AIS Chapter 18

14) Which of the statements below is false with regards to creating database tables from an REA diagram? A) M:N relationships must be implemented as separate tables. B) 1:N relationships are implemented with the primary key of the 1 side becoming a foreign key on the N side. C) 1:1 relationships are implemented with the primary key of either entity included as a foreign key in the table representing the other entity. D) All of the above are true.

D) All of the above are true.

34) How many tables are needed to implement an REA data model that has three distinct entities, two M:N relationships and two 1:N relationships in a relational database? A) 5 B) 7 C) 8 D) 10

A) 5

14) Which entity is most likely to be part of both the payroll cycle and the revenue cycle? A) Cash B) Customer C) Receive Goods D) Inventory

A) Cash

30) Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge purchases inventory from distributors at trade conventions. Each time Helge makes a purchase, the company records the suppliers name, address, date, specific items purchased, price paid for each, and the total amount spent. Helge later researches the inventory items to set the customer price. The company assigns an inventory number to each item purchased and records the customer price for each item. Helge buys price tags and display supplies from Alwin Incorporated, a company that sells them at all trade conventions. All inventory and supplies purchases are immediately paid for with cash or with checks from a bank account in Helge's name. All cash received from sales are also deposited to the same bank account. Several times a year Helge rents display space at dealer conventions. A deposit is always required, and the entire fee is due the day the convention starts. Helge records the deposit and final payment, along with the convention's name and address, in the same worksheet on which purchases of inventory and supplies are recorded. Which of the following would be an attribute in the table for Display Space Rental? A) Convention name B) Deposit paid C) Balance paid D) Convention address

A) Convention name

6) Why might the same REA diagram result in different relationship cardinalities? A) Different organizations might have different business policies. B) Different designers might implement an REA diagram differently. C) Different consultants might draw an REA diagram differently. D) Errors occur in the REA diagram.

A) Different organizations might have different business policies.

11) Information traditionally found in journals is stored where in an REA database? A) Event entity B) Agent entity C) Relationship D) Resource entity

A) Event entity

4) Which of the following is not one of the steps in implementing an REA diagram in a relational database? A) Implement many-to-many relationships with foreign keys. B) Create tables for entities. C) Assign attributes to tables and identify primary keys. D) Implement one-to-many relationships with foreign keys.

A) Implement many-to-many relationships with foreign keys.

24) In a relational database, which of the following attributes would typically be represented by a foreign key in the table that stores data about a Receive Inventory entity? A) Purchase order number B) Payment terms C) Product code D) Date

A) Purchase order number

20) In a relational database designed according to the REA model, where is information about an organization's liabilities generally stored? A) Resource entities B) Agent entities C) Event entities D) All of the above

A) Resource entities

29) Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge purchases inventory from distributors at trade conventions. Each time Helge makes a purchase, the company records the suppliers name, address, date, specific items purchased, price paid for each, and the total amount spent. Helge later researches the inventory items to set the customer price. The company assigns an inventory number to each item purchased and records the customer price for each item. Helge buys price tags and display supplies from Alwin Incorporated, a company that sells them at all trade conventions. All inventory and supplies purchases are immediately paid for with cash or with checks from a bank account in Helge's name. All cash received from sales are also deposited to the same bank account. Several times a year Helge rents display space at dealer conventions. A deposit is always required, and the entire fee is due the day the convention starts. Helge records the deposit and final payment, along with the convention's name and address, in the same worksheet on which purchases of inventory and supplies are recorded. Which of the following would not be an attribute in the Inventory table? A) Total amount of purchase B) Price paid for inventory C) Asking price D) Inventory number

A) Total amount of purchase

8) Which of the statements below is false with regards to generating financial statements from an REA-based relational database? A) It is possible to use a completed REA diagram to guide the writing of queries to produce the information that would be included in financial statements. B) Many financial statement items can be displayed by querying a single table. C) It is unnecessary to understand the REA data model to know which tables need to be included in each query to generate the correct answers to financial statement questions. D) A major advantage of the REA data model is that it integrates non-financial and financial data.

C) It is unnecessary to understand the REA data model to know which tables need to be included in each query to generate the correct answers to financial statement questions.

