chapter 18

Chapter 18

Accounting Information Systems, 12e (Romney/Steinbart)

Chapter 18 Implementing an REA Model in a Relational Database

1) Integrating separate REA diagrams developed for individual transaction cycles into a single, comprehensive enterprise-wide data model

A) is possible.

B) requires understanding what the cardinalities in each separate diagram reveal about the organization's business policies and activities.

C) provides a single comprehensive enterprise-wide model of the organization.

D) All of the above are true.

Answer: D

Page Ref: 525

Objective: Learning Objective 1

Difficulty : Moderate

AACSB: Analytic

2) The primary key for a Sales-Inventory table that consists of the Sales Invoice Number and the Inventory Item Number, is known as a

A) concatenated key.

B) condensed key.

C) double key.

D) dual key.

Answer: A

Page Ref: 532


Difficulty : Easy

AACSB: Analytic

3) When using an REA diagram to develop a database, many-to-many relationships must be

A) broken into multiple one-to-one relationships.

B) combined into a single one-to-one relationship.

C) combined into a one-to-many relationship.

D) broken into multiple one-to-many relationships.

Answer: D

Page Ref: 530



AACSB: Analytic

4) The type of relationship between two entities is determined by

A) maximum cardinalities only.

B) minimum cardinalities only.

C) minimum and maximum cardinalities.

D) median cardinalities.

Answer: A

Page Ref: 543


Difficulty : Easy

AACSB: Analytic

5) Which of the following is not one of the steps in implementing an REA diagram in a relational database?

A) implement many-to-many relationships with foreign keys

B) create tables for entities

C) assign attributes to tables and identify primary keys

D) implement one-to-many relationships with foreign keys

Answer: A

Page Ref: 530


Difficulty : Easy

AACSB: Analytic

6) An integrated REA diagram merges multiple copies of ________ and ________ entities but retains multiple copies of ________ entities.

A) resource; event; agent

B) event; agent; resource

C) resource; agent; event

D) None of the above. An integrated REA diagram merges multiple copies of all entities.

Answer: A

Page Ref: 528


Difficulty : Easy

AACSB: Analytic

7) An integrated REA diagram could contain multiple copies of

A) customers.

B) sales.

C) inventory.

D) sales-inventory.

Answer: A

Page Ref: 528



AACSB: Analytic

8) An integrated REA diagram merges multiple copies of some entities in order to

A) minimize the repetition of agent entities.

B) maximize the legibility of the diagram by avoiding the need to have relationship lines cross one another.

C) Both A and B are true.

D) Both A and B are false.

Answer: B

Page Ref: 528


Difficulty : Difficult

AACSB: Reflective Thinking

9) Combining REA diagrams for individual transaction cycles into a single, enterprise-wide model adds two more rules to the three basic principles for drawing REA diagrams. Which of the following is not one of those two new rules?

A) Every resource must be linked to at least one event that increments that resource and to at least one event that decrements that resource.

B) If a specific event can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the minimum cardinality between that event and every other event with which it may be associated must be 0.

C) If a specific event can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the maximum cardinality between that event and every other event with which it may be associated must be 0.

D) All of the above are new rules for drawing integrated REA diagrams.

Answer: C

Page Ref: 530



AACSB: Analytic

10) Concerning a correctly drawn enterprise-wide REA diagram, which of the following statements is not true?

A) Every event must be linked to at least one resource.

B) Merging two transaction cycles on a common event may affect the minimum cardinalities between the merged event and the other events.

C) Events can only be merged if they share the same resources and events.

D) Creating a set of tables from an REA diagram automatically results in a well-structured relational database.

Answer: C

Page Ref: 530



AACSB: Analytic

11) Which of the following is not one of the three steps to implementing an REA diagram in a relational database?

A) Assign attributes to appropriate tables.

B) Create a table for each distinct entity in the diagram and for each many-to-many relationship.

C) Every event must be linked to at least one resource.

D) Use foreign keys to implement one-to-one and one-to-many relationships.

Answer: C

Page Ref: 530



AACSB: Analytic

12) REA diagrams for different organizations may be similar, but will likely result in different relationship cardinalities because of

A) differences in business policies.

B) different designers of REA diagrams.

C) different methods of drawing REA diagrams.

D) errors in drawing REA diagrams.

Answer: A

Page Ref: 530


Difficulty : Easy

AACSB: Analytic

13) What is the first step to implementing an REA diagram in a relational database?

A) Assign attributes to appropriate tables.

B) Create a table for each distinct entity in the diagram and for each many-to-many relationship.

C) Identify cardinalities.

D) Use foreign keys to implement one-to-one and one-to-many relationships.

