Question

Which of the following statements regarding the financial accounting information system is true?

a. It is designed to provide accurate and timely feedback for planning and control of cost activities.
b. It is designed to assign costs to individual products and services and other objects as specified by management.
c. It is primarily concerned with producing outputs such as the balance sheet and income statement for external users.
d. It is bound by internally imposed criteria that define inputs and processes and are set by people in the company.

Answer 1

The financial accounting information system is primarily concerned with creating financial statements for external users to inform their decisions.

Step-by-step explanation:

The correct statement regarding the financial accounting information system is: c. It is primarily concerned with producing outputs such as the balance sheet and income statement for external users. Financial accounting focuses on providing information through financial statements to external parties such as investors, creditors, and regulatory bodies to aid in their decision-making processes. This system adheres to standardized guidelines known as Generally Accepted Accounting Principles (GAAP), to ensure consistency and comparability across different companies and industries.