CHAPTER 19
SPECIAL TOPICS IN REA MODELING
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
19.1 Often it takes several sales calls to obtain the first order from a new customer. Why
then does Figure 19-1 depict the relationship between the Call on Customer and
Take Customer Order events as being 1:1?
When a sales person visits a customer it is represented by the event Call on Customer.
Although single sales call may be followed by many orders from a customer over time, it
19.2 How could an automobile dealer model the use of loaner cars, which it gives to
customers for free whenever they drop off a vehicle for maintenance that will take
longer than one day to complete?
The loaner car arrangement could be handled the same as rental car arrangement, except
19.3 In what situations would you expect to model a relationship between an agent and a
resource?
Relationships between agents and resources can be modeled for two reasons.
19.4 Why is depreciation not represented as an event in the REA data model?
Depreciation is not modeled as an event in the REA diagram because it is an accounting
concept that arbitrarily allocates the cost of an acquired resource to different fiscal
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Ch. 19: Special Topics in REA Modeling
19.5 How would you model the acquisition of a digital asset, such as the purchase of
software online (the software is downloaded and then installed on the purchaser’s
computer)?
There is very little difference in modeling an event where a physical resource is sold as
opposed to a digital resource. The digital asset must still be ordered, received, recorded,
19.6 How are the similarities and differences between the purchase of services, such as
telephone service, and the purchase of raw materials reflected in an REA data model?
In terms of the REA model, the two types of transactions are handled much the same. In
19.7 How would you modify the expenditure cycle REA diagram in Figure 19-4 to
include the return of defective products to suppliers for credit?
Since the supplier, inventory, and employee entities already exist on the diagram, return
of defective good to the supplier would only need one additional event entity on the
diagram. An event labeled something like “Return Defective Goods” would be added. It
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Accounting Information Systems
SUGGESTED ANSWERS TO PROBLEMS
19.1 We-Fix-Computers, Inc. provides spare parts and service for a wide variety of
computers. Customers may purchase parts to take home for do-it-yourself repairs, or they
may bring their systems in for repair, in which case they pay for both the parts and the
labor associated with the type of service required. Some services do not include any new
parts, just a labor charge for that service. Individual customers must pay for all parts
purchases in full at the time of sale. Individual customers must pay 50% down when they
bring their computers in for servicing and pay the balance at pickup. Corporate customers,
however, are billed monthly for all sales (parts or service). Although We-Fix-Computers,
Inc. has several different banking accounts, all sales are deposited intact into its main
checking account.
We-Fix-Computers, Inc. purchases its inventory of parts from more than a dozen different
vendors. Orders are usually delivered the next day; sometimes, however, suppliers ship
only partial orders. We-Fix-Computers pays for some of its purchases COD, but usually
pays by the 10th of the month for all purchases made the prior month. None of its suppliers
allows it to make installment payments.
Required
Ch. 19: Special Topics in REA Modeling
19.2 The Mesa Veterinary Hospital is run by Dr. Brigitte Roosevelt. She has two
employees in the office and has asked you to develop a database to help better track her
data. Dr. Roosevelt currently uses her personal computer only for word processing, but she
is interested in also using it to maintain pet histories and accounting information. She is
excited about the transition and is counting on you to help her through the process. She
describes her daily activities as follows:
When new customers come to Mesa Veterinary Hospital, the “owners” of the pets are required
to complete an introductory form. This form includes the following:
• Owner name
They are also required to provide the following information about each pet, as some people
own many pets:
• Pet name
Dr. Roosevelt would like to enter this information once and then have the system retrieve it for
all subsequent visits.
When customers call to make appointments, one of the office clerks asks what kind of services
You also learn that Dr. Roosevelt orders drugs and medications from several different
suppliers. She places orders weekly, on Fridays. Suppliers usually make one shipment to fill
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Accounting Information Systems
Dr. Roosevelt concludes the interview by requesting that in addition to the facts mentioned,
she wants the system to store the following attributes:
• Number of pets owned by each customer
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Ch. 19: Special Topics in REA Modeling
REQUIRED
a. Given this brief overview, draw an integrated REA diagram for the Mesa Veterinary
Accounting Information Systems
b. As directed by your instructor, either draw the tables necessary to implement the
integrated REA diagram you developed for the Mesa Veterinary Hospital or build the
tables in a relational DBMS to which you have access. Be sure to include all attributes
from the narrative plus the additional ones explicitly listed by Dr. Roosevelt at the
conclusion of the interview. Create additional attributes only if necessary.
Table Primary Key Other Attributes ( foreign keys in italics)
Services Service number Name, standard cost, list price, standard time
to perform
Drugs Drug number Drug name, standard cost, list price, beginning
quantity-on-hand
Receive
Drugs-Disburse Cash
Receiving report, Check
Number
Amount applied to invoice
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Ch. 19: Special Topics in REA Modeling
19.3 Your university hires you to implement a database system for the library network.
You have interviewed several librarians, and the following summarizes these discussions:
• The library’s main goal is to provide students and professors with access to books and
• The standard procedure for lending materials is that the student or faculty member
• Each book is assigned three unique numbers. First, the book is assigned a number by
the publisher, called the International Standard Book Number (ISBN). This number
allows the publishers to track each title and the number changes with each new edition.
• When students or faculty check out books, the system must be able to track the specific
• In general, students and faculty have equal clout in the library. Both are able to check
• When patrons check out books, they take their materials to the circulation desk. At that
time, the librarian scans in each item’s university book ID number and the borrower’s
• After borrowers check out a book, they are expected to return it by its due date. In
• When a book is returned, the return must be entered into the system, and a unique
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Accounting Information Systems
The following attributes have been identified as critical for the new system:
University book ID
Book publisher
Author name
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