Chapter 18 18 1 Learning Objectives Integrate separate REA diagrams for individual business cycles into a single comprehensive organizationwide REA diagram Build a set of tables to implement an REA model of an AIS in a relational database ID: 718105
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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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