Answer: B

Page Ref: 530


Difficulty : Easy

AACSB: Analytic

14) Concerning REA diagrams and relational databases, which of the following is true?

A) A well-designed relational database is the starting point for creating an REA diagram.

B) A well-designed REA diagram minimizes update, insert or delete anomaly problem when the diagram is implemented into a relational database.

C) REA diagrams and database design are generic across organizations.

D) The design of a relational database is specific to the organization being modeled.

Answer: D

Page Ref: 530


Difficulty : Easy

AACSB: Analytic

15) Concerning the creation of tables from an REA diagram, which of the following is false?

A) A properly designed relational database has a table for each distinct entity in an REA diagram.

B) A properly designed relational database has a table for each many-to-many relationship in an REA diagram.

C) To reduce confusion, table names should not duplicate REA diagram entities' names.

D) Many-to-many relationships will be shown in tables with hyphenated concatenations of the entities' names.

Answer: C

Page Ref: 530-532


Difficulty : Easy

AACSB: Analytic

16) When assigning attributes to each table,

A) the database designer must interview users to identify which facts should be included in the database.

B) the database designer must interview management to identify which facts should be included in the database.

C) the database designer must use the REA diagram to help determine in which tables those facts belong.

D) the database designer must do all of the above.

Answer: D

Page Ref: 532


Difficulty : Easy

AACSB: Analytic

17) The primary key for M:N relationship tables

A) is a single attribute.

B) always consists of two attributes.

C) is the primary key of the most important entity linked to that relationship.

D) does not exist. Many-to-many relationship tables only use foreign keys.

Answer: B

Page Ref: 532



AACSB: Analytic

18) Attributes other than the primary key are

A) included to satisfy transaction processing requirements.

B) included to meet management's information needs.

C) both A and B

D) none of the above

Answer: C

Page Ref: 532


Difficulty : Easy

AACSB: Analytic

19) Concerning tables for M:N relationships, which of the following statements is false?

A) Non-key attributes may be included.

B) Multiple attribute primary keys are used.

C) Single attribute primary keys may be used.

D) Concatenated keys are used.

Answer: C

Page Ref: 532


Difficulty : Easy

AACSB: Analytic

20) Nonfinancial information should be collected because

A) it may indicate events that may affect resources.

B) it can be used to plan other activities.

C) it can be used in transaction processing.

D) both A and B

Answer: D

Page Ref: 536-537



AACSB: Analytic

21) Concerning the creation of tables from an REA diagram, which of the following is false?

A) M:N relationships must be implemented as separate tables.

B) 1:N relationships are implemented with the primary key of the 1 side becoming a foreign key on the N side.

C) 1:1 relationships are implemented with the primary key of either entity included as a foreign key in the table representing the other entity.


Answer: D

Page Ref: 533-534



AACSB: Analytic

22) Which of the following is not part of a "final accuracy check" when creating relational tables from an REA diagram?

A) Every attribute in every table is single-valued (i.e., each table is a flat file).

B) Every event must be linked to at least one resource.

C) Every table must have a primary key.

D) Other non-key attributes in each table must be either a fact about the thing designated by the primary key or foreign keys used to link that table to another table.

Answer: B

Page Ref: 535



AACSB: Analytic

23) When comparing REA diagrams used to design an AIS with a traditionally designed AIS,

A) traditional AIS information, such as journals and ledgers no longer exist.

B) similar information is present as in a traditional AIS, but stored in a different format.

C) queries are used to input data into the AIS.

D) an REA designed AIS cannot recreate a traditional journal.

Answer: B

Page Ref: 535



AACSB: Analytic

24) Concerning the use of REA diagrams to retrieve information from a database

A) although neither journals nor ledgers appear explicitly in an REA diagram, each can be created through appropriate queries.

B) the information normally found in a journal is contained in the tables used to record data about events.

C) much of the information about an organization's assets that is traditionally recorded in ledgers is stored in resource tables in an REA-based relational database.

D) all of the above

Answer: D

Page Ref: 535



AACSB: Analytic

25) Much of the information about an organization's assets that is traditionally recorded in ledgers is stored in ________ tables in an REA-based relational database.

A) Account

B) Agent

C) Event

D) Resource

Answer: D

Page Ref: 536


Difficulty : Easy

AACSB: Analytic

26) In an REA-based relational database, the information normally found in a ________ is contained in the tables used to record data about ________.

A) journal, events

B) journal, resources

C) ledger, events

D) ledger, resources

Answer: A

Page Ref: 535



AACSB: Analytic

27) Concerning REA models, which of the following is false?

A) Many financial statement accounts are represented as resources in the REA model.

