Maggie Mize operates a small business and uses a manual system of accounting. Transactions are entered in the general journal and posted to accounts in the general ledger at the end of the month. Although the volume of transactions has increased significantly in the past year Ms. Mize does not feel that it would be cost-effective to install an electronic accounting system. She hires you as a consultant to make recommendations about how to record transactions more efficiently. Briefly describe the principles that you would consider in making recommendations to Ms. Mize.

Question

Raghav Setia · Accepted Answer

Final Answer : In order for Ms. Mize to have a more efficient accounting system three principles must be followed. These principles are cost effectiveness usefulness and flexibility. Cost effectiveness simply means that the benefits received must outweigh the costs. Usefulness refers to the fact that the system must provide the users with timely accurate and understandable information. And flexibility means that the system must be able to adapt to changing needs. Applying these principles to Ms. Mize's situation would lead to the recommendation for the use of special journals.

Definitions

Learning Objectives

Learning Objectives

Related questions