Final answer:
In a Data Flow Diagram (DFD), entities are referred to as terminators because they represent the sources and destinations of data. Terminators establish the limits of the system by denoting where data comes into or leaves the system.
Step-by-step explanation:
In the context of a Data Flow Diagram (DFD), entities are commonly referred to as terminators because they are either the starting point for data or its final destination. These terminators are depicted as squares or rectangles on a DFD, and they denote where data enters or exits the system, interacting with external entities such as customers, organizations, or other systems. It is crucial to accurately identify these terminators in a DFD as they define the boundary of the system and capture all sources and destinations for data flows within that system.