Identify the Accounting Information System Principle Below That Applies to Each

question 78

Short Answer

Identify the accounting information system principle below that applies to each of these situations.
a. Control
b. Compatibility
c. Relevance
d. Flexibility
e. Cost-benefit
_____ 1. Global Company has designed their accounting information system to be adaptable to changes in technology,the business environment,and the needs of decision makers.
_____ 2. Global Company has world-wide operations that must handle several thousand
different products,so the accounting information system is fairly complex,encompassing marketing and manufacturing.
_____ 3. Global Company's accounting information system has policies to ensure that financial statements will be reliable,assets are protected,and relevant laws and regulations are complied with.
_____ 4. Global Company's accounting information system can be improved markedly for a
cost of about $30,000,000.However,the incremental benefits from such improvements are not expected to outweigh this cost.
_____ 5. Global Company has designed their accounting information system so that key managers can obtain the information they need to make decisions relating to new products,sales,and controlling costs.

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Definitions:

Posting

The process of transferring the debits and credits from the journal entries to the accounts.

Debit

An entry recorded on the left side of an account ledger, signifying an increase in assets or expenses or a decrease in liabilities, equity, or income.

Unearned Revenue

The liability created by receiving revenue in advance.

Capital Account

A financial statement account that represents the ownership interests or equity in a company.