Accounting Information Systems, 12e (Romney/Steinbart)
Chapter 17 The REA Data Model
1) Which of the following statements about REA modeling and REA diagrams is false?
A) REA is an acronym for Resources, Entities, and Agents.
B) REA data modeling does not include traditional accounting elements such as ledgers, chart of
accounts, debits and credits.
C) REA data modeling could be referred to as an events-based model.
D) REA diagrams must include at least two activities, which together represent a give-get economic
exchange.
2) What is the standard cardinality pattern for a relationship between an event and an agent?
A) 1:1
B) 0:1
C) 0:N
D) 1:N
3) The REA data model approach facilitates efficient operations by all the following except
A) standardizing source document format.
B) identifying non-value added activities.
C) storing financial and nonfinancial data in the same database.
D) organizing data to simplify data retrieval and analysis.
4) The process of defining a database so that it faithfully represents all aspects of the organization
including its interactions with the external environment is called
A) data modeling.
B) data designing.
C) data development.
D) data definition.
5) In which stage(s) of the database design process does data modeling occur?
A) only in the systems analysis stage
B) only in the design stage
C) in both the systems analysis and design stages
D) neither the systems analysis nor the design stages
6) A(n) ________ diagram graphically depicts a database‘s contents by showing entities and
relationships.
A) data flow
B) flowchart
C) entity-relationship
D) REA
7) On an entity-relationship (E-R) diagram, anything about which an organization wants to collect and
store information is called
A) a data model.
B) an entity.
C) a schema.
D) a tuple.
8) An entity-relationship (E-R) diagram represents entities as ________ and the relationships between
them as lines and ________.
A) circles; squares
B) squares; diamonds
C) rectangles; diamonds
D) rectangles; circles
9) An entity-relationship (E-R) diagram
A) can represent the contents of any database.
B) are only used in conjunction with REA models.
C) can show a limited number of entities and relationships.
D) are used only to design new databases.
10) The REA data model
A) is used in many areas of business and science.
B) was developed solely for use in designing accounting information systems.
C) classifies data into relationships, entities and accounts.
D) all of the above
11) Which of the following is not one of the rules in creating an REA data model?
A) Each event is linked to at least one resource that it affects.
B) Each event is linked to at least one other event.
C) Each event is linked to at least two participating agents.
D) All of the above are important rules.
12) Which is a true statement about the REA data model?
A) The REA data model classifies entities into three distinct categories.
B) The term REA is an acronym that stands for resources, entities, and agents.
C) Using an REA data model is not helpful when creating an R-E diagram.
D) The “E” in the REA data model stands for things that have an economic value to the organization.
13) An REA diagram must link every event to at least one ________ and two ________.
A) resource; agents
B) agent; resources
C) transaction; entities
D) resource; relationships
14) Each event in an REA model will in most cases have at least one ________ agent and one ________
agent involved with the event.
A) internal; resource
B) external; entity
C) internal; employee
D) internal; external
15) Relationships that affect the quantity of a resource are sometimes referred to as ________
relationships.
A) commitment
B) exchange
C) stockflow
D) duality
16) The “give” event represents an activity which
A) includes a promise to engage in future economic exchanges.
B) increases the organization’s stock of an economic resource.
C) reduces the organization’s stock of a resource that has economic value.
D) none of the above
17) The “get” event represents an activity which
A) includes a promise to engage in future economic exchanges.
B) increases the organization’s stock of an economic resource.
C) reduces the organization’s stock of a resource that has economic value.
D) none of the above
18) Which of the following statements is true about the development of an REA model?
A) Events that pertain to the entry of data are included in the REA model.
B) The objective is to model basic value-chain activities.
C) REA diagrams model individual transactions and data collections.
D) Information retrieval events are modeled as events in the REA model.
19) Developing an REA diagram for a specific transaction cycle begins by identifying
A) relevant events.
B) agents involved.
C) resources affected.
D) relationship cardinalities.
20) Which of the following is false about cardinalities?
A) Cardinalities describe the nature of the relationship between two entities.
B) No universal standard exists for representing information about cardinalities in REA diagrams.
C) The minimum cardinality can be zero or one.
D) The maximum cardinality can be zero, one, or many.
21) The minimum cardinality of a relationship in an REA diagram can be either
A) 0 or 1.
B) 0 or N.
C) 1 or N.
