Polytechnic University of the Philippines

Sta. Mesa, Manila

Accounting Information System

ACCO 20153

REVIEW AND DISCUSSION QUESTIONS

CHAPTER TEN

Submitted by:

Group 1

Baylon, Billy Joel T.

Dialino, Daniel I.

Roque, Josh Mikhel G.

Semeniano, Ivy Claire B.

BSA 2-13

Submitted to:

Prof. Froilan A. Magpantay

July 05,2020
 Review Questions

1. What is a user view?

User view is the set of data that a particular user needs to achieve his or her assigned
tasks.

2. What is a semantic data model?

A semantic model captures the operational meaning of the user’s data and provides a
concise description of it.

3. What is an REA diagram?

A unique version of an entity relationship (ER) diagram consisting of three entity types
(resources, events, and agents) and a set of associations linking them.

4. What are economic resources?

Economic resources are things of economic value to the organization. They are defined
as objects that are both scarce and under the control of the enterprise.

5. What are economic events?

Economic events are phenomena that effect changes (increases or decreases) in

6. What are support events?

Support events include control, planning, and management activities that are related to
economic events, but do not directly effect a change in resources.

7. What are economic agents?

Economic agents are individuals and departments that participate in economic and
support events. They are parties both inside and outside the organization with discretionary
power to use or dispose of economic resources.

8. Define duality.

Duality means that each economic event is mirrored by an associated economic event in
the opposite direction. It is also the connection between dual events: the give event and
receive event.

9. What is view modeling?

View modeling is a process in which the database designer identifies and models the set
of data that individual users need to make a decision or perform a task.

10. What is represented by the labeled lines connecting entities in an REA diagram?

It represents the nature of the association between them.

11. Why are journals and ledgers not modeled in an REA diagram?
Accounting activities such as recording a sale in the journal and setting up an account
receivable are not value chain activities and need not be modeled. Capturing transaction data in
sufficient detail adequately serves traditional accounting requirements.
12. Define association.
An association is defined as a connection between ideas made mentally, or a connection
you see in your head. The definition of an association is a relationship with an individual, group
or organization. An example of an association is the friendship you have with a co-worker.
13. Define cardinality.
The number of elements in a set or other grouping, as a property of that grouping.
14. Name the four basic forms of cardinality.
The four basic forms of cardinality are: zero or one (0,1), one and only one (1,1), zero
or many (0,M), and one or many (1,M).
15. What is view integration?
It is the process of combining multiple individual REA diagram into an integrated global
or enterprise model.
16. List the steps involved in view integration.
1. Determine how your data should sync
2. Choose the right integration software for your needs
3. Map your connectors, objects, and fields
4. Refine your integration by setting up filters
5. Start your integration and decide whether to sync historical data or start fresh.
17. What is the rule for assigning foreign keys in a 1:1 association?
Typically, one of the tables in a 1:1 association has a minimum cardinality of zero. When
this is the case, the primary key of the table with the (1, 1) cardinality should be embedded as
a foreign key in the table with the (0, 1) cardinality.
18. What is the rule for assigning foreign keys in a 1:M association?
The primary key of the 1 side table is embedded as a foreign key in the table of the M
side
19. What is the rule for assigning foreign keys in an M:M association?
When modeling traditional ER diagrams, it is often convenient to include the link tables
in the model (as in Chapter 9) so that it reflects closely the actual database. The inclusion of
link tables in an REA diagram, however, creates a conflict with the rule that an event entity
should be connected to at least one resource and at least two agent entities.
20. Define the value chain.
The process or activities by which a company adds value to an article, including
production, marketing, and the provision of after-sales service.
 Discussion Questions

1. From the perspective of an organization, explain duality as it relates to the give

The give half of the exchange decreases the economic resource, as represented by the
outflow association. The receive half of the exchange increases the economic resources
represented by an inflow association.

2. Explain the relationship between cardinality and association.

It describes the manner through which two entities interact with each other.

3. Discuss the rules for assigning primary keys to database tables.

 The primary key value must uniquely identify one and only one record within the
table.
 The primary key value must not be null.
 The primary key value must not change.
4. Discuss the rules for linking events to resources and agents in an REA diagram.

Each resource must be linked with at least two agents. One agent will be internal and
the other can be either internal or external.

5. How are external and internal agents modeled in REA diagrams for transactions
that involve purely internal exchanges, such as raw material moving into
production?

The convention in an REA diagram is to treat such transactions as if they are sales. The
clerk giving up control and reducing the resource (raw materials) is the internal agent and the
clerk assuming control and increasing the resource (work-in-process) is the external agent.

6. Explain how REA databases are able to support financial statement reporting
when they do not employ journals and ledgers.

Traditional accounting mechanisms are reproduced from the event tables. It presents
structures for several relational tables in the database. These table structures correspond to the
tables listed, but some of the attributes are omitted to simplify figures. This demonstrates how
financial statement accounting figures can be constructed from underlying event data.

7. Distinguish between economic events and support events and provide examples
of each.
Economic events are those events which are responsible for change in the ownership of
resource. Economic events bring change in the financial records of company. On the contrary,
support events are those events which do not bring change in the ownership of resource but
help in applying economic events
8. Describe the minimum number and types of events that an REA diagram must
include.
Describe the minimum number and types of events that an REA diagram must include.
9. Why are traditional accounting events such as recording a transaction in a journal
or posting to ledgers not modeled in REA diagrams?
Accounting activities such as recording a sale in the journal and setting up an account
receivable are not value chain activities and need not be modeled. Capturing transaction data in
sufficient detail adequately serves traditional accounting requirements
10. ER diagrams usually include the link tables in the model to resolve M:M
associations. REA diagrams typically do not show link tables. Explain.
 REA diagrams are typically organized from top to bottom within the constellations to
focus on the sequence of events. An advantage of this is that during systems development,
management and nontechnical users better understand REA diagrams.
11. Employee time is a resource that is always used but is not always modeled in an
REA diagram. Explain and give examples.
Employee Time (The Employee time represents the right to use an employee's time-but
time is a noninventoriable asset and is consumed when it is acquired, so this resource is
seldom, if ever, implemented as a table in a database)
12. When are data in 3NF?
Third Normal Form Definition. A table is in third normal form if: A table is in 2nd normal
form. It contains only columns that are non-transitively dependent on the primary key.