Accounting Information Systems, 13e (Romney/Steinbart)
Chapter 19 Special Topics in REA Modeling
19.1 Develop REA data models for a variety of organizations besides retail stores.
1) Explicitly identifying the different employees who participate in each event by their job
functions is helpful when verifying
A) internal controls.
B) job descriptions.
C) proper supervision.
D) segregation of duties.
2) Many companies sell software, music, or digital photographs over the Internet. They provide
each customer with a digital copy of those resources, but not the actual resource itself. How will
this company’s REA model differ from those selling tangible inventory?
A) These companies do not need an Inventory table.
B) The structure of Inventory table is completely different from that of mass-produced
merchandise.
C) The Inventory table is only different in that it doesn’t need attributes such as quantity-on-
hand, quantity-available, reorder point, and standard reorder quantity.
D) The Inventory table need not include information about the standard list price of each item
and its description.
3) Sales order number is most likely to be a foreign key in which entity of an expanded revenue
cycle REA diagram?
A) Call on Customers
B) Fill Customer Order
C) Ship Order
D) Take Customer Order
4) Sales order number is most likely to be a primary key in which entity of an expanded revenue
cycle REA diagram?
A) Call on Customers
B) Fill Customer Order
C) Ship Order
D) Take Customer Order
5) Customer number is least likely to be a foreign key in which entity of an an expanded revenue
cycle REA diagram?
A) Call on Customers
B) Customers
C) Fill Customer Order
D) Take Customer Order
6) Picking ticket number is most likely to be a primary key in which entity of an expanded
revenue cycle REA diagram?
A) Call on Customers
B) Fill Customer Order
C) Ship Order
D) Take Customer Order
7) Picking ticket number is most likely to be a foreign key in which entity of an expanded
revenue cycle REA diagram?
A) Customers
B) Fill Customer Order
C) Ship Order
D) Take Customer Order
8) In an REA model, rental transactions differ from sales transactions in that
A) each rental has a part number.
B) each rental has a unique serial number.
C) rental transactions require completely different REA models than sales transactions.
D) All of the above are ways in which rental transactions differ from sales transactions.
9) Concerning the relationship from the Rent Item to the Receive Cash events: The minimum
cardinality is ________ because customers typically pay first, prior to taking possession of the
item. The maximum cardinality is ________ because there may be additional charges imposed
when the item is returned.
A) 0; 1
B) 1; 1
C) 1; N
D) N; M
10) The relationship between the Rent Item and Return Item events is most likely 1:1 for all
except which of the following reasons?
A) A return must be for a rented item.
B) A rented item can only be returned once.
C) Rented items are accounted for separately.
D) All rented items must be returned.
11) In an expenditure cycle diagram, which of the following is an example of an event that larger
organizations might want to include in their extended REA model?
A) Request
B) Order
C) Ship Order
D) Fill Order
12) Using an REA database design, which of the below is false with regards to cost data?
A) Cost information is stored in several tables.
B) Standard cost is stored as an attribute of the Inventory table because it is the same for all units
of a given inventory item for a fiscal year.
C) In contrast, the actual cost of inventory is stored in a relationship table because prices can
vary over time.
D) Actual cost can be stored as an attribute of the Inventory table for organizations that value
inventory based on the most recent amount paid.
13) Using an REA database design, which is the most likely primary key for the Inventory–
Request_Goods table?
A) Product number
B) Product number – Purchase order number
C) Product number – Purchase requisition number
D) Purchase requisition number
14) Using an REA database design, which is the most likely primary key for the Pay for Goods
table?
A) Cash transaction number
B) Check number
C) Invoice number
D) Receiving report number, check number
15) For a service business, the minimum cardinalities between Sales event and Inventory entity
are most likely both 0 for all except which of the following reasons?
A) Service businesses don’t sell inventory, they only use inventory to perform services.
B) A sale doesn’t have to include any inventory.
C) Inventory can exist that hasn’t been part of a sale yet.
D) Some services only require labor.
16) The minimum cardinality from the Sales event to the Services entity is most likely 1 because
A) every sale includes performing a service.
B) a service is only recorded once a sale has occurred.
C) only 1 service is provided for each sale.
D) The minimum cardinality would not be 1; it would most likely be 0.
17) A dental office would likely model the relationships between the Sales event and both the
Services and Supplies Resource entities as
A) M:N.
B) 1:1.
C) 1:N.
D) 0:1.
18) In a relational database, details about activities such as Cleaning, X-Rays, Fillings, Root
Canals, Crowns, and Extractions would all be stored in which table?
A) Services
B) Sales
C) Inventory
D) Those activities would be stored as part of a relationship, not a table.
19) M:N agent-event relationships occur whenever an activity is performed by ________
employee and management wants to retain the ability to monitor ________ performance.
A) more than one; group
B) more than one; individual
C) one; group
D) one; individual
20) The minimum cardinalities between a location, such as Warehouse, and a resource, like
Inventory, will likely be 0 for all except which of the following reasons?
A) One specific inventory item could be stored at several different warehouses.
B) A warehouse could be currently empty.
C) Not all kinds of inventory are stored at each warehouse.
D) Inventory could include products not yet available for sale.
21) Since the same inventory items may be stored in several different warehouses, the maximum
cardinality from Inventory to Warehouse is most likely
A) 0.
B) N.
C) 1.
D) determined by the number of warehouses compared to the number of inventory items.
