Question

The following are three computer files from the internal systems of a corporation:

A.A complete listing of the firm's property, plant, and equipment (PPE), including such information as date of purchase, historical cost, accumulated depreciation, estimated service life, etc.
B.The names and addresses of all vendors from whom the firm has purchased PPE in the past.
C.Journal entries affecting PPE.
Which one of the following is an appropriate ranking of the three files in order from the most to the least volatile?

Answer 1

The appropriate ranking of the files from most to least volatile is: Journal entries (C), vendor names and addresses (B), and listing of PPE (A), based on the frequency of updates to the information they contain.

Step-by-step explanation:

The question posed requires the ranking of computer files from the most to the least volatile based on the frequency of change. File volatility refers to how often the information in a file is likely to change. In this context:

• File C, which contains Journal entries affecting Property, Plant, and Equipment (PPE), would be the most volatile since journal entries are made regularly as transactions affecting PPE occur.
• File B, containing the names and addresses of vendors from whom the firm has purchased PPE, would be less volatile, as vendor information may change, but not as frequently as transactions.
• File A, listing the firm's PPE with historical cost and depreciation, is the least volatile, as it contains long-term asset information which changes infrequently, typically only due to acquisitions, disposals, or periodic depreciation.

Therefore, the appropriate ranking from most to least volatile is: Journal entries (C), vendor names and addresses (B), and listing of PPE (A).