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Accounting Cost Benefit Principle

This paper explores the cost-benefit principle in accounting, focusing on its application in financial decision-making.

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    Accounting Cost Benefit Principle 1. All of the following statements regarding internal control procedures are true except: Internal control procedures are designed to ensure reliable financial reports. Internal control procedures are designed to safeguards company assets. Internal control procedures direct operations toward common goals. Internal control procedures include methods to achieve compliance with laws and regulation. Internal control procedures are not affected by the cost - benefit principle. 2. The control principle for accounting information systems requires that the: Benefits from an activity outweigh the costs of the activity. System report useful, understandable, timely, and pertinent information for effective decision making. System must have internal controls . System adapts to changes in the company, business environment, and needs of decision makers. System conforms to a company's activities, personnel, and structure. 3. The basic components of an accounting information system include all of the following except: Source docu ments. Warehouses , Information processors. Information storage. Input devices. ? 4. Information processors: Include information storage . Interpret, transform, and summarize information for use in analysis and reporting . Are components of an accounting system that keep data in accessible form? Are the means to take information out of an accounting system and make it available to users? Include scanners. 5. An accounts payable ledger is: A subsidiary ledger that contains an account for each supplier (creditor) . A list of the balances of all the accounts in the accounts receivable ledger that is added to show the total amount of accounts receivable outstanding. A book of original entry that is designed and used for recording only a specific type of transaction. The ledger that contains the financial statement accounts of a business. A subsidiary ledger that contains a separate account for each party that grants both short - term and long - term credit on account to the company. 6. The use of an Accounts Payable controlling account: Reduces the number of accounts in the subsidiary ledger. Reduces the total number of accounts maintained. Reduces the number of entries in the general journals. Reduces the number of accounts in the general ledger . Increases the number of columns in the journals. 7. Enterprise - resource planning software: Refers to programs that help manage a company's vital operations . Is another name for spreadsheet programs? Uses batch processing of business information. Is substantially declining in use. Is another name for database programs? 8. A business segment: Requires only internal reporting. Is a part of a company that is separately identified by its products, services, or geographic market ? Requires special journals. Requires subsidiary ledgers. Cannot report its results separately.

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