22) Relationships between resources and agents, such as Inventory and Supplier, reflect the best
practice of identifying preferred and alternative suppliers for specific inventory items. Similar
relationships between resources and employees can be used to model ________ and ________.
A) cost; revenue
B) performance; behavior
C) responsibility; accountability
D) segregation of duties; internal control
23) Warehouse number is most likely to be a foreign key in
A) Order Inventory.
B) Disburse Cash.
C) Receive Inventory.
D) Inventory.
24) Supplier number is least likely to be a foreign key in
A) Order Inventory.
B) Disburse Cash.
C) Receive Inventory.
D) Warehouse.
25) Financial Institution number is most likely to be a foreign key in
A) Cash.
B) Disburse Cash.
C) Receive Inventory.
D) Warehouse.
26) The cardinality pair from the Financial Institution entity to the Cash resource has a ________
minimum and an ________ maximum because companies will probably only keep information
about financial institutions with which they have accounts but may have more than one account
at the same financial institution.
A) 0; N
B) 0; 1
C) 1; N
D) M; N
27) Supplier number is most likely to be a foreign key in
A) Inventory–Request_Inventory.
B) Receive Inventory.
C) Supplier.
D) Warehouse.
28) The temporal difference between Request Inventory and Order Inventory is reflected by the
A) Request Inventory minimum cardinality of 1.
B) Request Inventory maximum of N.
C) Order Inventory maximum of N.
D) Order Inventory minimum of 0.
29) One of the benefits of an integrated enterprise-wide data model is that
A) auditors can use it to guide the development of queries to validate the completeness and
accuracy of transaction processing.
B) journals and ledgers will be more accurate than in a traditional AIS data model.
C) workers can understand information flows better.
D) All of the above are benefits of an integrated enterprise-wide data model.
30) Which of the following diagrams represents a situation where a firm offers some services
that have not ever been sold, offers other services that have been performed many times, and
provides services sometimes performed together to clients?
A)
B)
C)
D)
31) Which of the following diagrams represents a situation where a business that rents lawn
mowers (not all of which get rented) writes separate rental agreements for each mower, so
renters don’t have to return all the rented items at the same time?
A)
B)
C)
D)
32) Which of the following diagrams represents a situation where items rented by a customer
must be returned intact, and several rented items could be returned at the same time?
A)
B)
C)
D)
33) Which of the following diagrams represents a situation where deliveries are frequently made
to the specific warehouse where the delivered goods will be stored?
A)
B)
C)
D)
34) Which of the following diagrams represents a situation where one or more warehouses may
be empty, and production of new products has been delayed due to difficulty obtaining
materials?
A)
B)
C)
D)
35) Which of the following diagrams represents the cardinality pairs in a situation where goods
don’t have to be requisitioned, but if they are, requisitions are approved and processed before
purchase orders are issued?
A)
B)
C)
D)
36) Which of the following diagrams represents the cardinality pairs in a situation where
customer orders are individually filled, but not all the items on a customer order are always
available?
A)
B)
C)
D)
37) Give an example of an M:N Agent-Event relationship.
38) Why might an REA diagram show relationships between resources and agents?
39) Why is cost information stored in several relational tables?
40) Identify the business activity below that cannot be modeled using an REA diagram.
A) purchase requisitions
B) rental transactions
C) intangible assets
D) All of the above can be modeled by an REA diagram.
41) In which entity would an item’s standard cost information most likely be maintained?
A) Inventory entity
B) Order_Inventory entity
C) Inventory-Order_Inventory entity
D) none of the above
42) In which entity would an item’s actual cost information most likely be maintained?
A) Inventory entity
B) Order_Inventory entity
C) Inventory-Order_Inventory entity
D) none of the above
43) Identify the inventory valuation method below that cannot be calculated in a database created
using an REA modeling approach.
A) LIFO
B) FIFO
C) Weighted Average
D) none of the above
44) If the actual cost of an inventory item is maintained as an attribute in the Inventory table,
which inventory valuation method would an organization have to use?
A) LIFO
B) FIFO
C) Weighted Average
D) Specific Identification
45) True or False: An organization that sells digital products, such as access to view online
videos, does not need an inventory table in its database.
46) Assume an organization sells digital photographs to customers through its website (the
company only sells photographs in digital format, it does not provide a physical copy of any
photograph). Identify the attribute below that the organization would not need in its Inventory
entity.
A) reorder point
B) price
C) photograph description
D) primary key
47) In addition to modeling Resources, Events, and Agents, identify the two additional concepts
an organization will need to incorporate if it wishes to extend the REA to include information
about firm policies.
A) Type and Rules
B) Rules and Group
C) Group and Rules
D) None of the above
48) A type entity is used to depict the following relationship.
A) is-a-kind-of
B) is-a-member-of
C) is-a-piece-of
D) is-a-group-of
49) A groups entity is used to depict the following relationship.
A) is-a-kind-of
B) is-a-member-of
C) is-a-piece-of
D) is-a-group-of
50) Type and group entities are similar in that both are abstractions that represent sets of
A) objects.
B) semantics.
C) attributes.
D) all of the above
51) The attributes of which type of entity would provide a way for the system to compare an
employee’s reimbursement request with the permissible range of the amount of reimbursement
permitted?
A) Resources
B) Events
C) Agents
D) Type
52) The textbook explicitly identifies ________ as situation where a properly designed database
can yield tax benefits.
A) meal and entertainment expenses
B) salary expenses
C) travel expenses
D) depreciation expenses