Question

FRS-financial reporting system MRS management reporting system a. Preparation of balance sheet b. Capture customer sales order c. Preparation of variance reports d. Preparation of budgets e. Purchase order preparation f. Summary of inventory purchases by vendor g. Preparation of comparative sales report by division h. Preparation of cash disbursements to vendors i. Annual report preparation j. Customer billing process k. Cost-volume-profit analysis

Answer 1

Answer-1-

	Activity	Classification
a.	Preparation of balance sheet	FRS
b.	Capture customer sales order	Neither FRS nor MRS, its Transaction Processing system
c.	Preparation of variance reports	MRS
d.	Preparation of budgets	MRS
e.	Purchase order preparation	Neither FRS nor MRS, its Transaction Processing system
f.	Summary of inventory purchases by vendor	FRS
g.	Preparation of comparative sales report by division	MRS
h.	Preparation of cash disbursements to vendor	FRS
i.	Annual report preparation	FRS
j.	Customer billing process	Neither FRS nor MRS, its Transaction Processing system
k.	Cost-volume profit analysis	MRS

2-

	Activity	Classification
a.	Qualitative characteristic being employed when companies in the same industry are using the same accounting principles.	Comparability
b.	Quality of information that confirms users’ earlier expectations.	Confirmatory value
c.	Imperative for providing comparisons of a company from period to period.	Comparability
d.	Ignores the economic consequences of a standard or rule.	Neutrality
e.	Requires a high degree of consensus among individuals on a given measurement.	Verifiability
f.	Predictive value is an ingredient of this fundamental quality of information.	Relevance
g.	Four qualitative characteristics that are related to both relevance and faithful representation	Comparability, verifiability, Timeliness, and understandability
h.	An item is not recorded because its effect on income would not change a decision.	Materiality
i.	Neutrality is an ingredient of this fundamental quality of accounting information.	Faithful representation
j.	Two fundamental qualities that make accounting information useful for decision-making purposes.	Relevance and faithful representation
k.	Issuance of interim reports is an example of what enhancing quality of relevance?	Timeliness

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