Combining REA Diagrams for Individual Transaction Cycles into a Single,enterprise-Wide

question 57

Multiple Choice

Combining REA diagrams for individual transaction cycles into a single,enterprise-wide model adds two more rules to the three basic principles for drawing REA diagrams.Which of the following is not one of those two new rules?

• A) Every resource must be linked to at least one event that increments that resource and to at least one event that decrements that resource.
• B) If a specific event can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the minimum cardinality between that event and every other event with which it may be associated must be 0.
• C) If a specific event can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the maximum cardinality between that event and every other event with which it may be associated must be 0.
• D) All of the above are new rules for drawing integrated REA diagrams.

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Definitions:

Damages

A monetary compensation awarded to a person as restitution for loss or injury caused by the unlawful acts or negligence of another party.

Dissociating Member

An individual who is leaving or has left a partnership or limited liability company (LLC), and hence is severing ties with the entity.

LLC

A Limited Liability Company is a type of business organization that merges the benefit of pass-through taxation seen in partnerships or sole proprietorships with the advantage of limited liability found in corporations.

Capital Injection

A capital injection is the infusion of funds into a business by its owners or external parties, often to shore up its financial health or expand operations.