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Accounting Information Systems

10th Edition
Hall + 1 other
ISBN: 9781337619202

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BuyFindarrow_forward

Accounting Information Systems

10th Edition
Hall + 1 other
ISBN: 9781337619202
Textbook Problem

How are external and internal agents modeled in REA diagrams for transactions that involve purely internal exchanges, such as raw material moving into production?

To determine

Explain modeling of internal and external agents in REA diagram involving purely internal exchange transaction.

Explanation

REA Diagram:

REA 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

REA diagram represents an economic event which involves association of internal and external agents and their respective economic resources. But, in an internal transaction it is difficult to distinguish the role of internal and external agent as the goods are not sold to outside customer but are transferred from one department to other...

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