annually.

Net Operating Income

The profit generated from a business's operational activities, excluding taxes and interest.

Common Fixed Expenses

Costs that do not change with the level of production or sales, shared across different segments or products of a company.

Business Segments

Portions of a company that can be separately identified by the products they offer or the regions they operate in, for financial reporting purposes.