Accounting Information Systems
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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 simpler than the
process used to create a sales journal. A cash disbursements journal typically lists all of
an organization’s payments to its various suppliers (payroll disbursements are usually
recorded separately from payments to suppliers).
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
agents for that cycle. Once the resources, events, and agents have been identified, the
relationships between these entities can be prepared.
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.
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
row to the Disburse Cash table.
Accounting Information Systems
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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
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
Ch. 18: Implementing an REA Model in a Relational Database
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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.
Accounting Information Systems
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.
Employees
Order Inventory
Inventory
Sales
Employee
Ch. 18: Implementing an REA Model in a Relational Database
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
Order Inventory
Purchase Order#
Date, vendor#, employee#
Disburse Cash
Check#
Inventory
Item#
Description, beginning quantity on hand, list
price
Cash
GLAccount#
Account Name, beginning balance
Sales
Invoice#
Date, customer#, employee#, amount
Receive Cash
Remittance#
Date, customer#, employee#, invoice#,
GLAccount#
Order Inventory-
Inventory
PurchaseOrder#,
Item#
Quantity, UnitCost
Receive Inventory-
Inventory
ReceivingReport#,
Item#
Quantity, condition
Sales-Inventory
Invoice#, Item#
Quantity, UnitPrice
Accounting Information Systems
18-7
18.3 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.
Employees Purchases Inventory Sales Employee
Ch. 18: Implementing an REA Model in a Relational Database
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18.4 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
Other attributes foreign keys in italics
Vendor
Name, address, phone, contact, account balance
Employees
Name, date hired, salary, date of birth, position
Purchases
Date, employee#, vendor#
Disburse Cash
Inventory
Purchase order#, invoice#, cost, sales price,
description
Cash
Account name, beginning balance
Sales
Date, amount, employee#, customer#, invoice#,
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.
Accounting Information Systems
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18.5 The following tables and attributes exist in a relational database:
Table
Attributes
Vendor
Vendor#, name, street address, city, state
Purchases
P.O.#, date, amount, vendor#, purchasing agent#
P.O.#
Cash Disbursed
Check#, date, amount
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:
Ch. 18: Implementing an REA Model in a Relational Database
Inventory Purchases Employee
Accounting Information Systems
18-11
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.
Employee
Order Inventory
Inventory
Sales
Employee