DIFFERENCES BETWEEN ER AND REA DIAGRAMS ER and REA diagrams differ visually in a significant way.

Entities in ER diagrams are of one class, and their proximity to other entities is determined by their
cardinality and by what is visually pleasing to keep the diagrams readable. Entities in an REA diagram,
however, are divided into three classes (resources, events, and agents) and organized into constellations
by class on the diagram. This arrangement is illustrated in Figure 10-4. Note that during view integration
(discussed later), when several individual REA diagrams are merged to form a single global model, the
constellations of entities may necessarily be altered. As a design tool during the view modeling phase,
however, the constellation convention is typically followed. A second difference between ER and REA
diagrams involves the sequencing of events. ER diagrams present a static picture of the underlying
business phenomena. Relationships between data are shown through cardinality and associations, but
the sequence of activities that determine the cardinality and associations is not clearly represented. REA
diagrams, however, 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. The third difference between ER and REA diagrams
pertains to naming conventions for entities. In ER diagrams, entity names are always represented in the
singular noun form. REA modeling applies this rule when assigning names to resource and agent entities.
Event entities, however, are given verb (action) names such as Sell Inventory, Take Order, or Receive
Cash. The reader should, therefore, be careful to not confuse an event entity with a process. Event
entities on an REA diagram represent and describe database tables that will store data about processes,
but they are not representing or describing the processes themselves