D) none of the above
22) The maximum cardinality of a relationship in an REA diagram can be either
A) zero or one.
B) one or many.
C) zero or many.
D) none of the above
23) How many types of relationships are possible between entities?
A) one
B) two
C) three
D) an infinite number
24) A relationship in which cardinalities have zero minimums and N maximums would most likely be an
A) agent-event relationship.
B) resource-event relationship.
C) event-event relationship.
D) All of the above are equally likely.
25) Concerning REA diagrams, which of the following is false?
A) Each organization will have its own unique REA diagram.
B) An REA diagram for a given organization will change over time.
C) Data modeling and REA diagram development involve complex and repetitive processes.
D) Redrawing an REA diagram several times during development is uncommon.
26) Data modeling is an element of
A) systems analysis.
B) conceptual design.
C) both A and B
D) none of the above
27) Which of the following graphical symbols represents a minimum cardinality of zero and a maximum
cardinality of one?
A)
B)
C)
D)
28) Which of the following graphical symbols represents a minimum cardinality of zero and a maximum
cardinality of many?
A)
B)
C)
D)
29) Which of the following graphical symbols represents a minimum cardinality of one and a maximum
cardinality of one?
A)
B)
C)
D)
30) Which of the following graphical symbols represents a minimum cardinality of one and a maximum
cardinality of many?
A)
B)
C)
D)
31) Which of the following transactions is represented by the diagram below?
A) An automobile salvage business holds weekly auctions at which it sells its entire inventory.
B) A grocery store sells products to consumers.
C) A hobbyist restores antique cars. When a car is finished, she sells it on eBay.
D) A firm sells movies to consumers through an online downloading service.
32) Which of the following transactions is represented by the diagram below?
A) An automobile salvage business holds weekly auctions at which it sells its entire inventory.
B) A grocery store sells products to consumers.
C) A hobbyist restores antique cars. When a car is finished, she sells it on eBay.
D) A firm sells movies to consumers through an online downloading service.
33) Which of the following transactions is represented by the diagram below?
A) An automobile salvage business holds weekly auctions at which it sells its entire inventory.
B) A grocery store sells products to consumers.
C) A hobbyist restores antique cars. When a car is finished, she sells it on eBay.
D) A firm sells movies to consumers through an online downloading service.
34) Which of the following transactions is represented by the diagram below?
A) An automobile salvage business holds weekly auctions at which it sells its entire inventory.
B) A grocery store sells products to consumers.
C) A hobbyist restores antique cars. When a car is finished, she sells it on eBay.
D) A firm sells movies to consumers through an online downloading service.
35) Which of the following transactions is represented by the diagram below?
A) Cash and carry consumer retail sales
B) Consumer retail sales paid in installments to the seller
C) Business to business sales of nondurable goods
D) Business that allows customers to carry a balance and make installment payments
36) Which of the following transactions is represented by the diagram below?
A) Cash and carry consumer retail sales
B) Consumer retail sales paid in installments to the seller
C) Business to business sales of nondurable goods
D) Business that allows customers to carry a balance and make installment payments
37) Which of the following transactions is represented by the diagram below?
A) Cash and carry consumer retail sales
B) Consumer retail sales paid in installments to the seller
C) Business to business sales of nondurable goods
D) Business that allows customers to carry a balance and make installment payments
38) Which of the following transactions is represented by the diagram below?
A) Cash and carry consumer retail sales
B) Consumer retail sales paid in installments to the seller
C) Business to business sales of nondurable goods
D) Business that allows customers to carry a balance and make installment payments
39) Which of the following transactions is represented by the diagram below?
A) Vendors send a bill for each inventory item purchased which is payable on receipt.
B) A single purchase of inventory is paid for with multiple payments.
C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept or allow
installment payments.
D) Some inventory purchases are paid for with multiple payments and some payments may apply to
multiple purchases.
40) Which of the following transactions is represented by the diagram below?
A) Vendors send a bill for each inventory item purchased which is payable on receipt.
B) A single purchase of inventory is paid for with multiple payments.
C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept or allow
installment payments.
D) Some inventory purchases are paid for with multiple payments and some payments may apply to
multiple purchases.
41) Which of the following transactions is represented by the diagram below?
A) Vendors send a bill for each inventory item purchased which is payable on receipt.
B) A single purchase of inventory is paid for with multiple payments.
C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept or allow
installment payments.
