Introduction

The term REA defines mainly three categories i.e., Resources, Event, Agent. So,
Resources are those things that have economic value to the organization, it includes two entities
such as Cash and Inventory. Event is the various business activities about which management wants
to collect information for planning or control purpose. There are two entities Sales and Receive cash.
Agent is the people and organization that participate in events and about whom information is
desired for planning, control and evaluation purpose, such as Employee and Customer. (Hall2013, p
482-483)

Feinman REA model of Sales/ Collection process

Place Order
Costumer

Reverses
Inventory Take Order Sales Clerk

Shipping Clerk

Ships
Ship Product

Costumers

Increases Remits
Cash Receive Cash

Cash Received Clerk

 In the above diagram it shows the flow of work to the different department, how they linked
between each other to perform a single task, It shows that When Customer to the Feinman
computers order the goods by internet or by hard copy (FAX), the system automatically places order
to the Feinman then after order taken be generate in the system. Second step is to check inventory
level which can or cannot be fulfilled the order given my agent. If it shows green light then process
order has been done and sales clerk to be informed.

Third step has to be Ship the goods to the customer and the mean time reduces the inventory level
that has to be recorded. When the goods receive by ship clerk then after customer, final step has to
be payment cycle, either way cash or credit. If is done by Cash it will receive the cash and increase in
cash account otherwise it will go to the cash remittance clerk or Account receivable.(Cengage
learning 2008)

Determining Cardinalities of Relationships

The final step in drawing an REA diagram for one transaction cycle is to add information about
relationship cardinalities. Cardinalities describes the nature of the relationship between two entities
by indicating how many instances of one entity can be linked to each specific instance of another
entity.. So, the relationship between the customer agent entity and sales agent entity in REA
diagram of FEINMAN COMPUTERS represents a set. The customer entity represents the set of
individual sales transactions that occur during the current fiscal period. Thus, in a relationship
database each row in the sales table would store information about a specific sales transaction.
Cardinalities define how many sales transaction can be associated with each other and conversely,
how many customer can be associated with each sales transaction.(Black & Brown 2010,p 290)

Cardinalities are represented by the pair of symbol next to an entity, the four row possible
combination of minimum and maximum cardinalities. The Minimum cardinality can be either zero
(0) or one (1), depending upon whether the relationship between the two entities is optional. The
Maximum cardinalities can be either one or many depending upon whether each instance of entity
A can be linked to at most one instance or potentially many instances of entity B.(Jones 2009,p 30)

Symbol Cardinalities Example Meaning

Minimum=0; A B Each instance of entity A may or
Maximum=1 may not be linked to any
instance of entity B, but can be
 linked to at most one instance of
entity B.
Minimum=1; A B Each instance of entity A must
Maximum=1 be linked to an instance of entity
B, and can only be linked to at
most one instance of entity B.
Minimum=0; A B Each instance of entity A may or
Maximum=many may not be linked to any
instance of entity B, but could be
linked to more than one instance
of entity B.
Minimum=1; A B Each instance of entity A must
Maximum=many be linked to at least one instance
of entity B, but can be linked to
many instances of entity B.

Let us now use the information from above table, the cardinalities of Sales and Customer
relationship. The minimum and maximum cardinalities next to the Customer entity are both one.
This pattern is the same as that in row two. Thus, the minimum cardinalities of one next to the
Customer entity indicated that each sale transaction must be linked to some specific customer. The
maximum cardinalities of one means that each sale transaction can be linked to at most only one
specific customer. This reflects normal business practices, only one legally identifiable customer is
held responsible for a sale and its subsequent payment .Now look at the cardinalities pair next to the
Sale entity as in row three in table , the minimum cardinality is zero, and maximum cardinality is
many. The zero minimum cardinalities means that the relationship is optional, a customer does not
have to be associated with any specific sale transaction. This allows Feinman computers to enter
information about prospective customers to whom it can send. The maximum cardinalities are many
indicating that a specific customer may and Feinman will be associated with multiple sale
transaction. As we see in row four minimum is one and maximum is many, this means that every
customer order or sale transaction must involved at least one inventory item but many involve
multiple different item. The minimum cardinalities of zero reflect the fact that an order may not yet
have been turned into an actual sale transaction. The maximum cardinalities of one indicate that
Feinman shop fills all customer order in full rather than making a number of partial
deliveries.(Romney & Steinbart 2009, p 559)

The department of primary keys and attributes come from an understanding of each table’s
purpose, which result from a detailed analysis of user deeds the database designer should select a
primary that logically and unequally defines the nonkey attributes in the table. In some cases, this
accomplishment with a simple sequential code, such as invoice number, check number, sales order
number. In other situation block code, group codes, alphabetic codes and mnemonic codes are
better choice.

