Question

The basic REA template includes links between two events and links between events and resources and between events and agents. Why do you think the basic REA template does not include direct links between A.) two resources B.) Two agents or C.) between resources and agents?

Answer 1

The REA template has been developed for helping in modelling an organization’s transactions that are of economic nature and, thus, centers on the events that take place, the resources they affect, and the agents participating in those events.

Two events are linked in order to reflect causal sequence or economic duality.

A. Two Resources: Two resources are not directly linked as most resources are independent and thus do not need to be linked directly. For example, inventory and debtors do not directly affect one another, but only do so through events such as the sale of inventory on credit and subsequent receipt of cash from debtors. Therefore; Inventory and debtors does not include direct link in a REA template.

B. Two Agents: The basic REA template does not directly link agents to one another because they often do not influence one another in an event. Two agents are separate, so the need to link them certainly doesn’t arise except under certain situations.

C. Between resources and agents: REA template does not include direct links between agents and resources because the reason to track such relationships do not arise.