Multiple Choice
Which type of accounting is primarily concerned with recording and reporting the activities a company undertakes to promote the buying or selling of a product or service?
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1. Introduction to Accounting
Types of Accounting
Multiple Choice
Disintermediation involves ______.
A
combining managerial and financial accounting
B
increasing the number of financial intermediaries
C
outsourcing accounting functions to third parties
D
removing intermediaries from a financial process
Verified step by step guidance1
Understand the term 'Disintermediation': It refers to the process of removing intermediaries or middlemen from a financial transaction or process, allowing direct interaction between parties.
Analyze the options provided in the question: Each option represents a different concept, and you need to identify which aligns with the definition of disintermediation.
Option 1: 'Combining managerial and financial accounting' - This is unrelated to disintermediation, as it pertains to integrating two types of accounting practices.
Option 2: 'Increasing the number of financial intermediaries' - This is the opposite of disintermediation, as it involves adding intermediaries rather than removing them.
Option 3: 'Outsourcing accounting functions to third parties' - This involves delegating tasks to external entities, which is not the same as removing intermediaries. The correct answer is: 'Removing intermediaries from a financial process.'
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