Accounting Information Is Relevant to Business Decisions Because It

question 121

Multiple Choice

Accounting information is relevant to business decisions because it

• A)has been verified by external audit.
• B)is prepared on an annual basis.
• C)confirms prior expectations.
• D)is neutral in its representations.

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Definitions:

Daily Postings

The routine process of recording transactions in the books of accounts or ledgers on a daily basis to ensure financial records are up-to-date.

Control Account

An account in the general ledger used to simplify the recording of transactions and track the total amounts for financial statement purposes, often summarizing the details that are held in a subsidiary ledger.

Special Journals

Accounting books or ledgers used for recording and categorizing specific types of transactions such as sales, purchases, cash disbursements, and cash receipts in a more efficient manner.

Merchandise Purchase

Transactions involving the buying of goods for resale in the normal course of business.