Question

How do digital assets affect the REA model of the revenue cycle?

A. The Inventory table includes quantity-on-hand.
B. The structure of the Inventory table is almost identical to that of mass-produced merchandise.
C. The Inventory table includes standard reorder quantity.
D. The Inventory table does NOT include the standard list price of each item.

Answer 1

Digital assets can affect the REA model of the revenue cycle by influencing the Inventory table, its structure, and the inclusion of standard list prices for items.

Step-by-step explanation:

The inclusion of digital assets affects the REA model of the revenue cycle in several ways. One of the impacts is on the Inventory table. The Inventory table may include additional fields related to digital assets, such as the quantity-on-hand of digital goods. This allows businesses to track and manage their digital inventory alongside physical goods.

Another impact is on the structure of the Inventory table. While the structure of the Inventory table for mass-produced merchandise is almost identical, digital assets may require a different structure to account for their unique characteristics.

However, the Inventory table may not include the standard list price of each item for digital assets. This is because digital goods often have different pricing models, such as subscriptions, licenses, or pay-per-use models, which may not have a fixed list price.