B) Accounts such as Accounts Receivable show up as entities in the REA model.

C) Some accounts represent an imbalance between two related events in the REA model.

D) Much of the information about an organization's assets that is traditionally recorded in ledgers is stored in resource tables in an REA-based relational database.

Answer: B

Page Ref: 536


Difficulty : Easy

AACSB: Analytic

28) Because information about temporal imbalances between two ________, such as accounts receivable and accounts payable, is needed so frequently, such calculated values are sometimes stored as ________ in the appropriate tables.

A) events, agents

B) events, attributes

C) resources, agents

D) resources, attributes

Answer: B

Page Ref: 536


Difficulty : Easy

AACSB: Analytic

29) Concerning the generation of financial statements from an REA-based relational database, which of the following is false?

A) It is possible to use a completed REA diagram to guide the writing of queries to produce the information that would be included in financial statements.

B) Many financial statement items can be displayed by querying a single table.

C) It is unnecessary to understand the REA data model to know which tables need to be included in each query to generate the correct answers to financial statement questions.

D) A major advantage of the REA data model is that it integrates non-financial and financial data.

Answer: C

Page Ref: 536


Difficulty : Easy

AACSB: Analytic

30) In comparing the REA model to the traditional AIS, which of the following is false?

A) Traditional AISs contain only data about the financial aspects of transactions.

B) A major advantage of the REA data model is that it integrates non-financial and financial data in the AIS and makes both types of data easily accessible to management.

C) In the REA model, many financial statement items can be displayed by querying a single table.

D) Accounts in the traditional AIS are analogous to resources in the REA-based relational database.

Answer: D

Page Ref: 536



AACSB: Analytic

31) The major benefits of using the REA model as the basis for designing an AIS include all of the following except

A) the REA data model integrates non-financial and financial data in the AIS.

B) the REA data model makes both non-financial and financial data easily accessible to management.

C) the REA data model provides the basis for building the kind of flexible AIS that is responsive to management's changing information needs.

D) the REA data model reduces the need for accountants to understand the underlying accounting journals and ledgers.

Answer: D

Page Ref: 536


Difficulty : Easy

AACSB: Analytic

32) Concerning REA diagrams for individual transaction cycles, which of the following is false?

A) They depict basic give-to-get economic duality relationships.

B) They usually provide only a partial view of resources.

C) They need to be combined in order to provide a comprehensive enterprise-wide data model.

D) They show both how resources are acquired and how they are used.

Answer: D

Page Ref: 528


Difficulty : Easy

AACSB: Analytic

33) Concerning enterprise-wide REA diagrams, which of the following is false?

A) Merging two or more REA diagrams that contain the same resource entity does not require any changes to the cardinality pairs in the individual diagrams.

B) Merging two or more diagrams that contain a common event entity, however, often requires changing the minimum cardinalities associated with the other events to 0, to reflect the fact that the merged event may be connected to any one of several different events, but not to all of them simultaneously.

C) The minimum cardinalities associated with agents may also have to be changed to 0.


Answer: D

Page Ref: 530



AACSB: Analytic

34) Concatenated keys are

A) only needed when combining two or more REA diagrams.

B) foreign keys used to implement 1:N or 1:1 relationships.

C) multiple attribute keys used to implement 1:N relationships.

D) required to implement M:N relationships.

Answer: D

Page Ref: 532


Difficulty : Easy

AACSB: Analytic

35) How many tables are needed to implement an REA data model that has six distinct entities, three M:N relationships and four 1:N relationships in a relational database?

A) 6

B) 9

C) 11

D) 13

Answer: B

Page Ref: 530



AACSB: Analytic

36) How many tables are needed to implement an REA data model that has five distinct entities, two M:N relationships and three 1:N relationships in a relational database?

A) 5

B) 7

C) 8

D) 10

Answer: B

Page Ref: 530



AACSB: Analytic

37) When combining two REA diagrams by merging common entities, changes in the cardinality of the merged entity is needed when it is a(n)

A) agent.

B) event.

C) relationship.

D) resource.

Answer: B

Page Ref: 529


Difficulty : Easy

AACSB: Analytic

38) Information traditionally found in journals are stored where in an REA database?

A) Event entity

B) Agent entity

C) Relationship

D) Resource entity

Answer: A

Page Ref: 535


Difficulty : Easy

AACSB: Analytic

39) Which table is most likely to have a concatenated key?

A) customer

B) sales

C) customer-sales

D) accounts receivable

Answer: C

Page Ref: 532



AACSB: Analytic

40) Integrating separate REA diagrams into a single comprehensive enterprise-wide model of the organization requires understanding what the ________ in each separate diagram reveal about the organization's business policies and activities.

