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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 Diagram – Revenue Cycle
Redundant
Redundant
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REA Diagram – Expenditure Cycle
Redundant
Redundant
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REA Diagram – Payroll Cycle

First, REA is in mirror
form, Agent, Event,
Resource

Get/Give


Give/Get


Time Worked/Disburse
Cash
Time Used/Bill Client
Each Event should be
related to one Resource

But Time Worked is
usually NOT


Redundant
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Time can NOT be
increased/decreased
Attributes stored in
Time Event

Hours Worked

Time Used
REA Redundancies
 Separate REA for an organization will have redundant Entities

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:


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:

Minimum becomes 0 (optional) if agents are different in different transaction cycles
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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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Payroll Cycle
Revenue Cycle
Expenditure Cycle
Integrated REA Diagram
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Cardinality Effect of Merging
Resources
Cardinalities Between Resource and Entities Remain the Same.
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Cardinality Effect of
Merging Events
The Cardinality Between
Disburse Cash and Receive
Inventory and Disburse Cash
and Time Worked is now 0
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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!
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 (give event) must be
linked to an event that involves the acquisition of a resource (get event).
4.
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).
5.
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.
6.
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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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-to-many
relationship.
2.
Assign attributes to appropriate tables.

Identify Primary Keys



3.
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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Event Tables
Step 1
•Create Tables for
each Entity
Resource Tables
•Create Table for
each M:N
Maximum
Cardinality
12 tables from Entities
5 tables from M:M cardinalities
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Step 3
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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 for
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