AIS Is an Important Area of Study for Future Accountants

question 24

Multiple Choice

AIS is an important area of study for future accountants because a well-designed AIS can respond to many elements of the conceptual framework.Which of the following statements is most true?

• A)Land is reported as an asset on the balance sheet; assets are one element of financial statements in the conceptual framework.
• B)The difference between land's current market value and its historical cost is reported as a gain on the income statement; gains are one element of financial statements in the conceptual framework.
• C)Because of the qualitative characteristic of consistency, publicly traded corporations cannot change their accounting methods.
• D)Because of the qualitative characteristic of reliability, publicly traded corporations cannot change their accounting methods.

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Definitions:

Daily Profit

The financial gain or loss a business experiences on a daily basis, calculated as the difference between daily revenue and daily expenses.

Capacity

The maximum output that a company can produce under normal conditions.

Marginal Costs

The surge in all-encompassing cost following the production of an additional unit of a product or service.

Demand for Wine

The desire or need for wine that consumers are willing and able to purchase at various prices.