The Transaction Cycle Approach Leads to Efficient Processing of a Large

question 3

Multiple Choice

The transaction cycle approach leads to efficient processing of a large number of transactions because

• A) transaction cycles are easier to computerize.
• B) a large number of transactions within a given cycle can be categorized into a relatively small number of distinct types.
• C) the transaction cycle approach represents the natural order of business.
• D) transaction cycles are easy to understand.

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Definitions:

Inflationary Price Increase

The rise in prices of goods and services over time, typically due to an increase in the money supply or demand outpacing supply.

Reconciled

The process of making sure that two sets of records (usually the balances of two accounts) are in agreement.

Step-fixed Costs

Costs that remain fixed over a range of activity, but jump to a higher level of expense at certain points when activity levels require it.

Variable Cost

Costs that vary directly with the level of production output or business activity, such as materials and labor directly involved in producing a product.