9) When combining two REA diagrams by merging common entities, changes in the cardinality of the merged entity is needed when it is a(n) A) agent. B) event. C) relationship. D) resource.

B) event.

7) Because information about temporal imbalances between two ________, such as accounts receivable and accounts payable, is needed so frequently, such calculated values are sometimes stored as ________ in the appropriate tables. A) events; agents B) events; attributes C) resources; agents D) resources; attributes

B) events; attributes

4) An integrated REA diagram merges multiple copies of some entities in order to A) minimize the repetition of agent entities. B) maximize the legibility of the diagram by avoiding the need to have relationship lines cross one another. C) Both A and B are true. D) Both A and B are false.

B) maximize the legibility of the diagram by avoiding the need to have relationship lines cross one another.

5) Which of the following is not one of the three steps to implementing an REA diagram in a relational database? A) Assign attributes to appropriate tables. B) Create a table for each distinct entity in the diagram and for each many-to-many relationship. C) Link every event to at least one resource. D) Use foreign keys to implement one-to-one and one-to-many relationships.

C) Link every event to at least one resource.

2) When comparing REA diagrams used to design an AIS with a traditionally designed AIS, A) traditional AIS information, such as journals and ledgers no longer exist. B) similar information is present as in a traditional AIS, but stored in a different format. C) queries are used to input data into the AIS. D) an REA designed AIS cannot recreate a traditional journal.

B) similar information is present as in a traditional AIS, but stored in a different format.

21) In a relational database designed according to the REA model, where is information about accounts receivable stored? A) Event entities B) Agent entities C) Both A and B D) None of the above

C) Both A and B

13) Which entity is most likely to be part of both the payroll cycle and the expenditure cycle? A) Receive Goods B) Customer C) Disburse Cash D) Inventory

C) Disburse Cash

19) In a relational database designed according to the REA model, where is information about transactions stored? A) Resource entities B) Agent entities C) Event entities D) all of the above

C) Event entities

6) Which of the following statements is not true with regards to a correctly drawn enterprise-wide REA diagram? A) Every event must be linked to at least one resource. B) Merging two transaction cycles on a common event may affect the minimum cardinalities between the merged event and the other events. C) Events can only be merged if they share the same resources and events. D) Creating a set of tables from an REA diagram automatically results in a well-structured relational database.

C) Events can only be merged if they share the same resources and events.

5) Combining REA diagrams for individual transaction cycles into a single, enterprise-wide model adds two more rules to the three basic principles for drawing REA diagrams. Which of the following is not one of those two new rules? A) Every resource must be linked to at least one event that increments that resource and to at least one event that decrements that resource. B) If a specific event can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the minimum cardinality between that event and every other event with which it may be associated must be 0. C) If a specific event can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the maximum cardinality between that event and every other event with which it may be associated must be 0. D) All of the above are new rules for drawing integrated REA diagrams.

C) If a specific event can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the maximum cardinality between that event and every other event with which it may be associated must be 0.

39) Rebus Fashions provides haircuts to men and women. Rebus uses an REA database to record information that is important to the firm. Rebus has an M:N table named "Customer-Sale" where it keeps information about customer sales. Identify the attribute below that most likely does not belong in the Customer-Sale table. A) Date of sale B) Time hair cut was started C) Name of customer D) All of the above are appropriate attributes for the Customer table.

C) Name of customer

1) Integrating separate REA diagrams developed for individual transaction cycles into a single, comprehensive enterprise-wide data model A) is possible. B) requires understanding what the cardinalities in each separate diagram reveal about the organization's business policies and activities. C) provides a single comprehensive enterprise-wide model of the organization. D) All of the above are true.

D) All of the above are true.

31) Explain a completeness check.

The list of attributes that users and management want included in the database provides a means to check and validate the implementation process. Every attribute in that list should appear in at least one table, as either a primary key or "other" attribute. Checking this list against the table column names may reveal not only the fact that a particular attribute has not been assigned to the appropriate table in the database but may even indicate the need to modify the REA diagram itself.

28) Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge purchases inventory from distributors at trade conventions. Each time Helge makes a purchase, the company records the suppliers name, address, date, specific items purchased, price paid for each, and the total amount spent. Helge later researches the inventory items to set the customer price. The company assigns an inventory number to each item purchased and records the customer price for each item. Helge buys price tags and display supplies from Alwin Incorporated, a company that sells them at all trade conventions. All inventory and supplies purchases are immediately paid for with cash or with checks from a bank account in Helge's name. All cash received from sales are also deposited to the same bank account. Several times a year Helge rents display space at dealer conventions. A deposit is always required, and the entire fee is due the day the convention starts. Helge records the deposit and final payment, along with the convention's name and address, in the same worksheet on which purchases of inventory and supplies are recorded. Which of the following would not be an attribute in the Purchases table? A) address where purchase was made B) person's name or company name from whom the purchase was made C) date of purchase D) total amount of purchase

A) address where purchase was made

18) In an integrated REA diagram, every resource must be must be linked to A) at least two events. B) at least two agents. C) at least one other resource. D) at least two other resources.

A) at least two events.

35) Identify the attribute below that would not make a good primary key. A) birthdate B) social security number C) a unique number automatically generated by the system D) cell phone number

A) birthdate

22) In an REA diagram, resource entities A) can be linked to event entities in Business Cycle A and to event entities in Business Cycle B. B) cannot be linked to event entities in Business Cycle A and to event entities in Business Cycle B. C) cannot be linked to agent entities. D) none of the above

A) can be linked to event entities in Business Cycle A and to event entities in Business Cycle B.

10) Integrating separate REA diagrams into a single comprehensive enterprise-wide model of the organization requires understanding what the ________ in each separate diagram reveal about the organization's business policies and activities. A) cardinalities B) data C) events D) transactions

A) cardinalities

11) When integrating separate REA diagrams, A) common resources are placed between the events that affect them. B) each resource is connected to two agents. C) resources are duplicated to show the give and get of economic duality relationships. D) resources are merged if both events in the stockflow relationship are modeled.

A) common resources are placed between the events that affect them.

1) The primary key for a Purchase-Inventory table that consists of the Purchase Order Number and the Inventory Item Number, is known as a A) concatenated key. B) foreign key C) primary key. D) dual key.

A) concatenated key.

3) An integrated REA diagram could contain multiple copies of A) customers. B) sales. C) inventory. D) sales-inventory.

A) customers.

5) In an REA-based relational database, the information normally found in a ________ is contained in the tables used to record data about ________. A) journal; events B) journal; resources C) ledger; events D) ledger; resources

A) journal; events

3) The type of relationship between two entities is determined by A) maximum cardinalities only. B) minimum cardinalities only. C) minimum and maximum cardinalities. D) median cardinalities.

A) maximum cardinalities only.

2) An integrated REA diagram merges multiple copies of ________ and ________ entities but retains multiple copies of ________ entities. A) resource; event; agent B) event; agent; resource C) resource; agent; event D) None of the above. An integrated REA diagram merges multiple copies of all entities.

A) resource; event; agent

23) When integrating multiple REA diagrams into an integrated REA diagram, to merge an event that appears in both business cycle REA diagrams, A) the event that appears in both business cycle REA diagrams may be linked to either an event that is part of one business cycle or to an event that is part of another business cycle. B) the event that appears in both business cycle REA diagrams may be linked to an event that is part of one business cycle and to an event that is part of another business cycle. C) One cannot merge an event that appears in both business cycles. D) none of the above

A) the event that appears in both business cycle REA diagrams may be linked to either an event that is part of one business cycle or to an event that is part of another business cycle.

17) In an integrated REA diagram, every event must be linked to A) at least two resources. B) at least two agents. C) at least one other event. D) at least two other events.

B) at least two agents.

17) What are the advantages of the REA data model over the traditional AIS model?

Answer: A major advantage of the REA data model is that it integrates non-financial and financial data in the AIS and makes both types of data easily accessible to management. In contrast to the REA data model, the general ledger in traditionally designed AISs uses the chart of accounts to store and organize data based on the structure of financial statements. Consequently, traditional AISs contain only data about the financial aspects of transactions. Other information that may be of use to management, such as the time of day a sale occurred or the reason why a customer was purchasing a specific item, would have to be stored in a separate database or information system. The existence of separate systems makes it more difficult for management to easily and quickly access the information it needs. It also provides opportunities for data entry errors to create inconsistencies between systems, thereby reducing the utility of any reports that are generated. Thus, a major benefit of using the REA model as the basis for designing an AIS is the ability to easily integrate information that traditionally appears in financial statements with other, non-financial information necessary to effectively manage operations and evaluate performance. It is vitally important that an organization's AIS be capable of storing both traditional financial measures and other operational performance measures.

