The Use of Computers in Processing Accounting Data

question 27

Multiple Choice

The use of computers in processing accounting data

• A) eliminates the need for accountants.
• B) eliminates the double entry system as a basis for analyzing transactions.
• C) eliminates the need for financial reporting standards such as those promulgated by the FASB.
• D) may result in the elimination of document trails used to verify accounting records.

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Definitions:

NPV

Net Present Value (NPV) is a financial metric that calculates the present value of all future cash flows associated with an investment, minus the initial investment cost.

Risk

Exposure to the chance of loss or damage, often evaluated in financial terms for its potential impact on investment returns.

Sensitivity Analysis

A technique used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions.

Capital Budgeting

The process a business undergoes to evaluate potential major projects or investments.