An accounting system should generate both internal and external reports.

Question

Quizplus · Accepted Answer

An accounting system is designed to generate both internal and external reports for the purpose of decision-making, financial management, and compliance with legal and regulatory requirements. Internal reports are intended for use by the company's management and employees, while external reports are intended for use by outside stakeholders such as investors, creditors, and tax authorities. Examples of external reports include financial statements, tax returns, and regulatory filings, while examples of internal reports include budget reports, cash flow analyses, and cost accounting reports.

An Accounting System Should Generate Both Internal and External Reports