To Determine If an Information System Delivers Net Savings in Costs

question 96

True/False

To determine if an information system delivers net savings in costs, the cost of developing and operating the information system will need to be offset against the gains in reduced errors and paper, ink, and printing costs.

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Definitions:

FOB Shipping Point

A shipping term indicating that the buyer assumes responsibility for the goods and the associated costs once the goods leave the seller's premises.

Ending Inventory

Ending inventory is the total value of all inventory, including raw materials, work-in-progress, and finished goods, that a company has at the end of an accounting period.

FOB Destination

A shipping term indicating that the seller bears delivery costs and risks until the goods reach the buyer's specified location.

Perpetual Inventory System

A perpetual inventory system continuously updates the record of inventory with each sale or purchase, providing real-time data on the inventory levels.