Accounting is an information system that identifies, records, and communicates the economic...

Question:

Accounting is an information system that identifies, records, and communicates the economic events of an organization to interested users. Categorize the following accounting task: selecting economic activities relevant to the company.

a. identification

b. recording

c. communication

Economic Activity

Every activity are classified as economic and non-economic activity when the activity is done with the pure intension to earn money or fulfilling economic interest then such activity is considered as economic activity, one of the examples is Business

Answer and Explanation: 1

The correct answer is Identification

Identification refers to the process of knowing and understanding the economic activity for recording and analyzing the future performance, for a business identification is the first and foremost step for creating and communicating financial statement

The other two options were wrong on the basis

1. Recording is the second step of maintaining the record of all the business-relevant information and this is not related to the selection of economic activities.

2. Communication is simply transferring the recorded information for judgments and good decision-making of shareholders and potential investors and not related with any type of selection of activities.


Learn more about this topic:

Loading...
Alternating Current: Definition, Advantages & Disadvantages

from

Chapter 12 / Lesson 7
69K

Read the definition of direct and alternating current. See the advantages of AC over DC and understand why we use AC instead of DC. Know if we use AC or DC in homes.


Related to this Question

Explore our homework questions and answers library