When Developing an REA Model

question 39

Multiple Choice

When developing an REA model:

• A) Accounting artifacts are represented as support events
• B) The same resource is both increased and decreased by the duality association
• C) Link tables are explicitly depicted
• D) events are organized in sequence of occurrence

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Definitions:

Liquidity

The ability of an entity to quickly convert its assets into cash or to pay off its current liabilities.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects money owed from its customers over a period.

Average Collection Period

The average amount of time that it takes for a business to receive payments owed by its clients in terms of receivables.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.