21440791

Chapter 17 Database Design Using the REA Data Model
17.1 Discuss the steps for designing and implementing a database system.
1) Which of the following statements about REA modeling and REA diagrams is false?
A) REA is an acronym for Resources, Entities, and Agents.
B) REA data modeling does not include traditional accounting elements such as ledgers, chart
of accounts, debits and credits.
C) REA data modeling could be referred to as an events-based model.
D) REA diagrams must include at least two activities, which together represent a give-get
economic exchange.
Answer: A
2) The REA data model approach facilitates efficient operations by all the following except
A) standardizing source document format.
B) identifying non-value added activities.
C) storing financial and nonfinancial data in the same database.
D) organizing data to simplify data retrieval and analysis.
Answer: A
3) The process of defining a database so that it faithfully represents all aspects of the
organization including its interactions with the external environment is called
A) data modeling.
B) data designing.
C) data development.
D) data definition.
Answer: A
4) In which stage(s) of the database design process does data modeling occur?
A) only in the systems analysis stage
B) only in the design stage
C) in both the systems analysis and design stages
D) neither the systems analysis nor the design stages
Answer: C
5) A(n) diagram graphically depicts a database's contents by showing entities

and relationships.
A) data flow
B) flowchart
C) entity-relationship
D) REA
Answer: C
6) In creating an entity-relationship diagram, is anything about which an organization wants

to collect and store information.
A) a data model
B) an entity
C) a schema
D) a tuple
Answer: B
7) An entity-relationship diagram represents entities as and the relationships between them

as lines and .
A) circles; squares
B) squares; diamonds
C) rectangles; diamonds
D) rectangles; circles
Answer: C
8) An entity-relationship diagram
A) can represent the contents of any database.
B) is only used in conjunction with REA models.
C) can show a limited number of entities and relationships.
D) is used only to design new databases.
Answer: A
9) Data modeling is an element of
A) systems analysis.
B) conceptual design.
C) both A and B
D) neither A nor B
Answer: C
12) In which stage(s) of the database design process is the completed data model used?
A) only in the systems analysis stage
B) only in the conceptual design stage
C) in both the systems analysis and design stages
D) neither the systems analysis nor the design stages
Answer: D
13) In which stage(s) of the database design process should accountants participate?
A) the systems analysis stage
B) the conceptual design stage
C) the implementation and conversion stage
D) in all of the stages above
Answer: D
14) With regards to the database design process, accountants may provide the greatest value to
their organization by participating in
A) implementation and conversion.
B) data modeling.
C) database operation and maintenance.
D) system auditing.
Answer: B
17) It is industry standard to model relationships as in entity-relationship diagrams.
A) rectangles
B) ovals
C) diamonds
D) there is no industry standard
Answer: D
18) It is industry standard to model attributes as in entity-relationship diagrams.
A) rectangles
B) ovals
C) diamonds
D) There is no industry standard.
Answer: D
17.2 Use the REA data model to design an AIS database.
1) The REA data model
A) is used in many areas of business and science.
B) was developed specifically for use in designing accounting information systems.
C) classifies data into relationships, entities and accounts.
D) all of the above
Answer: B
2) Which of the following is not one of the rules in creating an REA data model?
A) Each event is linked to at least one resource that it affects.
B) Each event is linked to at least one other event.
C) Each event is linked to at least two participating agents.
D) All of the above are important rules.
Answer: D
3) Which is a true statement about the REA data model?
A) The REA data model classifies entities into three distinct categories.
B) The term REA is an acronym that stands for resources, entities, and agents.
C) Using an REA data model is not helpful when creating an R-E diagram.
D) The "E" in the REA data model stands for things that have an economic value to the organization.
Answer: A
4) Relationships that affect the quantity of a resource are sometimes referred to as

