Transcript Implementing an REA Model in a Relational Database

Implementing an REA Model in a
Relational Database
Chapter 18
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Learning Objectives
• Integrate separate REA diagrams for individual
business cycles into a single, comprehensive
organization-wide REA diagram.
• Build a set of tables to implement an REA model
of an AIS in a relational database.
• Explain how to write queries to retrieve
information from an AIS relational database
built according to the REA data model.
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Combining REA Diagrams
• Individual REA diagrams can be combined to
form an integrated REA diagram by:
▫ Merging redundant resource entities (e.g.,
inventory is acquired in expenditure cycle and
reduced in the sales cycle)
▫ Merging redundant event entities (e.g., disburse
cash event appears in the expenditure cycle and
the payroll cycle)
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Integrated REA Diagram Rules
• Every event must be linked to at least one resource.
• Every event must be linked to two agents who participate in that
event.
• Every event that involves the disposition of a resource must be
linked to an event that involves the acquisition of a resource
(give-get exchange).
• Every resource must be linked to at least one event that
increments that resource and to at least one event that
decrements that resource.
• If event A can be linked to more than one other event, but cannot
be linked simultaneously to all of those other events, then the
REA diagram should show that event A is linked to a minimum
of 0 of each of the other events.
• If an event can be linked to any one of a set of agents, then the
ERA diagram should show that event is linked to a minimum of
0 of each of those agents.
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Using an REA Diagram to Build a
Relational Database
• Create tables for each distinct entity and M:N
relationship
• Assign attributes to each table
▫ Identify primary keys
▫ Concatenated keys for M:N relationship table
• Use foreign keys to implement 1:1 and 1:N
relationships
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Deriving Accounting Information from
REA Diagram
• Journals
▫ Information contained in event tables
• Ledgers
▫ Information contained in resource tables
(increment and decrements of events)
• Financial statements
▫ Information contained in resources and events
using a set of queries
• Management reports
▫ Financial and nonfinancial information
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Key Term
• Concatenated keys
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