Implementing an rea model in a relational database suggested answers to discussion questions


Refer to Figure 18-4 and Table 18-1. How would you determine the amount of cash that Fred’s Train Shop has at any point in time?



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18.5 Refer to Figure 18-4 and Table 18-1. How would you determine the amount of cash that Fred’s Train Shop has at any point in time?
To calculate the amount of cash that Fred’s Train Shop has at a particular point in time, you would need to query three tables: Cash, Disburse Cash, and Receive Cash. The Cash table would include the cash on hand at the beginning of the current fiscal year. The Disburse Cash table includes an attribute for the amount of each disbursement made during the current fiscal year; summing this column would yield total cash outflows. Similarly, the Receive Cash table includes an attribute showing the amount of each cash receipt during the current fiscal year; summing this column would yield total cash inflows. Thus, cash on hand at particular point in time equals beginning cash on hand plus the sum of all receipts minus the sum of all disbursements.

18.6 Why does Figure 18-4 show only one cash disbursement entity if Fred’s Train Shop uses a general operating checking account for purchases of inventory, supplies, and operating expenses such as rent but also uses a separate checking account for payroll?
REA models do not represent actual physical accounts but types of accounts. Thus, even though Fred’s Train Shop uses two checking accounts, the REA displays a single entity for cash. This entity contains information about all of Fred’s individual checking accounts. Each row in the cash table for Fred’s train shop would provide information about a specific checking account. Each account would have its own primary key.
Then, when there is a cash disbursement it would be linked to the specific record or row in the cash table that represented which of the two checking accounts for Fred’s Train Shop was used to make a particular disbursement. This linking would involve using the primary key of the appropriate checking account as a foreign key in that row in the Disburse Cash event table.

18.7 Examine Figure 18-4 and Table 18-1. Why do the Inventory, Customers, and Suppliers tables all have an attribute that contains data about the balance at the beginning of the current fiscal period?
The reason that all three entities contain an attribute that stores the beginning balance is that the related event tables typically contain information for only the current year. Thus, the beginning balance attribute represents information about prior years’ events.
This information about beginning balances is needed in order to calculate current balances at any point in time. For example, the Inventory table would show the quantity on hand for each inventory item at the beginning of the current fiscal year. The M:N table linking the Receive Inventory and Inventory tables includes an attribute for the quantity received of a specific inventory item. The M:N table linking the Inventory and Sales tables includes an attribute for the quantity sold of a particular item. Thus, the quantity on hand at a particular point in time equals the beginning quantity on hand plus the sum of all receipts of that inventory item minus the sum of all sales of that item.
The Customer and Supplier tables contain information about the beginning balances of Accounts Receivable and Accounts Payable for specific customers and suppliers, respectively. Current balances can then be computed by adding the sum of all sales to a customer (purchases from a supplier) and subtracting the sum of all payments from a customer (payments to a supplier) during the current fiscal year.





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