A) cardinalities

B) data

C) events

D) transactions

Answer: A

Page Ref: 525


Difficulty : Easy

AACSB: Analytic

41) When integrating separate REA diagrams,

A) common resources are placed between the events that affect them.

B) each resource is connected to two agents.

C) resources are duplicated to show the give and get of economic duality relationships.

D) resources are merged if both events in the stockflow relationship are modeled.

Answer: A

Page Ref: 529



AACSB: Analytic

42) In which of the following cases is the number of tables required to represent the relationship equal to three?

A)

B)

C)

D)

Answer: D

Page Ref: 530


Difficulty : Easy

AACSB: Analytic

43) Which entity is likely to be part of both the revenue cycle and the expenditure cycle?

A) Receive Goods

B) Customer

C) Receive Cash

D) Inventory

Answer: D

Page Ref: 529


Difficulty : Easy

AACSB: Analytic

44) In which of the following cases is the relationship between entities not implemented by foreign keys?

A)

B)

C)

D)

Answer: D

Page Ref: 530



AACSB: Analytic

45) Which entity is likely to be part of both the payroll cycle and the expenditure cycle?

A) Receive Goods

B) Customer

C) Disburse Cash

D) Inventory

Answer: C

Page Ref: 528


Difficulty : Easy

AACSB: Analytic

46) Which entity is likely to be part of both the payroll cycle and the revenue cycle?

A) Cash

B) Customer

C) Receive Goods

D) Inventory

Answer: A

Page Ref: 528


Difficulty : Easy

AACSB: Analytic

47) Which entity is likely to be part of the payroll cycle, expenditure cycle, and the revenue cycle?

A) Customer

B) Cash

C) Supplier

D) Inventory

Answer: B

Page Ref: 528


Difficulty : Easy

AACSB: Analytic

48) Which of the following is a redundant entity that would be merged when two cycles are combined?

A) Customer

B) Employee

C) Vendor

D) Inventory

Answer: D

Page Ref: 528


Difficulty : Easy

AACSB: Analytic

49) In an integrated REA diagram, every event must be linked to

A) at least two resources.

B) at least two agents.

C) at least one other event.

D) at least two other events.

Answer: B

Page Ref: 530



AACSB: Analytic

50) In an integrated REA diagram, every resource must be must be linked to

A) at least two events.

B) at least two agents.

C) at least one other resource.

D) at least two other resources.

Answer: A

Page Ref: 530



AACSB: Analytic

51) In an integrated REA diagram, every agent must be must be linked to

A) at least one resource.

B) at least two resources.

C) at least one event.

D) at least two events.

Answer: C

Page Ref: 530



AACSB: Analytic

52) In a relational database, which of the following attributes would typically be included in the table that stores data about the Customer entity?

A) Invoice number

B) Credit limit

C) Product code

D) Backorder

Answer: B

Page Ref: 532


Difficulty : Easy

AACSB: Analytic

53) In a relational database, which of the following attributes would typically be included in the table that stores data about the Vendor entity?

A) Invoice number

B) Outstanding balance

C) Product code

D) Inventory

Answer: B

Page Ref: 532


Difficulty : Easy

AACSB: Analytic

54) In a relational database, which of the following attributes would typically be represented by a foreign key in the table that stores data about a Receive Inventory entity?

A) Purchase order number

B) Payment terms

C) Product code

D) Date

Answer: A

Page Ref: 533



AACSB: Analytic

55) In a relational database, which of the following attributes would typically be represented by a foreign key in the table that stores data about a Disburse Cash entity?

A) Amount

B) Date

C) Vendor number

D) Product number

Answer: C

Page Ref: 533



AACSB: Analytic

56) A query that extracts, for a given time period, the total amount of all sales events for which there is no corresponding receive cash event will yield

A) a cash account ledger.

B) a credit sales journal.

C) an accounts receivable ledger.

D) an accounts payable journal.

Answer: C

Page Ref: 536


Difficulty : Easy

AACSB: Analytic

57) A query that extracts, for a given time period, all sales events for which there is no corresponding receive cash event on the date of the sales event will yield





Answer: B

Page Ref: 535



AACSB: Analytic

58) A query that extracts, for a given time period, all purchases for which there is no corresponding disburse cash event will yield





Answer: D

Page Ref: 535



AACSB: Analytic

59) Implementation of this REA diagram into a relational database would require how many tables?

A) 12

B) 13

C) 8

D) 9

Answer: B

Page Ref: 530



AACSB: Analytic

60) Which of the following would be true when implementing this REA diagram into a relational database?

A) The primary key for Employee would be a foreign key for Cash Receipts.

