An Accounting System That Provides Information That Management Can Use

question 169

Multiple Choice

An accounting system that provides information that management can use to evaluate the profitability and/or cost effectiveness of a department's activities is a:

• A) Departmental accounting system.
• B) Cost accounting system.
• C) Service accounting system.
• D) Revenue accounting system.
• E) Standard accounting system.

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Definitions:

Planning Assumptions

The set of hypotheses upon which a plan or strategy is built, regarding future market conditions, costs, or other factors.

Negative Net Income

A financial situation where a company's total expenses exceed its revenues, leading to a loss.

Extra Money

Extra money refers to funds that are available beyond what is needed for regular expenses, savings, or immediate commitments.

Dividend Payout Ratio

A financial metric that shows what portion of a company's net income is distributed to shareholders in the form of dividends.