D) Some inventory purchases are paid for with multiple payments and some payments may apply to
multiple purchases.
42) Which of the following transactions is represented by the diagram below?
A) Each sale is associated with a single order and there is a time lag between the time an order is taken
and delivery of the product.
B) Each sale can be comprised of multiple orders and each order can be associated with multiple sales or
no sales.
C) Each sale can be comprised of multiple orders and each order can be associated with one or more
multiple sales.
D) Each sale is associated with a single order and there is no time lag between the time an order is taken
and delivery of the product.
43) Which of the following transactions is represented by the diagram below?
A) Each sale is associated with a single order and there is a time lag between the time an order is taken
and delivery of the product.
B) Each sale can be comprised of multiple orders and each order can be associated with multiple sales or
no sales.
C) Each sale can be comprised of multiple orders and each order can be associated with one or more
sales.
D) Each sale is associated with a single order and there is no time lag between the time an order is taken
and delivery of the product.
44) Which of the following transactions is represented by the diagram below?
A) Each sale is associated with a single order and there is a time lag between the time an order is taken
and delivery of the product.
B) Each sale can be comprised of multiple orders and each order can be associated with multiple sales or
no sales.
C) Each sale can be comprised of multiple orders and each order can be associated with one or more
sales.
D) Each sale is associated with a single order and there is no time lag between the time an order is taken
and delivery of the product.
45) Which of the following transactions is represented by the diagram below?
A) Each sale is associated with a single order and there is a time lag between the time an order is taken
and delivery of the product.
B) Each sale can be comprised of multiple orders and each order can be associated with multiple sales or
no sales.
C) Each sale can be comprised of multiple orders and each order can be associated with one or more
sales.
D) Each sale is associated with a single order and there is no time lag between the time an order is taken
and delivery of the product.
46) A relationship is diagrammed below using the [Min, Max] notation. Which of the diagrams below
represents the same relationship using the “crow’s fee” notation?
A)
B)
C)
D)
47) 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, would
A) include eight unique entities.
B) include nine unique entities.
C) include seven unique entities.
D) include ten unique entities.
48) 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, would
A) reflect nine 1:N relationships.
B) reflect two M:N relationships.
C) reflect ten 1:N relationships.
D) include two 1:1 relationships.
49) 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, would
A) reflect minimum cardinalities of 1 for the relationship between Vendor and Cash Disbursement
entities.
B) reflect the same number of 0 and 1 minimum cardinalities.
C) reflect more maximum cardinalities of M than of 1.
D) reflect maximum cardinalities of M for the relationship between Inventory and Purchase entities.
50) 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?
A) Purchases and Cash Disbursements
B) Booth Rental and Cash Disbursements
C) Inventory and Purchases
D) Cash and Cash Disbursements
51) 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.
Draw an REA diagram for Cosgrove Art & Antiques, related to purchasing inventory and supplies,
renting booths, and paying for all items.
52) Describe data modeling.
53) Describe an REA data model.
54) Define cardinality.
55) Describe the three basic rules that apply to the REA model pattern.
56) Describe the steps in developing an REA diagram.
57) Explain how an AIS system can be viewed as a set of “give-to-get” exchanges.
58) Define minimum and maximum cardinalities.
59) Describe the possible relationships between entities, in terms of cardinalities.
60) Explain specifically what is meant by the following statement, “Accountants can and should
participate in all stages of the database design process.”
61) A dental office employs three dentists and five dental hygienists. One of the dentists is a very recent
dental school graduate and can’t yet see patients on her own until she passes boards and obtains a
license. Dentists perform all procedures personally, except for regular cleaning and x-rays, which are
performed exclusively by dental hygienists. Three of the five dental hygienists perform only regular
cleaning and x-rays. The other two hygienists each assist a specific dentist during procedures, as well as
performing regular cleaning and x-rays. One of the hygienists will be assigned to the new dentist when
she begins seeing patients. Hygienists usually ‘shadow’ other hygienists and dentists for two weeks prior
to seeing patients.
Patients schedule appointments directly with dentists and hygienists, depending on the type of dental
service needed. Patients do not have to choose a dentist until they need service other than routine
cleaning or x-rays. Patients are assigned to a specific dental hygienist when they schedule their first
appointment. The customer master file has 549 records. Diagram the agents described, relationships
between agents, and the cardinality pairs for each relationship.