Integrating Separate REA Diagrams into a Single Comprehensive Enterprise-Wide Model

question 34

Multiple Choice

Integrating separate REA diagrams into a single comprehensive enterprise-wide model of the organization requires understanding what the ________ in each separate diagram reveal about the organization's business policies and activities.

• A)cardinalities
• B)data
• C)events
• D)transactions

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, indicating how much contributes to covering fixed costs and generating profit.

Variable Expenses

Costs that change in proportion to the activity of a business, such as sales commissions or raw materials.

Net Operating Income

is the total profit of a company after operating expenses are subtracted from revenue but before deducting interest and taxes.

Break-Even Sales

The amount of sales revenue required to cover all fixed and variable costs, resulting in zero net income or loss.