{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

When new inventory is taken in it also has an effect

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
lowering the recorded stock. When new inventory is taken in, it also has an effect on the event model. The third and final part to REA is known as the agents model. Individuals involved in the purchase or sale of a product are considered agents. They are differentiated from one another by being labeled as internal agents, individuals who are with the business, and external agents, individuals who conduct business transactions with the business. The REA model focuses on making the accounting system efficient. This is the main reason why the model only concentrates on the resources, the movement of those resources, and the people involved in moving those resources. Transaction records such as journal entries and postings to ledgers are excluded in this as the model relies only on direct information of the inventory. This is what causes the issue with the REA model; all businesses follow GAAP procedures which standardize the use of ledgers and balance books. Because of this, implementing the REA model would be incredibly difficult. References MUSE. (2010). Resource Events Agents Accounting Model. AIU Online. Retrieved from https://mycampus.aiu-online.com/courses/ACCT440/u5/hub1/17691.pdf
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern