Accounting Information Systems Is an Important Area of Study for Future

question 75

Multiple Choice

Accounting information systems is an important area of study for future accountants because: (i) Developing a strong accounting information system helps achieve some of the components of the FASB Conceptual Framework of Accounting, (ii) Studying AIS helps students develop many of the core competencies suggested by the AICPA, (iii) Acquiring knowledge about AIS helps students learn more about common business processes.

• A)(i) and (ii) only
• B)(ii) and (iii) only
• C)(i) and (iii) only
• D)(i), (ii) and (iii)

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Definitions:

Times Interest Earned Ratio

A financial metric comparing a company's earnings before interest and taxes (EBIT) to its interest expenses, evaluating the company's ability to meet its interest obligations.

Income Before Income Taxes

The profit a company has generated before accounting for income tax expenses, often found on the income statement.

Times Interest Earned Ratio

A financial metric that measures a company's ability to cover its interest obligations with its earnings before interest and taxes (EBIT).

Potential Drop

An anticipated decrease in value or performance, often used in the context of stocks or electrical voltage.