The Flexibility Principle of Accounting Information Systems Prescribes That The

question 147

Multiple Choice

The flexibility principle of accounting information systems prescribes that the:

• A) Benefits from an activity outweigh the costs of the activity.
• B) System report useful, understandable, timely, and pertinent information for effective decision making.
• C) System aid managers in controlling and monitoring business activities.
• D) System be able to adapt to changes in the company, business environment, and needs of decision makers.
• E) System conforms to a company's activities, personnel, and structure.

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Definitions:

Turnover Ratio

A measure of how frequently investments or inventory are bought and sold within a given period, indicating the liquidity or activity level.

Average Daily Assets

The mean value of assets held over a specified period, calculated by taking the sum of daily asset values and dividing by the number of days in the period.

Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

Net Asset Value

The total value of an entity's assets minus the total value of its liabilities, often used in evaluating investment funds.