1. Implementing an REA Model in a Relational Database
Chapter 6
Implementing an REA Model in a Relational Database
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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.
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3. REA Diagram – Revenue Cycle
Redundant
Redundant
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4. REA Diagram – Expenditure Cycle
Redundant
Redundant
Redundant
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5. REA Diagram – Payroll Cycle
REA is in mirror form, Agent, Event, Resource
Get/Give
Time Worked/Disburse Cash
Give/Get
Time Used/Bill Client
Each Event should be related to one Resource
But Time Worked is usually NOT
Time can NOT be increased/decreased
Attributes stored in Time Event
Hours Worked
Time Used
Redundant
Redundant
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6. REA Redundancies
Separate REAs for an organization will have redundant Entities
Eliminate (merge) the Redundant Resource Entities
Eliminate Redundant Resources (no duplicates):
Link Resources 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
Redundant Event Entities
Eliminate (Merge) the Redundant Event Entities
alters the minimum cardinalities associated with the other events that are related to the merged event if:
the merged event may be linked to either an event that is part of one business cycle or to an event that is part of another cycle but cannot be linked to both events.
the minimum cardinality associated with the other events must be 0 in the integrated REA diagram
May alter minimum cardinality between Event and Agent if:
if agents are different in different transaction cycles
Minimum becomes 0 (optional)
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7. REA Redundancies Agents
If Duplicate Agents exist across transaction cycles
Do NOT eliminate them, keep them for legibility of the model
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8. Rules for Creating Integrated REA Diagram
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 (give event) must be linked to an event that involves the acquisition of a resource (get event).
Every resource must be linked to at least one event that increments that resource (Get) and to at least one event that decrements that resource (Give).
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 those other events.
If event A can be linked to more than one other agent, but cannot be linked simultaneously to all of those other agents, then the REA diagram should show that event A is linked to a minimum of 0 of each of those other agents.
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9. Integrated REA Diagram
Expenditure Cycle
Revenue Cycle
Payroll Cycle
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10. Cardinality Effect of Merging Resources
Cardinalities Between Resource and Entities Remain the Same.
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

11. Cardinality Effect of Merging Events
The Cardinality Between Disburse Cash and Receive Inventory and Disburse Cash and Time Worked is now 0
The Cardinality between Disburse Cash and Supplier & Employee (as payee) is now 0 to 1, that is a disbursement can be made to the supplier OR the employee but not BOTH!
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12. Using REA Diagram to Create Relational Database
Advantage:
Ensures the elimination of Anomalies:
Update
Insert
Delete
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13. REA to Database Steps
Create a table for each distinct entity in the diagram and for each many-to-many relationship.
Assign attributes to appropriate tables.
Identify Primary Keys
Attribute(s) 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.
Use foreign keys to implement one-to-one and one-to-many relationships.
an attribute of one entity that is itself the primary key of another entity.
1:1
If events are sequential, the Primary Key of the 1st event should be used as the Foreign Key of the 2nd event
If not sequential, either entities primary key can become the foreign key of the other table
1:N
Primary Key of the Entity Linked to the Many Entity MUST be used as the Foreign Key in the Many Entity
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14. Step 1 Event Tables Create Tables for each Entity
Create Table for each M:N Maximum Cardinality
Resource Tables
12 tables from Entities
5 tables from M:M cardinalities
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15. Step 3
1:1
Primary key of 1st chronological event should be foreign key of next event.
Order# FK in Sales
1:N
Primary key of entity linked to many event, becomes foreign key in many event
Supplier# FK in Order Inventory
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16. 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 for
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