relationships.
A) commitment
B) exchange
C) stockflow
D) duality
Answer: C
5) The "give" event represents an activity which
A) includes a promise to engage in future economic exchanges.
B) increases the organization's stock of an economic resource.
C) reduces the organization's stock of a resource that has economic value.
D) none of the above
Answer: C
6) The "get" event represents an activity which
A) includes a promise to engage in future economic exchanges.
B) increases the organization's stock of an economic resource.
C) reduces the organization's stock of a resource that has economic value.
Answer: B
8) REA models are usually depicted in which diagramming form?
A) entity-relationship diagrams
B) decision tree diagrams
C) if-then diagrams
D) stock-flow diagrams
Answer: A
9) Identify the item below that would be classified as a resource by the REA data model.
A) an IOU from a customer
B) the CFO
C) a customer sale
Answer: A
10) Identify the item below that would be classified as an event by the REA data model.
B) the CFO
C) a customer sale
Answer: C
11) Identify the item below that would be classified as an agent by the REA data model.
B) the CFO
C) a customer sale
Answer: B
12) What is the minimum number of agents that must participate in each REA event?
A) 0
B) 2
C) 1
D) 3
Answer: C
13) What is the minimum number of external agents that must participate in each REA event?
A) 0
B) 2
C) 1
D) 3
Answer: A
14) Assume that you are looking at a REA diagram that depicts only one event. Which of the
following must be on the REA diagram?
A) an external agent
B) an internal agent
C) both A and B
D) neither A nor B
Answer: B
15) Identify the notation often used to represent cardinality information.
A) dotted lines
B) Greek characters
C) crow's feet
D) color coding
Answer: C
16) Identify the notation below that is not used to represent cardinality information.
A) UML
B) (Min, Max)
C) DFD
D) Maximums only
Answer: C
17) Every citizen in the United States has one social security number, but no two citizens have the
same social security number. Thus, the cardinality that exists between social security numbers and
citizens is
A) one-to-one.
B) one-to-many.
C) many-to-many.
Answer: A
18) Every person in the world has a birthdate, but no person has more than one birthdate. Thus,
the cardinality that exists between birthdate and people is
A) one-to-one.
B) one-to-many.
C) many-to-many.
Answer: B
19) Every person in the world can have more than one friend, and each person in the world can be
a friend to more than one person. Thus, the cardinality that exists between friends and people is
A) one-to-one.
B) one-to-many.
C) many-to-many.
Answer: C
17.3 Draw an REA diagram of an AIS database.
1) What is the standard cardinality pattern for a relationship between an event and an
agent? A) 1:1
B) 0:1
C) 0:N
D) 1:N
Answer: D
2) An REA diagram must link every event to at least one and two .
A) resource; agents
B) agent; resources
C) transaction; entities
D) resource; relationships
Answer: A
3) Each event in an REA model will in most cases have at least one agent and one
agent involved with the event.
A) internal; resource
B) external; entity
C) internal; employee
D) internal; external
Answer: D
4) Which of the following statements is true about the development of an REA model?
A) Events that pertain to the entry of data are included in the REA model.
B) The objective is to model basic value-chain activities.
C) REA diagrams model individual transactions and data collections.
D) Information retrieval events are modeled as events in the REA model.
Answer: B
5) The first step in developing an REA diagram for a specific transaction cycle begins with identifying
A) relevant events.
B) agents involved.
C) resources affected.
D) relationship cardinalities.
Answer: A
6) Identify the statement below that is false with respect to cardinalities.
A) Cardinalities describe the nature of the relationship between two entities.
B) No universal standard exists for representing information about cardinalities in REA diagrams.
C) The minimum cardinality can be zero or one.
D) The maximum cardinality can be zero, one, or many.

