Which of the Following Is TRUE of an Effective Accounting

question 39

Multiple Choice

Which of the following is TRUE of an effective accounting information system?

• A) It has little influence in improving a company's internal control activities.
• B) The cost of using an accounting information system is the same for both small and large businesses.
• C) A compatible accounting information system works smoothly with the business's employees and organizational structure.
• D) Large private companies prefer a manual accounting information system since their financial statements are not audited.

---

Definitions:

Long-term Liabilities

Debts or obligations that are due in more than one year's time, reflecting a company's financing strategies beyond the short term.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating its short-term financial health and operational efficiency.

Net Fixed Assets

The value of a company's fixed assets, such as property and equipment, minus any accumulated depreciation.

Total Assets

Total assets comprise the sum of all assets, both current and non-current, owned by a company and recorded in the balance sheet.