Chapter 19, Problem 1CQ

To determine

Identify the option that represents the get side of the give-to- get economic exchange for a business that rents equipment and machinery.

Answer to Problem 1CQ

Option d

Explanation of Solution

REA data model: REA model is designed for AIS database. It is a model that is focused on the business semantics underlying organization value chain activities. REA model contains information about three fundamental types of entitles: resources, events and agents.

Justification for the incorrect answer:

Option a:

Rent equipment is a give event for the company as the equipment is given to other for rent by the company it will not be treated as get event.

Option b:

Receive cash is one of the component of the get event for the equipment rented, but while providing an equipment for rent there incurs two get events they are return rented equipment and receive cash.

Option c:

Return rented equipment is one of the components of the get event for the equipment rented, but while providing equipment for rent there incurs two get events they are return rented equipment and receive cash.

Justification for the incorrect answer:

Option d:

Return rented equipment and receive cash are the get event for the equipment rented, because while renting an equipment the company will receive equipment from the person in future  to whom it is rented along with cash as an economic exchange for business.

Conclusion

Therefore, from the above explanation it is observed that Option d is the correct answer and other options a, b and c are incorrect answer.