Answer: D
7) Identify the minimum cardinality of any REA diagram relationship.
A) 0 or 1
B) 0 or N
C) 1 or N
Answer: A
8) The maximum cardinality of any REA diagram relationship is
A) zero or one.
B) one or many.
C) zero or many.
Answer: B
9) How many types of relationships are possible between entities?
A) one
B) two
C) three
D) an infinite number
Answer: C
10) Identify the most likely relationship where cardinalities have zero minimums and N maximums.
A) agent-event relationship
B) resource-event relationship
C) event-event relationship
D) All of the above are equally likely.
Answer: B
11) Which of the following statements is false regarding REA diagrams?
A) Each organization will have its own unique REA diagram.
B) An REA diagram for a given organization will change over time.
C) Data modeling and REA diagram development involve complex and repetitive processes.
D) Redrawing an REA diagram several times during development is uncommon.
Answer: D
12) Which of the following graphical symbols represents a minimum cardinality of zero and a
maximum cardinality of one?
A)
B)
C)
D)
Answer: A
13) Which of the following graphical symbols represents a minimum cardinality of zero and a
maximum cardinality of many?
A)
B)
C)
D)
Answer: C
14) Which of the following graphical symbols represents a minimum cardinality of one and a
maximum cardinality of one?
A)
B)
C)
D)
Answer: B
15) Which of the following graphical symbols represents a minimum cardinality of one and a
maximum cardinality of many?
A)
B)
C)
D)
Answer: D
16) A relationship is diagrammed below using the [Min, Max] notation. Which of the diagrams
below represents the same relationship using the "crow's feet" notation?
A)
B)
C)
D)
Answer: D
17) Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge purchases
inventory from distributors at trade conventions. Each time Helge makes a purchase, the company
records the suppliers name, address, date, specific items purchased, price paid for each, and the total
amount spent. Helge later researches the inventory items to set the customer price. The company
assigns an inventory number to each item purchased and records the customer price for each item.
Helge buys price tags and display supplies from Alwin Incorporated, a company that sells them at all
trade conventions. All inventory and supplies purchases are immediately paid for with cash or with
checks from a bank account in Helge's name. All cash received from sales are also deposited to the
same bank account. Several times a year Helge rents display space at dealer conventions. A deposit is
always required, and the entire fee is due the day the convention starts. Helge records the deposit and
final payment, along with the convention's name and address, in the same worksheet on which
purchases of inventory and supplies are recorded.
Consider Helge's processes regarding the purchasing inventory and supplies, renting display space, and
paying for purchased items. A well-designed REA diagram would
A) include eight unique entities.
B) include nine unique entities.
C) include seven unique entities.
D) include ten unique entities.
Answer: A
A) reflect nine 1:N relationships.
B) reflect two M:N relationships.
C) reflect ten 1:N relationships.
D) include two 1:1 relationships.
Answer: A
A) reflect minimum cardinalities of 1 for the relationship between Vendor and Cash Disbursement
entities.
B) reflect the same number of 0 and 1 minimum cardinalities.
C) reflect more maximum cardinalities of M than of 1.
D) reflect maximum cardinalities of M for the relationship between Inventory and Purchase entities.
Answer: A
20) Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge
purchases inventory from distributors at trade conventions. Each time Helge makes a purchase, the
company records the suppliers name, address, date, specific items purchased, price paid for each,
and the total amount spent. Helge later researches the inventory items to set the customer price.
The company assigns an inventory number to each item purchased and records the customer price
for each item.
checks from a bank account in Helge's name. All cash received from sales are also deposited to the same
bank account. Several times a year Helge rents display space at dealer conventions. A deposit is always
required, and the entire fee is due the day the convention starts. Helge records the deposit and final
payment, along with the convention's name and address, in the same worksheet on which purchases of
inventory and supplies are recorded.
paying for purchased items. In a well-designed REA diagram, what entities would reflect economic
duality?
A) Purchases and Cash Disbursements
B) Display Space Rental and Cash Disbursements
C) Inventory and Purchases
D) Cash and Cash Disbursements
Answer: A
17.4 Read an REA diagram and explain what it reveals about the business activities and policies of
the organization being modeled.
1) Which of the following transactions is represented by the diagram below?
A) A junkyard holds weekly sales where it sells its entire inventory.
B) A shoe store sells products to consumers.
C) A stay-at-home mom creates furniture for doll houses. When one piece is finished, she sells it on
Amazon.com.
D) Netflix sells movies to consumers through its online downloading service.
Answer: B

Amazon.com.
Answer: A
Amazon.com.
Answer: C
Amazon.com.

