What Is One Potential Drawback in the Design and Implementation

question 5

Multiple Choice

What is one potential drawback in the design and implementation of database systems for accounting?

• A) Double-entry accounting relies on redundancy as part of the accounting process but well-designed database systems reduce and attempt to eliminate redundancy.
• B) Relational DBMS query languages will allow financial reports to be prepared to cover whatever time periods managers want to examine.
• C) Relational DBMS provide the capability of integrating financial and operational data.
• D) Relational DBMS can accommodate multiple views of the same underlying data; therefore, tables storing information about assets can include data about both historical and replacement costs.

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Definitions:

Time Value

The concept in finance that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Initial Value Method

The initial value method is an accounting approach used in investments where the investment is recorded and maintained at its acquisition cost, ignoring market fluctuations.

Acquisition Method

An accounting method used in business combinations, where the purchasing entity records the assets and liabilities of the acquired entity at fair value.

Internal Reporting

The process of preparing and presenting financial statements and other reports to management within an organization.