B) The primary key for Cash Receipts would be a foreign key for Cash.

C) The primary key for Parts would be a foreign key for Service Request.

D) The primary key for Sales would be a foreign key for Service Request.

Answer: A

Page Ref: 530



AACSB: Analytic

61) Cosgrove Art & Antiques sells unique art and antiques exclusively at antique shows. Cosgrove purchases inventory from individuals and other dealers at garage sales, flea markets, antique malls, and estate sales. Each time Cosgrove makes a purchase, she records the person's name, address, date, specific items purchased and price paid, and total amount spent. Later at home, Cosgrove cleans, researches and prices the inventory items. She assigns an inventory number to each item and records the "asking" price. Cosgrove buys price tags and display supplies from a company that sells at flea market and antique shows. All inventory and supplies purchases are paid immediately with cash, or with checks from a bank account in the business' name, to which sales are also deposited. Several times a year Cosgrove rents a booth at an antique show. A deposit is always required, with the balance due at the start of the show. Cosgrove records the deposit and final payment, along with the show organizer's name and address, in the same worksheet on which purchases of inventory and supplies are recorded.

Which of the following would not be an attribute in the Purchases table?

A) Address of place purchase was made

B) Person's name from whom the purchase was made.

C) Date of purchase

D) Total amount of purchase

Answer: A

Page Ref: 532





Which of the following would not be an attribute in the Inventory table?

A) Total amount of purchase

B) Price paid

C) Asking price

D) Inventory number

Answer: A

Page Ref: 532





Which of the following would be an attribute in the table for booth rental?

A) Organizer's name

B) Deposit paid

C) Balance paid

D) Organizer's address

Answer: A

Page Ref: 532




64) Explain the five rules for drawing integrated REA diagrams.

Answer: 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. (This reflects the economic duality underlying "give-to-get" economic exchanges.) 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 a specific event, referred to as the focal event, can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the minimum cardinality between that focal event and every other event with which it may be associated must be 0.

Page Ref: 530



AACSB: Analytic

65) Explain a completeness check.

Answer: The list of attributes that users and management want included in the database provides a means to check and validate the implementation process. Every attribute in that list should appear in at least one table, as either a primary key or "other" attribute. Checking this list against the table column names may reveal not only the fact that a particular attribute has not been assigned to the appropriate table in the database but may even indicate the need to modify the REA diagram itself.

Page Ref: 534



AACSB: Analytic

66) Explain where in the REA model you can find the information normally found in a ledger.

Answer: In traditional AISs, ledgers are master files that contain cumulative information about specific accounts. In a relational database designed according to the REA data model, resource and agent entities contain permanent information that is carried over from one fiscal year to the next. Thus, much of the information about an organization's assets that is traditionally recorded in ledgers is stored in resource tables in an REA-based relational database.

Page Ref: 536



AACSB: Analytic

67) Explain where in the REA model you can find the information normally found in a journal.

Answer: In traditional AISs, journals provide a chronological listing of transactions. In a relational database designed according to the REA data model, event entities store information about transactions. Thus, the information normally found in a journal is contained in the tables used to record data about events. For example, each row in the Sales event table contains information about a particular sales transaction. Thus, a sales journal can be produced by writing a query that displays the appropriate entries in the sales table for a given period. In a similar manner, queries of the Order Inventory event and Cash Disbursements event tables can be used to generate purchases and cash disbursements journals.

Page Ref: 535



AACSB: Analytic

68) What are the advantages of the REA data model over the traditional AIS model?

Answer: A major advantage of the REA data model is that it integrates non-financial and financial data in the AIS and makes both types of data easily accessible to management. In contrast to the REA data model, the general ledger in traditionally designed AISs uses the chart of accounts to store and organize data based on the structure of financial statements. Consequently, traditional AISs contain only data about the financial aspects of transactions. Other information that may be of use to management, such as the time of day a sale occurred or the reason why a customer was purchasing a specific item, would have to be stored in a separate database or information system. The existence of separate systems makes it more difficult for management to easily and quickly access the information it needs. It also provides opportunities for data entry errors to create inconsistencies between systems, thereby reducing the utility of any reports that are generated. Thus, a major benefit of using the REA model as the basis for designing an AIS is the ability to easily integrate information that traditionally appears in financial statements with other, non-financial information necessary to effectively manage operations and evaluate performance. It is vitally important that an organization's AIS be capable of storing both traditional financial measures and other operational performance measures.

Page Ref: 536



AACSB: Analytic21Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

chapter 18

Documents

learning objective

b page ref

d page ref

b sales

rea model

easy aacsb

c inventory

d salesinventory