Question

There are differences between an REA diagram and an ER diagram. In a 1–2-page paper, describe at least 3 differences and 3 similarities between the two diagrams.

Your paper should include the following:

• An explanation of what each acronym stands for and why
• Effects (of both REA and ER diagrams) on company's financial statements
• Implications of using one diagram over the other and vice versa

Answer 1

REA Diagram	ER Diagram
REA represent 3 entity types Resources, Events, Agents	ER represents entity and relationships. There are only one the of entity.
Every economic transaction is an event where there are two different agents exchange a resource. Tea digarm gives a pictorial representation of the same.	Every entity have a relationships with other entities either in one form or other form. These relationships are graphically represented with the help of ER Diagrams.
REA diagram depicting the flow of transaction.	ER Diagrams depicting the relationship between the entities. Like one to one, one to many, many to one etc.

Similarities.

Both REA and ER Diagrams are logical relationship diagrams.

These are generally used in the accounting information systems to make the quality implementation of the relationship in the system.

Both REA diagram and ER Diagrams use same set of symbols to denote the relationship and flow path.