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CHAPTER 18
IMPLEMENTING AN REA MODEL IN A RELATIONAL DATABASE
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
18.1 How would the process of generating a cash disbursements journal from the REA
data model presented in Figure 18-4 and Table 18-1 differ from the process for
creating a sales journal?
The steps required to create a cash disbursements journal would be simplier than the
The information typically recorded in a cash disbursements journal includes the date,
Thus, the information necessary to produce a cash disbursements journal can be found by
18.2 Why take the time to develop separate REA diagrams for each business cycle if the
ultimate objective is to combine them into one integrated enterprise-wide data
model? Why not just focus on the integrated model from the start?
One way to think about it is divide and conquer. Modeling each business cycle
individually makes it easier to be sure to identify all the relevant resources, events, and
It is also easier to assign cardinalities to relationships in REA diagrams for a single
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©2018 Pearson Education, Inc.
Ch. 18: Implementing an REA Model in a Relational Database
18.3 Building separate tables for every relationship (1:1, 1:N, and M:N) does not violate
any of the rules for building a well-structured database. Why then do you think that
REA data modelers recommend building separate tables only for M:N relationships
and using foreign keys to implement 1:1 and 1:N relationships?
To reduce the number of tables. It is more efficient to use foreign keys for relationships
than to build separate tables.
This also simplifies queries because fewer tables are needed to retrieve information.
Consider the task of generating a list of payments received from a particular customer. If
the 1:N relationship between customers and the Receive Cash event is implemented using
18.4 Assume that there exists a 1:1 relationship between the Receive Inventory and
Disburse Cash events. How does the manner in which the relationship between the
two events is implemented (i.e., in which table a foreign key is placed) affect the
process used to record payments made to suppliers?
If the primary key of the Receive Inventory table was included as a foreign key in the
Disburse Cash table, then recording payments to suppliers would involve adding a new
18.5 Refer to Figure 18-4 and Table 18-1. How would you determine the amount of cash
that Fred’s Train Shop has at any point in time?
To calculate the amount of cash that Fred’s Train Shop has at a particular point in time,
you would need to query three tables: Cash, Disburse Cash, and Receive Cash. The Cash
table would include the cash on hand at the beginning of the current fiscal year. The
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©2018 Pearson Education, Inc.
Accounting Information Systems
18.6 Why does Figure 18-4 show only one cash disbursement entity if Fred’s Train Shop
uses a general operating checking account for purchases of inventory, supplies, and
operating expenses such as rent but also uses a separate checking account for
payroll?
REA models do not represent actual physical accounts but types of accounts. Thus, even
though Fred’s Train Shop uses two checking accounts, the REA displays a single entity
for cash. This entity contains information about all of Fred’s individual checking
Then, when there is a cash disbursement it would be linked to the specific record or row
in the cash table that represented which of the two checking accounts for Fred’s Train
18.7 Examine Figure 18-4 and Table 18-1. Why do the Inventory, Customers, and
Suppliers tables all have an attribute that contains data about the balance at the
beginning of the current fiscal period?
The reason that all three entities contain an attribute that stores the beginning balance is
that the related event tables typically contain information for only the current year. Thus,
the beginning balance attribute represents information about prior years’ events.
This information about beginning balances is needed in order to calculate current
balances at any point in time. For example, the Inventory table would show the quantity
The Customer and Supplier tables contain information about the beginning balances of
Accounts Receivable and Accounts Payable for specific customers and suppliers,
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©2018 Pearson Education, Inc.
Ch. 18: Implementing an REA Model in a Relational Database
SUGGESTED ANSWERS TO THE PROBLEMS
18.1 Refer to Problems 17.1 and 17.2 for information about the revenue and expenditure
cycle activities for Joe’s ice-cream shop in order to draw an integrated REA
diagram of both cycles.
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Accounting Information Systems
18.2 Develop a set of tables to implement the integrated REA diagram you developed in
Problem 18.1 for Joe’s ice-cream shop in a relational database. Specify a primary
key for each table, and suggest at least one other attribute that should be included in
each table.
Table Primary key Other attributes foreign keys in italics
Employees Employee# Name, date hired, salary, position
Vendors Vendor# Name, address, beginning account balance
Inventory-Inventor
y
Item#
Sales-Inventory Invoice#, Item# Quantity, UnitPrice
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©2018 Pearson Education, Inc.
Ch. 18: Implementing an REA Model in a Relational Database
16.3 Refer to Problems 17.3 and 17.4 for information about Sue’s
Gallery’s revenue and expenditure cycle activities in order to draw
an integrated REA diagram of both cycles.
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©2018 Pearson Education, Inc.
Accounting Information Systems
16.4 Develop a set of tables to implement the integrated REA
diagram you developed in Problem 18.3 for Sue’s Gallery in a
relational database. Specify a primary key for each table, and
suggest at least one other attribute that should be included in
each table.
Table Primary key Other attributes foreign keys in italics
Vendor Vendor# Name, address, phone, contact, account balance
GLAccount#
Customer Customer# Name, address, beginning balance
Note: The cost and sales price are attributes of the inventory table because each unique
item is only purchased once and sold once.
16.5 The following tables and attributes exist in a relational database:
Table Attributes
Vendor Vendor#, name, street address, city, state
Inventory Receipts – Cash
Disbursed
Check#, receiving report#, amount applied to invoice
Draw an REA diagram for this database. State any additional assumptions you need
to make about cardinalities.
The solution appears on the following page. Students should be able to suggest adding
the entities connected by dotted lines, even though they are not listed in the problem. Key
assumptions about cardinalities include the following:
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©2018 Pearson Education, Inc.
Ch. 18: Implementing an REA Model in a Relational Database
Vendors do not make partial shipments. If you assume otherwise, then the cardinality
The inventory in question is not unique one-of-a-kind items. If it were, the maximum
The existence of an Inventory Receipts – Cash Disbursed table with an attribute in it
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©2018 Pearson Education, Inc.
Accounting Information Systems
18.6 Refer to Problems 17.8 and 17.9 for information about the revenue and expenditure
cycles for the Computer Warehouse and use that information to draw an integrated
REA diagram for both cycles.
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©2018 Pearson Education, Inc.
Ch. 18: Implementing an REA Model in a Relational Database
18.7 Develop a set of tables to implement the integrated REA diagram you developed in
Problem 17.6 for the Computer Warehouse in a relational database. Specify a
primary key for each table, and suggest at least one other attribute that should be
included in each table.
Table Primary key Other attributes (foreign keys in italics)
Vendor Vendor# Name, address, phone, contact
Employees Employee# Name, date hired, salary, date of birth,
position
Receive
Inventory-Inventor
y
Receiving Report#,
Item#
Quantity, condition
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©2018 Pearson Education, Inc.
Accounting Information Systems
18.8 Explain how to calculate the total amount of accounts payable:
Total Accounts Payable can be calculated in five steps, as follows:
Step 1: Normally, only orders actually received are considered purchases for purposes of
Step 2: Query the Order Inventory – Inventory table to determine the total amount
Step 3: Retrieve the total beginning balance of Accounts Payable by querying the
Step 4: Query the Disburse Cash table to calculate the total amount paid to suppliers this
Step 5: Total Accounts Payable = Answer to Query 2 + Answer to Query 3 – Answer to
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