Answer: D

A) a lumber yard where customers may pay with cash for all purchases
B) a buy-here-pay-here auto dealer where a car buyer sends monthly cash payments to the dealer
C) a consulting firm that offers a variety of consulting services to other businesses
D) a department store that allows customers to carry a balance and to make installment payments, if
they choose
Answer: A
they choose
Answer: B
they choose
Answer: C

they choose
Answer: D
A) Vendors send a bill for each inventory item purchased which is payable on receipt.
B) A single purchase of inventory is paid for with multiple payments.
C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept or
allow installment payments.
D) Some inventory purchases are paid for with multiple payments and some payments may apply
to multiple purchases.
Answer: B
Answer: C
Answer: D
A) Each sale is associated with a single order, and there is a time lag between the time an order is taken
and delivery of the product.
B) Each sale can be comprised of multiple orders, and each order can be associated with multiple
sales or no sales.
C) Each sale can be comprised of multiple orders, and each order can be associated with one or
more multiple sales.
D) Each sale is associated with a single order and, there is no time lag between the time an order is
taken and delivery of the product.
Answer: A
sales or no sales.
more sales.
D) Each sale is associated with a single order, and there is no time lag between the time an order is taken
Answer: B
sales or no sales.
more sales.
Answer: C
sales or no sales.
more sales.
Answer: D

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Chapter 17 Database Design Using the REA Data Model

A) REA is an acronym for Resources, Entities, and Agents.

C) REA data modeling could be referred to as an events-based model.

A) standardizing source document format.

B) identifying non-value added activities.

C) storing financial and nonfinancial data in the same database.

D) organizing data to simplify data retrieval and analysis.

A) only in the systems analysis stage

B) only in the design stage

C) in both the systems analysis and design stages

D) neither the systems analysis nor the design stages

5) A(n) diagram graphically depicts a database's contents by showing entities

6) In creating an entity-relationship diagram, is anything about which an organization wants

7) An entity-relationship diagram represents entities as and the relationships between them

A) can represent the contents of any database.

B) is only used in conjunction with REA models.

C) can show a limited number of entities and relationships.

D) is used only to design new databases.

9) Data modeling is an element of

A) only in the systems analysis stage

B) only in the conceptual design stage

C) in both the systems analysis and design stages

D) neither the systems analysis nor the design stages

A) the systems analysis stage

B) the conceptual design stage

C) the implementation and conversion stage

D) in all of the stages above

A) implementation and conversion.

C) database operation and maintenance.

17) It is industry standard to model relationships as in entity-relationship diagrams.

D) there is no industry standard

18) It is industry standard to model attributes as in entity-relationship diagrams.

D) There is no industry standard.

17.2 Use the REA data model to design an AIS database.

1) The REA data model

A) is used in many areas of business and science.

B) was developed specifically for use in designing accounting information systems.

C) classifies data into relationships, entities and accounts.

D) all of the above

A) Each event is linked to at least one resource that it affects.

B) Each event is linked to at least one other event.

C) Each event is linked to at least two participating agents.

D) All of the above are important rules.

3) Which is a true statement about the REA data model?

4) Relationships that affect the quantity of a resource are sometimes referred to as

5) The "give" event represents an activity which

A) includes a promise to engage in future economic exchanges.

B) increases the organization's stock of an economic resource.

C) reduces the organization's stock of a resource that has economic value.

D) none of the above

6) The "get" event represents an activity which

A) includes a promise to engage in future economic exchanges.

B) increases the organization's stock of an economic resource.

C) reduces the organization's stock of a resource that has economic value.

D) none of the above

8) REA models are usually depicted in which diagramming form?

A) an IOU from a customer

D) none of the above

A) an IOU from a customer

D) none of the above

A) an IOU from a customer

D) none of the above

15) Identify the notation often used to represent cardinality information.

D) none of the above