Some Events Are Not Recorded in the Accounting Information System

question 44

Multiple Choice

Some events are not recorded in the accounting information system because

• A)the amounts are not material.
• B)the service has not been provided yet although the cash has been received.
• C)the problems measuring them are too complex.
• D)all of these.

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Definitions:

Par

This term typically refers to a financial instrument's nominal or face value, as opposed to its market value or price.

Negative Covenant

A clause in a contract that prohibits a borrower from taking certain actions, intended to protect the interests of the lender by maintaining the borrower's financial stability.

Current Ratio

A financial ratio indicating the capacity of a firm to cover its short-term liabilities with its current assets.

Loan Collateral

Assets a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.