Effective exception reporting depends on an accounting information system having the ability to do which of the following?
A) Sequence selected records based on the size of the differences between comparative account balances
B) Select records based on differences between current actual account balances and prior period actual account balances
C) Select records based on differences between actual account balances and the budgeted amount for those accounts
D) All of the above are important for effective exception reporting.

Question

Quizplus · Accepted Answer

All of the choices listed are important for effective exception reporting. Sequence selected records based on the size of the differences between comparative account balances would identify accounts with significant fluctuations. Selecting records based on differences between current actual account balances and prior period actual account balances would identify accounts that have changed significantly from the previous period. Selecting records based on differences between actual account balances and the budgeted amount for those accounts would identify accounts that are over or under budget. All of these methods can help identify exceptions and potential errors in accounting data.

Effective Exception Reporting Depends on an Accounting Information System Having