Which of the Following Best Demonstrates the Relationship Between Accounting

question 55

Multiple Choice

Which of the following best demonstrates the relationship between accounting information systems and other areas of accounting?

• A) Tax accountants have to create budgets.
• B) Auditors often prepare tax returns for their clients.
• C) Virtually all areas of accounting involve inputs, processes, outputs, storage and internal controls.
• D) Accounting information systems is the most important area of accounting.

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Definitions:

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing activity by operating, investing, and financing activities.

Quick Ratio

A liquidity ratio that measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventories.

Return on Sales

A financial ratio that calculates a company's net income relative to its revenue, showing how efficiently it converts sales into profits.

Total Asset Turnover

A financial ratio that measures a company's efficiency in using its assets to generate sales revenue.