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Implementing an REA Model in a Relational Database

Implementing an REA Model in a Relational Database. Chapter 18. 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.

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Implementing an REA Model in a Relational Database

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  1. Implementing an REA Model in a Relational Database Chapter 18

  2. 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.

  3. 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)

  4. 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.

  5. 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

  6. 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

  7. Key Term Concatenated keys

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