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Expenditure Cycle for Fred's Train Shop In order for Fred to sell trains and train accessories, he first needs to have inventory to sell. Thus, as...

The basic REA template includes links between two events and links between events and resources and between events and agents. Why do you think the basic REA template does not include direct links between (a) two resources, (b) two agents, or (c) between resources and agents?

Expenditure Cycle for Fred’s Train Shop In order for Fred to sell trains and train accessories, he first needs to have inventory to sell. Thus, as part of his overall engagement, Paul Stone has also prepared an REA model for the expenditure cycle of Fred’s Train Shop. The following paragraph describes the expenditure cycle business processes of Fred’s Train Shop: Fred deals with more than one supplier and often places orders for multiple items at the same time. Fred takes inventory and places orders every Monday. Fred’s suppliers strive to provide outstanding service. Therefore, they never consolidate multiple orders into one shipment, but always ship merchandise the day after receiving an order. Usually, Fred’s suppliers can fill his entire order in one shipment. Occasionally, however, a supplier may be temporarily out of stock of a particular item. In such cases, the supplier ships as much of the order as possible and then ships the out-of-stock item separately as soon as it becomes available. Fred pays for each order in full at one time; that is, he does not make partial payments on orders received. Some suppliers offer discount terms for early payments; Fred always takes advantage of such offers, paying individual invoices, in full, on the appropriate date. Suppliers who do not offer such discounts send Fred monthly statements listing all orders placed the prior month. Fred pays the entire balance indicated on the statement in one check by the specified due date.
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Question: The basic REA template includes links between two events and links
between events and resources and between events and agents. Why do you
think the basic REA template does not include...

Sign up to view the full answer

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