Question

Identify the three basic rules that apply to the REA model pattern.

Answer 1

REA Model:
The REA data model is a conceptual tool specifically designed to provide structure for designing an AIS database.
The REA data model identifies what entities should be included in the AIS database and prescribes how to structure relationships among the entities in the AIS
database. REA stands for resources, events, and agents. Resources are defined as those things that have economic value to the organization.
Events are the various business activities about which management wants to collect information for planning and control purposes.
Agents are the people and organizations that participate in events and about which information is desired for planning, control, and evaluation purposes.
Three basic rules that apply to the REA model pattern.
1. Each event is linked to at least one resource that it affects.
2. Each event is linked to at least one other event.
3. Each event is linked to at least two participating agen
Developing an REA diagram involves three steps:
1. Identity the basic events of interest (any activity about which management wants to collect information in order to plan, control, and evaluate performance).
2. Identify the resources affected by and the agents who participate in those events.
3. Use knowledge about the organization's business practices to add relationship cardinality information to the diagram.