The REA Model and E-R Diagrams

Read Case Study 14-23 “Ian’s Place” (The REA Model and E-R Diagrams) on page 457 in Core Concepts of Accounting Information Systems.

Write a 45- to 175-word response to question 1.

Complete the items identified for questions 2 and 3.

NOTE: For question 2 (E-R Diagram), use Figure 14-9 (page 446) in the textbook as a guide but with the information from the case. For question 3 (Database Tables), you can use Figure 14-10 (page 446) and Figure 14-12 (page 448) as a guide. NOTE: Be sure that the REA Model described in question 1, the E-R Diagram, and the Database Tables all include the same items for the Resources, Events, and Agents. Remember that the E-R Diagram has the resources on the left, the events in the middle, and the agents on the right. The tables need to contain all the pertinent information for that database. Microsoft Word is the preferred software to use in creating the diagrams since it has all the shapes and lines needed.

NOTE: The diagram and database tables need to be your own work, not copied from the Internet or other source. The purpose of the assignment is for you to learn how to create diagrams and database tables. The textbook gives examples (as stated above) so you have a guide in creating your own.

14-23. Ian’s Place (The REA Model and E-R Diagrams)Ian’s Place sells pet supplies to dog and cat owners. To sell its products, the marketing department requires sales personnel to call on the pet store retailers within their assigned geographic territories. Salespeople have an application on their mobile phones that allows them to record sales orders and send these sales orders directly to the company network for updating the company’s sales order file.Each day, warehouse personnel review the current sales orders in its file, and where possible, pick the goods and ready them for shipment. (Ian’s Place ships goods via common carrier, and shipping terms are generally FOB from the shipping point.) When the shipping department completes a shipment, it also notifies the billing department, which then prepares an invoice for the customer. Payment terms vary by customer, but most are “net 30.” When the billing department receives a payment, the billing clerk credits the customer’s account and records the cash received.


1. Identify the resources, events, and agents involved in the revenue process at Ian’s Place.

2. Develop an E-R diagram for this process.

3. Design the tables for this revenue process. Note that you will need tables for each resource, event, and agent, as well as tables for each many-to-many relationship.

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