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Chapter 18
Implementing an REA Model in a Relational Database
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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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REA Diagram—Revenue Cycle
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REA Diagram—Expenditure Cycle
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REA Diagram—Payroll Cycle
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REA Redundancies
 Separate REA for an organization will have redundant entities
 Resource
 Each resource entity must be connected to:
 The resource entity is linked to event entities in one business cycle
and to event entities in the other cycle
 One event that increases the resource and,
 One event that decreases the resource
 No effect on cardinality
 Events
 Alters the minimum cardinalities associated with the other events
that are related to the merged event
 May be linked to either an event that is part of one business
cycle or to an event that is part of another cycle but cannot be
linked to both events
 The minimum cardinality associated with the other events
must be 0 in the integrated REA diagram
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Payroll Cycle
Revenue Cycle
Expenditure Cycle
Integrated REA Diagram
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Cardinality Effect of Merging
Resources
Cardinalities between resource and entities remain the same.
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Cardinality Effect of Merging Events
The cardinality between Disburse Cash and Supplier and Employee (as
payee) is now 0 to 1, that is, a disbursement can be made to the supplier
or the employee but not both!
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Rules for Creating Integrated REA
Diagram
1.
Every event must be linked to at least one resource.
2.
Every event must be linked to two agents who participate
in that event.
3.
Every event that involves the disposition of a resource must
be linked to an event that involves the acquisition of a
resource.
4.
Every resource must be linked to at least one event that
increments that resource and to at least one event that
decrements that resource.
5.
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 those other events.
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Using REA Diagram to Create
Relational Database
 Advantage:
 Ensures the elimination of anomalies:
 Update
 Insert
 Delete
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REA to Database Steps
1. Create a table for each distinct entity in the diagram and for
each many-to-many relationship.
2. Assign attributes to appropriate tables.
Identify primary keys:
 Attributes that uniquely identifies each record.
 For M:N relationships the primary key consists of two attributes
that represent the primary keys of each entity linked in that
relationship.
 Identify remaining attributes for table.

3. Use foreign keys to implement one-to-one and one-to-many
relationships.

An attribute of one entity that is itself the primary key of another
entity.
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Retrieving Information from REA
Database
 Journals
 Information contained in event tables
 Ledgers
 Information contained in resource tables
 Financial statements
 Information contained in resources and
 Information on imbalances
 Accounts receivable
 Sales transactions for which customer payments have not
yet been received
 Accounts payable
 Purchases from suppliers that have not yet been paid for
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