Some table attributes are common to all organisations and can be derived from common
sense and adherence to best practices. Other attributes are unique to specify application and can be
derived only from thorough and detailed analysis of individual user views. Each attribute assigned to
a table should, however appear directly of indirectly in one or more user views. If data stored in a
table are not used in a document, report, or calculation that is reported in some way, then they
serve no purpose and should not be part of the database.

Tables , Keys and Attributes

Table name Primary Keys Foreign key Attributes

Inventory Item number Description, Warehouse location ,
Quantity on hand, Reorder point, on
order quantity, Available for sale,
unit cost , Retail cost, Turnover ratio,
Lead time, Usage rate, EOQ , Order
quantity, Stock out history, Scrap
history
Cash Account Balance
number
Verify availability Inquiry number Customer and Date, Start time , End time
employee number
Take order order number Inquiry number Order date, promised date, terms of
Costumer number trade
Employee number
Ship product Invoice number Order number Invoice amount, Shipped date, Due
Costumer number date , Close date
Employee number
Receive cash Remittance Costumer number Costumer Check number ,Data,
number Employee number Amount
Costumer Costumer name Name, Address, line of credit,
Available credit, Current Balance,
Last payment date
Employee Employee SSN , Name , Address, Date of birth,
number job title, Time hired, Pay rate,
Vacation time accrued
Inventory verify Item number Quantity Requested , Quantity on
link Inquiry number Hand , Sale,
Inventory order Item number Quantity Ordered
link Order number

Inventory ship link Item number Quantity Shipped , Actual Price

Invoice number
 2) REA MODEL OF K.CANNON

Flags items Process

Inventory Order product Purchasing Clerk

Receives

Cause
Ships

Supplier

Increase
Receive Product

Receiving Clerk

Prepares

Duality
Receives
Supplier

Decrease Process
Cash Disburse cash Cash Disbursement
Clerk
 In the above diagram it shows the flow of work to the different department, and show how they
work together for a single task. Yes it shows the relation between departments. First of all when order
is recognised, and recognizing the need of inventory, and clerk choose the supplier among the
alternatives and do the order. The inventory title indicates the records will be adjusted to show the
items are on order. At this stage they just place for goods but haven’t received yet means inventory
level will not increase The association between supplier and order product indicates that each order
goes to only one supplier and that particular supplier have zero or many orders during periods.

The second events entity is receive products, which is an economic event that causes a change
in an economic resource. It increases the inventory. Goods are received from supplier and receiving
clerk processes them. Which involves in counting, inspecting, transporting the products in into
warehouse. The cardinality between order products and receive products implies that any point of
time, an order may exists that has not been yet received.

The third events represent is disburse cash. This is the economic event, in this event it causes
the cash resources to be decreased. The association with the supplier entity implies that each
disbursement during the period. The association with the supplier entity implies that each
disbursement during the period. The association between disburse cash and receive products implies
that each product receipt is paid in full but many receipts may be combined and paid with single
disbursement to reduce check

Tables , Keys and Attributes

Table name Primary keys Foreign keys Attributes

Inventory Item Number Description, warehouse

location, Quantity on hand,
Record point, Unit cost,
stock history, economic order
quantity, Available for sale,
supplier number, retail price,
lead time
Cash Accounts number Balance

Order product Purchase order Supplier number Order date, expected delivery
date, expected total price
Receive Receive report Supplier number, employee Date received, Carrier, Total
product Cash Disb. Number, number, purchase order amount Due, Due
Account number number, Check number
Disburse cash Check number Supplier number, Amount, date

Order product Purchase order Supplier number Order date, expected delivery
date, expected total price
Receive Receive report Supplier number, employee Date received, Carrier, Total
product Cash Disb. Number, number, purchase order amount Due, Due
Account number number, Check number

Supplier Supplier number Name, address, Terms of

trade, Vendor lead time,
carrier used, on time delivery
record, incomplete shipment
records, Damaged shipment
records, Price dispute records
Employee Employee number Name, address, date of birth,
Job title, and date hired, pay
rate, vacation time accrued.

References :
Black ,A & Brown,P 2010, common characteristics, New University Press, Canada

Jones, B 2009, alternate markets an introduction, New University Press, Canada

Romney MB & Steinbart PJ 2009,accountin information systems, Pearson Prentice Hall, UK

Hall JA 2013, introduction to accounting systems, Southern Western, Canada

Cengage learning 2008, , introduction to accounting systems , view may 29,2013

http://www.uamont.edu/FacultyWeb/Hammett/PDF/AIS%20Solutions/Chapter%2010%20SM.pdf

Accounting Information System, 8th Edition, James A. Hall, chapter 10, page470 and 472.