16) Explain where in the REA model you can find the information normally found in a journal.

Answer: In traditional AISs, journals provide a chronological listing of transactions. In a relational database designed according to the REA data model, event entities store information about transactions. Thus, the information normally found in a journal is contained in the tables used to record data about events. For example, each row in the Sales event table contains information about a particular sales transaction. Thus, a sales journal can be produced by writing a query that displays the appropriate entries in the sales table for a given period. In a similar manner, queries of the Order Inventory event and Cash Disbursements event tables can be used to generate purchases and cash disbursements journals.

15) Explain where in the REA model you can find the information normally found in a ledger.

Answer: In traditional AISs, ledgers are master files that contain cumulative information about specific accounts. In a relational database designed according to the REA data model, resource and agent entities contain permanent information that is carried over from one fiscal year to the next. Thus, much of the information about an organization's assets that is traditionally recorded in ledgers is stored in resource tables in an REA-based relational database.

18) How many tables are needed to implement an REA data model that has five distinct entities, two M:N relationships and three 1:N relationships in a relational database? A) 5 B) 7 C) 8 D) 10

B) 7

33) How many tables are needed to implement an REA data model that has four distinct entities, three M:N relationships and one 1:N relationships in a relational database? A) 5 B) 7 C) 8 D) 10

B) 7

17) How many tables are needed to implement an REA data model that has six distinct entities, three M:N relationships and four 1:N relationships in a relational database? A) 6 B) 9 C) 11 D) 13

B) 9

6) Which of the following is false with regards to REA models? A) Many financial statement accounts are represented as resources in the REA model. B) Accounts such as Accounts Receivable show up as entities in the REA model. C) Some accounts represent an imbalance between two related events in the REA model. D) Much of the information about an organization's assets that is traditionally recorded in ledgers is stored in resource tables in an REA-based relational database.

B) Accounts such as Accounts Receivable show up as entities in the REA model.

15) Which entity is most likely to be part of the payroll cycle, expenditure cycle, and the revenue cycle? A) Customer B) Cash C) Supplier D) Inventory

B) Cash

7) What is the first step to implementing an REA diagram in a relational database? A) Assign attributes to appropriate tables. B) Create a table for each distinct entity in the diagram and for each many-to-many relationship. C) Identify cardinalities. D) Use foreign keys to implement one-to-one and one-to-many relationships.

B) Create a table for each distinct entity in the diagram and for each many-to-many relationship.

22) Which of the following attributes would typically be included in the table that stores data about the Customer entity in a relational database? A) Invoice number B) Credit limit C) Product code D) Backorder

B) Credit limit

15) Which of the following is not part of a "final accuracy check" when creating relational tables from an REA diagram? A) Every attribute in every table is single-valued (i.e., each table is a flat file). B) Every event must be linked to at least one resource. C) Every table must have a primary key. D) Other non-key attributes in each table must be either a fact about the thing designated by the primary key or foreign keys used to link that table to another table.

B) Every event must be linked to at least one resource.

23) In a relational database, which of the following attributes would typically be included in the table that stores data about the Vendor entity? A) Invoice number B) Outstanding balance C) Product code D) Inventory

B) Outstanding balance

13) A query that extracts, for a given time period, all sales events for which there is no corresponding receive cash event on the date of the sales event will yield A) a cash account ledger. B) a credit sales journal. C) an accounts receivable ledger. D) an accounts payable journal.

B) a credit sales journal.

11) The primary key for M:N relationship tables A) is a single attribute. B) always consists of two attributes. C) is the primary key of the most important entity linked to that relationship. D) does not exist. Many-to-many relationship tables only use foreign keys.

B) always consists of two attributes.

