Which of the Following Statements About the REA Model Is

question 28

Multiple Choice

Which of the following statements about the REA model is incorrect?

• A)The REA model emphasises the recording of debits and credits within a relational database environment
• B)The REA provides a structured approach for modelling business processes
• C)The REA model consists of resources,events,and agents.
• D)The REA model provides a template for a data model that can be applied in an accounting information system.

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Definitions:

Equity Method

An accounting technique used when an investing company holds significant influence over the investee but does not have full control over it, involving the recognition of income on the investment based on the investee’s net income.

Unrealized Profits

Profits that have been earned but not yet realized through a transaction, such as an increase in value of an asset that has not been sold.

Intercompany Sales

Transactions involving the exchange of goods or services between subsidiaries within the same parent company.

Mark-Up

The amount added to the cost price of goods to cover overhead and profit, resulting in the selling price.