Documentation of the Accounting System Allows

question 95

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.

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Definitions:

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period, at given price levels.

Natural Rate

The long-term unemployment rate around which the labor market is in equilibrium, unaffected by short-term fluctuations.

Unemployment

The condition of being without a job while actively looking for employment and being willing to work.

Potential GDP

An estimate of the maximum output an economy can produce when it is most efficiently utilizing all available resources.