© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart1 of 121 C HAPTER 16 Implementing an REA Model in a Relational Database

© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart2 of 121 Employees (Supervisor) Order Inventory Employees Suppliers Inventory Call on Customer Take Cust. Order Employees (Salesperson) Customer Employees (Salesperson) Sales Receive Inventory Customer Suppliers Employees (Cashier) Receive Cash Employees (Cashier) Disburse Cash Cash Employee Time Time Worked Employees (as Payees) The revenue cycle appears in yellow.

© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart3 of 121 IMPLEMENTING AN REA DIAGRAM IN A RELATIONAL DATABASE The three steps to implementing an REA diagram in a relational database are: –Create a table for: Each distinct entity in the diagram. Each many-to-many relationship. –Assign attributes to appropriate tables. –Use foreign keys to implement one-to-one and one- to-many relationships. As discussed previously, REA diagrams will differ across organizations because of differences in business policies.

© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart4 of 121 EXAMPLE Sale Receive Cash Inventory Cash Customer Employee Customer Below is a sample REA diagram for a very simple revenue cycle.

© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart5 of 121 EXAMPLE

© 2008 Prentice Hall Business Publishing Accounting Information Systems, 11/e Romney/Steinbart6 of Students - this is all you need to know from chapter 16 - the first slide just gives an example of what an REA would look like for multiple cycles (sales, purchases, and payroll) - the second slide gives the rules for moving from an REA to normalized data - the remaining slides give an example of how an REA diagram can be operationalized in a set of database tables