Page 59 - Accounting Information Systems

30 PART I Overview of Accounting Information Systems

FI G U RE
1-15 EVENT DATABASE IN AN REA SYSTEM

CUSTOMER Table
(PK)
Cust Credit Billing
Num Name Address Tel Num Limit Date Anniver
23456 Smith 125 Elm St., City 610-555-1234 $5,000 12 12/9/89
INVOICE Table
(PK) (FK)
Invoice Invoice Ship Cust
Num Date Date Terms Carrier Num
98765 9/01/09 9/03/09 Net 30 UPS 23456

LINE ITEM Table
(PK) (FK)
Product Invoice Quant
Num Num Sold
X21 98765 5
Y33 98765 10

PRODUCT Table
(PK)
Product Sale Unit Reorder
Num Description Price Cost QOH Point
X21 Something or other $30 $22 200 50
Y33 Something else $20 $16 159 60

CASH REC Table
(PK) (FK)
Trans Cust Check Check Date
Num Num Num Amount Date Posted
77654 23456 451 $200 9/28/09 9/30/09

separate aspect of the transaction. Data pertaining to the customer, the invoice, specific items sold, and so
on can thus be captured for multiple uses and users. The tables of the database are linked via common
attributes called primary keys (PK) and embedded foreign keys (FK) that permit integration. In contrast,
the files in the traditional system are independent of each other and thus cannot accommodate such
detailed data gathering. As a result, traditional systems must summarize event data at the loss of poten-
tially important facts.
Traditional accounting records including journals, ledgers, and charts of accounts do not exist as phys-
ical files or tables under the REA model. For financial reporting purposes, views or images of traditional
accounting records are constructed from the event tables. For example, the amount of Smith’s account re-
ceivable balance is derived from [total sales (Quant sold * Sale price) less cash received (Amount) ¼ 350
200 ¼ 150]. If necessary or desired, journal entries and general ledger amounts can also be derived from
these event tables. For example, the Cost-of-Goods-Sold control account balance is (Quant sold * Unit
cost) summed for all transactions for the period.