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Accounting Information Systems
17-13
Take
Customer
Order
Sale
In this scenario, each sale can be comprised of multiple orders and each order can be
associated with multiple sales. Thus, we have here a situation where the selling
company batches orders and only ships periodically – e.g., with restaurants, suppliers
may take orders daily but fill them only on Mondays and Thursdays. Moreover,
suppliers may occasionally run out of some items, requiring multiple deliveries
(sales) to fill a specific order.
i.
Inventory Sale
j.
Ch. 17: Database Design using the REA Data Model
Sales
Take
Customer
Order
Accounting Information Systems
17-15
17.7 Model the cardinalities of the following business policies:
a. The relationship between the Sale and Receive Cash events for installment sales.
Sales Receive Cash
b. The relationship between the Sale and Receive Cash events at a convenience
store.
c. The Take Customer Order–Sale relationship in a situation when occasionally
several shipments are required to fill an order because some items were out of
stock.
The solution presented here presumes that one sale (order fulfillment event) can be
linked to multiple orders, with occasional partial deliveries because items need to be
back ordered.
Ch. 17: Database Design using the REA Data Model
17-16
d. The Sale-Inventory relationship for a custom homebuilder.
This solution assumes that customers only purchase one home at a time. This is likely
to be the case for custom homes. Situations in which an investor purchases multiple
homes from a builder are most likely going to involve “tract” homes (e.g., several
homes that follow a standard floor plan).
e. The relationship between the Sale and Receive Cash events for Dell computers,
which requires customers to pay the entire amount of their purchase in advance,
prior to Dell shipping the merchandise.
Sales Receive Cash
f. The relationship between the Sale and Receive Cash events for a retail store that
has some in-store sales paid in full by customers at the time of the sale but that
also makes some in-store sales to customers on credit, billing them later and
permitting them to make installment payments.
This solution assumes that customers also occasionally pay for multiple sales with
Accounting Information Systems
17-17
h. The relationship between the Call on Customers event (i.e., the visit by a
salesperson to a potential customer) and the Take Customer Order event for a
business that is only conducted door-to-door (e.g., kitchen knives, certain books,
etc.) so that the only way to order the items is when a salesperson visits the
customer. (Hint: do you think every call results in an order?)
Call on Customers Take Customer
Order
j. The relationship between the Receive Inventory and Disburse Cash events for a
company which receives monthly bills from its suppliers for all purchases made
the previous month; some suppliers require payment of the entire bill, in full,
within 30 days or they will not accept any subsequent orders, but other suppliers
accept installment payments.
Receive Inventory Disburse
Cash
Ch. 17: Database Design using the REA Data Model
17.8 The Computer Warehouse sells computer hardware, software, and supplies (such as
paper). Individual customers just walk into the store, select merchandise, and must
pay for their purchases in full before leaving the store. Corporate customers,
however, call in orders in advance, so that the items are waiting to be picked up.
Draw an REA Diagram for Computer Warehouse revenue cycle, complete with
cardinalities.
Accounting Information Systems
17-19
17.9 The Computer Warehouse purchases its inventory from more than a dozen
different vendors. Orders are placed via telephone, fax, or on the supplier’s Web
site. Most orders are delivered the next day. Most orders are filled completely in one
shipment, but sometimes a supplier is out of stock of a particular item. In such
situations, the bulk of the order is shipped immediately and the out-of-stock item is
Draw an REA Diagram for Computer Warehouse expenditure cycle, complete with
cardinalities.
Ch. 17: Database Design using the REA Data Model
17-20
17.10 Stan’s Southern Barbeque Supply Store orders mass-produced barbecue products
from various suppliers. Stan’s maintains information about a contact person at each
supplier along with all required address information. Each purchase order has the
order number, date, tax, and total. Purchase orders also contain the following
information for each product ordered: stock number, description, and price. The
manager of Stan’s places orders by fax several times a day, whenever he notices that
Draw an REA Diagram for Stan’s Southern Barbecue expenditure cycle, complete
with cardinalities
Inventory Order Inventory
Employee
Vendor
Accounting Information Systems
17-21
SUGGESTED ANSWERS TO THE CASES
17.1 Sparky’s Amusement Park is an entertainment park run by recent college
graduates. It caters to young people and others who are young at heart. The owners
are very interested in applying what they have learned in their information systems
and marketing classes to operate a park better than any other in the area. To
roller coaster and the merry-go-round) for no extra charge. The owners, however,
want to track the rides each guest takes and the attractions the guests use. They plan
to have guests swipe their membership card through a computerized card reader,
which automatically enters information into the computer system. This should allow
the owners to gather data about the following:
• Number of people who use each piece of equipment. (How many people rode the
Ferris wheel today?)
Draw an REA diagram for Sparky’s revenue cycle only. Be sure to include
cardinalities. State any assumptions you had to make.
(This problem is adapted from one developed for classroom use by Dr. Julie Smith David at Arizona
State University.)
The entities of interest include the equipment, cash accounts, the events of running the
rides and collecting cash, the guests, and the employees.
Ch. 17: Database Design using the REA Data Model
17-22
The suggested REA diagram solution is as follows:
Equipment Give Ride
Employee
The relationships of interest are those shown in the REA diagram. Most cardinalities are
standard, except for the following:
• The “Give Ride” event involves running one particular piece of equipment. This
solution assumes that attractions are run (e.g., the Ferris Wheel is turned on) at
regular intervals, even if no customers happen to be on it. If, however, an attraction is
only run if there is at least one customer who wants to go on that ride, then the
diagram would have to be modified to show that each “Give Ride" event is linked to
at least one customer.
Accounting Information Systems
