Problems in Accounting Information Systems Are Often Less Likely to Have

question 24

Multiple Choice

Problems in accounting information systems are often less likely to have deterministic answers than problems in other areas of accounting. Which of the following questions has a deterministic answer?

• A) Should AIS documents be paper or electronic?
• B) What is the balance in cash as of August 19, 2006?
• C) What are the costs and benefits of using information technology in the AIS?
• D) At what point does an amount become "material" as the term is defined in the conceptual framework?

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Definitions:

Net 50

A payment term that indicates an invoice must be paid in full within 50 days.

Lock Box System

A service offered by banks to process payments received by a company directly into its bank account, speeding up the collection and utilization of funds.

Check Clearing

The process of transferring funds from the check writer's account to the recipient's account, finalizing the payment.

Compensating Balance

A minimum account balance that a borrower is required to maintain as a condition for obtaining a loan, it compensates the bank by offsetting the cost of providing the loan.