37) Rebus Fashions provides haircuts to men and women. Rebus uses an REA database to record information that is important to the firm. Rebus has a table named "Employee" where it keeps information about its hair stylists. Identify the attribute below that most likely does not belong in the Employee table. A) Stylist phone number B) Stylist hair cut specialties C) Number of haircuts provided by a stylist on a given day D) All of the above are appropriate attributes for the Employee table.

C) Number of haircuts provided by a stylist on a given day

40) Rebus Fashions provides haircuts to men and women. Rebus charges $10 per haircut, no matter what type of haircut the customer selects. Rebus uses an REA database to record information that is important to the firm. Rebus has an M:N table named "Customer-Sale" where it keeps information about customer sales. Identify the attribute below that most likely does not belong in the Customer-Sale table. A) Date of sale B) Time hair cut was finished C) Price of haircut D) All of the above are appropriate attributes for the Customer table.

C) Price of haircut

13) Which of the statements below is false with regards to the tables for M:N relationships? A) Non-key attributes may be included. B) Multiple attribute primary keys are used. C) Single attribute primary keys may be used. D) Concatenated keys are used.

C) Single attribute primary keys may be used.

9) Which of the following is false with regards to creating database tables from an REA diagram? A) A properly designed relational database has a table for each distinct entity in an REA diagram. B) A properly designed relational database has a table for each many-to-many relationship in an REA diagram. C) To reduce confusion, table names should not duplicate REA diagram entities' names. D) Many-to-many relationships will be shown in tables with hyphenated concatenations of the entities' names.

C) To reduce confusion, table names should not duplicate REA diagram entities' names.

25) In a relational database, which of the following attributes would typically be represented by a foreign key in the table that stores data about a Disburse Cash entity? A) Amount B) Date C) Vendor number D) Product number

C) Vendor number

12) A query that extracts, for a given time period, the total amount of all sales events for which there is no corresponding receive cash event will yield A) a cash account ledger. B) a credit sales journal. C) an accounts receivable ledger. D) an accounts payable journal.

C) an accounts receivable ledger

19) In an integrated REA diagram, every agent must be must be linked to A) at least one resource. B) at least two resources. C) at least one event. D) at least two events.

C) at least one event.

12) Attributes other than the primary key are A) included to satisfy transaction processing requirements. B) included to meet management's information needs. C) both A and B D) none of the above

C) both A and B

19) Which table is most likely to have a concatenated key? A) customer B) sales C) customer-sales D) accounts receivable

C) customer-sales

21) When integrating multiple REA diagrams into an integrated REA diagram, merging redundant resources A) always affects minimum cardinalities associated with the merged event. B) sometimes affects minimum cardinalities associated with the merged event. C) never affects minimum cardinalities associated with the merged event. D) none of the above

C) never affects minimum cardinalities associated with the merged event.

9) Which of the statements below is false when comparing the REA model to the traditional AIS model? A) Traditional AISs contain only data about the financial aspects of transactions. B) A major advantage of the REA data model is that it integrates non-financial and financial data in the AIS and makes both types of data easily accessible to management. C) In the REA model, many financial statement items can be displayed by querying a single table. D) Accounts in the traditional AIS are analogous to resources in the REA-based relational database.

D) Accounts in the traditional AIS are analogous to resources in the REA-based relational database.

3) Which of the following is/are true with regards to using REA diagrams to retrieve information from a database? A) Although neither journals nor ledgers appear explicitly in an REA diagram, each can be created through appropriate queries. B) The information normally found in a journal is contained in the tables used to record data about events. C) Much of the information about an organization's assets that is traditionally recorded in ledgers is stored in resource tables in an REA-based relational database. D) All of the above

D) All of the above

38) Rebus Fashions provides haircuts to men and women. Rebus uses an REA database to record information that is important to the firm. Rebus has a table named "Customer" where it keeps information about its customers. Identify the attribute below that most likely does not belong in the Customer table. A) Customer hair color B) Customer hair style C) Customer address D) All of the above are appropriate attributes for the Customer table.

D) All of the above are appropriate attributes for the Customer table.

8) Which of the statements below is false with respect to enterprise-wide REA diagrams? A) Merging two or more REA diagrams that contain the same resource entity does not require any changes to the cardinality pairs in the individual diagrams. B) Merging two or more diagrams that contain a common event entity, however, often requires changing the minimum cardinalities associated with the other events to 0, to reflect the fact that the merged event may be connected to any one of several different events, but not to all of them simultaneously. C) The minimum cardinalities associated with agents may also have to be changed to 0. D) All of the above are true.

