1.

Collects and processes transaction data and communicates financial information to decision

makers

Answer: Accounting Information System

2. The system must be cost effective: the benefits of the information must outweigh the cost of

providing it

Answer: Cost-effectiveness

3. To be useful, the information must be understandable, relevant, reliable, timely, and

accurate.

Answer: Usefulness

4. The system should accommodate a variety of users and changing information needs.

Answer: Flexibility

5. Software programs that integrate the various accounting functions related to sales,

purchases, receivables, payables, cash receipts, and disbursements, and payroll.

Answer: General ledger accounting system

6. Assumes that the costs of the earliest goods purchased are the first to be sold

Answer: FIFO Method

7. Assumes that the costs of the latest units purchased are the first to be sold
Answer: LIFO Method

8. Assumes that the goods available for sale are similar in nature

Answer: Average-Cost Method

9. Measures the number of times on average the inventory is sold during the period

Answer: Inventory Turnover

10. Widely used to estimate the ending inventory

Answer: Gross Profit Method

11. Used to retail companies to estimate the cost of the inventory

Answer: Retail Inventory Method