When Merging Redundant Resource Entities into a New REA Diagram

question 64

Multiple Choice

When merging redundant resource entities into a new REA diagram,

• A)Common resources are placed between the events that affect them.
• B)Each resource is connected to two agents that either increase or decrease it.
• C)Resources are duplicated to show the give and get of economic duality relationships.
• D)None of the above.

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Definitions:

Operating Assets

Assets used in the daily operations of a business to generate income, such as equipment, inventory, and accounts receivable.

Division ROI

Return on Investment for a specific division or segment within a company, measuring profitability in relation to its operating assets.

Variable Expenses

Expenses that change in proportion to the activity of a business.

Fixed Costs

Operating expenses that stay constant regardless of changes in the level of output or sales volume, like leases and salaries.