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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 DiagramRevenue Cycle

Make Sale

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REA DiagramExpenditure Cycle

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REA DiagramPayroll Cycle

Get Time

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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

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REA Redundancies
Events and Agents
Alters the minimum cardinalities associated with the other events that are related to the merged events or agents
May be linked to either an event or agent that is part of one business cycle or to an event or agent that is part of another cycle but cannot be linked to both events or agents at the same time
The minimum cardinality associated with the other events and agents must be 0 in the integrated REA diagram
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Integrated REA Diagram

Expenditure Cycle

Revenue Cycle

Make Sale

Payroll Cycle

Get Time

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Cardinality Effect of Merging Resources

Make Sale

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!
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

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Cardinality Effect of Merging Events


Receive Inventory

The cardinality between Disburse Cash and Supplier and Employee (as payee) is now 0 and 1, that is, a disbursement can be made to the supplier or the employee but not both!

Supplier

Employees (Cashier)

Disburse Cash

Employees (as Payee)

The cardinality between Disburse Cash and Receive Inventory and Time Worked is now 0 and 1, that is, a disbursement can be made to the for Accounts Payable (Receive Inventory) or Payroll (Time Worked) but not both!

Get Time
Employees Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

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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 or agent, but cannot be linked simultaneously to all of those other events or agents, then the REA diagram should show that event A is linked to a minimum of 0 of each of those other events or agents. 18-12

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-tomany relationship.

Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

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REA to Database Steps


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.

Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

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REA to Database Steps


3. Use foreign keys to implement one-toone and one-to-many relationships.
1:1 Relationships
Choice of which table to place foreign key is arbitrary, Often if events are sequential, the foreign key is placed in the later event of the sequence,

1:M Relationships
Primary key of entity that can be linked to multiple instances of the other will become the foreign key in the other table.

Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

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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
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

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