Multiple Choice
Which of the following statements about status reports is most accurate?
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1. Introduction to Accounting
Useful Information
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In financial accounting, which term best describes processed facts that are used as output to assist in making decisions?
A
Information
B
Transaction
C
Data
D
Ledger
Verified step by step guidance1
Understand the definitions of the terms provided in the options: Information, Transaction, Data, and Ledger.
Recognize that 'Data' refers to raw, unprocessed facts and figures, which are not yet organized or meaningful.
Identify that 'Transaction' refers to a business event or activity that is recorded in the accounting system, such as a sale or purchase.
Note that 'Ledger' is a book or digital record where transactions are categorized and summarized, but it is not directly used to assist in decision-making.
Conclude that 'Information' is the processed and organized data that is meaningful and used as output to assist in making decisions, making it the best term to describe the concept in the question.
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