Which of the following is true of typical accounting functions used in businesses?
A) Inventory accounting facilitates maintenance of appropriate levels of inventory and aids in calculation of appropriate stocking and reorder levels.
B) Fixed assets record the improvements to leased property or equipment made by the business.
C) Payroll records automatically calculate and accumulate depreciation.
D) Accounts receivable records track what one owes and helps to make timely payments.

Question

Quizplus · Accepted Answer

Inventory accounting is used to ensure that a business maintains appropriate levels of inventory and aids in the calculation of stocking and reorder levels.

Option B is incorrect as fixed assets accounting records the cost and depreciation of long-term assets owned by the business, not leased property.

Option C is incorrect as payroll records track employee compensation and taxes and do not have anything to do with the accumulation of depreciation.

Option D is incorrect as accounts payable records track what a business owes to its suppliers, while accounts receivable records track what is owed to the business by its customers. It does not aid in making timely payments.

Which of the Following Is True of Typical Accounting Functions