Accounting Information Systems (14th Edition)
Accounting Information Systems (14th Edition)
14th Edition
ISBN: 9780134474021
Author: Marshall B. Romney, Paul J. Steinbart
Publisher: PEARSON
Question
Book Icon
Chapter 18, Problem 1CQ
To determine

Identify the correct option for the given statement.

Expert Solution & Answer
Check Mark

Answer to Problem 1CQ

Option “d”

Explanation of Solution

REA Diagram: REA (Resources, events, agents) diagram is a technique used to establish the relationship between resource, events and agents. This diagram is used to understand accounting transactions occurring in the business entity.

Modelling of business cycle makes it easier to identify the all relevant resources, events and agents for each business cycle. The relationship between the entities is prepared when the resources, events and agents are identified. At the same time, it is easier to assign the relationships in REA diagrams for a single business cycle, because it directly represents the business policies of organization. Hence, all type of entities (resources, events, and agents) are separated in different table for easy identification.

From the above explanation it is clear that “option a, b and c” are incorrect options and option “d” is a correct answer.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education