Describe the Three Basic Rules That Apply to the REA

question 18

Essay

Describe the three basic rules that apply to the REA model pattern.

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Definitions:

Financial Ratios

Metrics derived from financial statements that evaluate a company's operational efficiency, liquidity, profitability, and solvency.

Reporting Agencies

Organizations that collect and disseminate information on individuals' or companies' financial and credit history.

Specific Calculations

Defined processes or formulas used to solve particular problems or to determine exact values within a given context.

Leverage Ratio

A financial ratio that measures the degree of an entity’s reliance on borrowed funds compared to its equity.