D) All of the above are true.

12) Which entity is most likely to be part of both the revenue cycle and the expenditure cycle? A) Receive Goods B) Customer C) Receive Cash D) Inventory

D) Inventory

16) Which of the following is a redundant entity that would be merged when two cycles are combined? A) Customer B) Employee C) Vendor D) Inventory

D) Inventory

4) Much of the information about an organization's assets that is traditionally recorded in ledgers is stored in ________ tables in an REA-based relational database. A) Account B) Agent C) Event D) Resource

D) Resource

8) Which of the following is true with regards to REA diagrams and relational databases? A) A well-designed relational database is the starting point for creating an REA diagram. B) A well-designed REA diagram minimizes update, insert or delete anomaly problem when the diagram is implemented into a relational database. C) REA diagrams and database design are generic across organizations. D) The design of a relational database is specific to the organization being modeled.

D) The design of a relational database is specific to the organization being modeled.

7) Which of the below statements is false with respect to REA diagrams for individual transaction cycles? A) They depict basic give-to-get economic duality relationships. B) They usually provide only a partial view of resources. C) They need to be combined in order to provide a comprehensive enterprise-wide data model. D) They show both how resources are acquired and how they are used.

D) They show both how resources are acquired and how they are used.

18) Which of the following elements found in a traditional AIS system are not represented as entities in an REA relational database, but rather must be retrieved through the use of queries? A) accounts receivable B) the general ledger C) accounts payable D) all of the above

D) all of the above

32) Constructing a well-structured, well-developed REA diagram eliminates which anomaly problem(s)? A) update B) insert C) delete D) all of the above

D) all of the above

14) A query that extracts, for a given time period, all purchases for which there is no corresponding disburse cash event will yield A) a cash account ledger. B) a credit sales journal. C) an accounts receivable ledger. D) an accounts payable journal.

D) an accounts payable journal.

1) Nonfinancial information should be collected because A) it may indicate events that may affect resources. B) it can be used to plan other activities. C) it can be used in transaction processing. D) both A and B

D) both A and B

2) When using an REA diagram to develop a database, a many-to-many relationship must be A) broken into two, one-to-one relationships. B) combined into a single one-to-one relationship. C) combined into a one-to-many relationship. D) broken into two, one-to-many relationships.

D) broken into two, one-to-many relationships.

36) From the choices below, identify the attribute below that would make the best primary key. A) height (in inches) B) date of first purchase C) zip code D) customer telephone number

D) customer telephone number

16) Concatenated keys are A) only needed when combining two or more REA diagrams. B) foreign keys used to implement 1:N or 1:1 relationships. C) multiple attribute keys used to implement 1:N relationships. D) required to implement M:N relationships.

D) required to implement M:N relationships.

10) The major benefits of using the REA model as the basis for designing an AIS include all of the following except A) the REA data model integrates non-financial and financial data in the AIS. B) the REA data model makes both non-financial and financial data easily accessible to management. C) the REA data model provides the basis for building the kind of flexible AIS that is responsive to management's changing information needs. D) the REA data model reduces the need for accountants to understand the underlying accounting journals and ledgers.

D) the REA data model reduces the need for accountants to understand the underlying accounting journals and ledgers.

10) When assigning attributes to each table, A) the database designer must interview users to identify which facts should be included in the database. B) the database designer must interview management to identify which facts should be included in the database. C) the database designer must use the REA diagram to help determine in which tables those facts belong. D) the database designer must do all of the above.

D) the database designer must do all of the above.

20) Explain the five rules for drawing integrated REA diagrams.

Every event must be linked to at least one resource. Every event must be linked to two agents who participate in that event. Every event that involves the disposition of a resource must be linked to an event that involves the acquisition of a resource. (This reflects the economic duality underlying "give-to-get" economic exchanges.) Every resource must be linked to at least one event that increments that resource and to at least one event that decrements that resource. If a specific event, referred to as the focal event, can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the minimum cardinality between that focal event and every other event with which it may be associated must be 0.