Accounting information system an overview 9e bodnar and hopwood 2015 chapter 18

Implementing an REA Model in a Relational Database Chapter 18 Copyright © 2015 Pearson Education, Inc 18-1 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 Copyright © 2015 Pearson Education, Inc 18-2 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) Copyright © 2015 Pearson Education, Inc 18-3 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 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 of each of those agents Copyright © 2015 Pearson Education, Inc 18-4 Using an REA Diagram to Build a Relational Database • • Create tables for each distinct entity and M:N relationship Assign attributes to each table • Use foreign keys to implement 1:1 and 1:N relationships ▫ ▫ Identify primary keys Concatenated keys for M:N relationship table Copyright © 2015 Pearson Education, Inc 18-5 Deriving Accounting Information from REA Diagram • Journals • Ledgers • Financial statements • Management reports ▫ Information contained in event tables ▫ Information contained in resource tables (increment and decrements of events) ▫ Information contained in resources and events using a set of queries ▫ Financial and nonfinancial information Copyright © 2015 Pearson Education, Inc 18-6 Key Term • Concatenated keys Copyright © 2015 Pearson Education, Inc 18-7 ... (increment and decrements of events) ▫ Information contained in resources and events using a set of queries ▫ Financial and nonfinancial information Copyright © 2015 Pearson Education, Inc 18- 6 Key... © 2015 Pearson Education, Inc 18- 5 Deriving Accounting Information from REA Diagram • Journals • Ledgers • Financial statements • Management reports ▫ Information contained in event tables ▫ Information. .. and reduced in the sales cycle) ▫ Merging redundant event entities (e.g., disburse cash event appears in the expenditure cycle and the payroll cycle) Copyright © 2015 Pearson Education, Inc 18- 3