Cosgrove Art & Antiques sells unique art and antiques exclusively at antique shows.Cosgrove purchases inventory from individuals and other dealers at garage sales,flea markets,antique malls,and estate sales.Each time Cosgrove makes a purchase,she records the person's name,address,date,specific items purchased and price paid,and total amount spent.Later at home,Cosgrove cleans,researches and prices the inventory items.She assigns an inventory number to each item and records the "asking" price.Cosgrove buys price tags and display supplies from a company that sells at flea market and antique shows.All inventory and supplies purchases are paid immediately with cash,or with checks from a bank account in the business' name,to which sales are also deposited.Several times a year Cosgrove rents a booth at an antique show.A deposit is always required,with the balance due at the start of the show.Cosgrove records the deposit and final payment,along with the show organizer's name and address,in the same worksheet on which purchases of inventory and supplies are recorded. A well-planned and correctly drawn REA diagram for Cosgrove Art & Antiques,related to purchasing inventory and supplies,renting booths,and paying for all items,what entities would reflect economic duality?

Question

Quizplus · Accepted Answer

Purchases and Cash Disbursements reflect economic duality because they involve the exchange of goods and services (purchases) for money (cash disbursement), which results in a decrease in the business's cash balance. Booth rental and Inventory purchases do not involve economic duality as they do not result in a decrease in the business's cash balance. Cash and Cash disbursements are not entities but rather accounts that reflect the flow of cash in the REA model.

Cosgrove Art & Antiques Sells Unique Art and Antiques Exclusively