Given that measuring a firm's financial health is important to its survival, which of the following strategies is good advice for a person just starting a business?
A) Create a method for keeping your books that makes sense to you. Outside agencies such as creditors and suppliers will not evaluate you by the way you keep books.
B) All transactions are important. Separating transactions only serves to create a perception that some transactions are of lesser importance than others.
C) Accounting systems used by big business are not suitable for small businesses.
D) Select an accounting system that helps you make decisions, and helps you report information to others outside your firm.

Question

Quizplus · Accepted Answer

It is almost impossible to effectively run a business without utilizing an accounting system to record, classify, and summarize financial events and transactions. We use our accounting systems to help make well-informed decisions, as well as to report financial information about the firm to interested stakeholders.

Given That Measuring a Firm's Financial Health Is Important to Its