Chapter 17 The REA Data Model: Accounting Information Systems, 12e (Romney/Steinbart)

Accounting Information Systems, 12e (Romney/Steinbart)
Chapter 17 The REA Data Model
1) Which of the following statements about REA modeling and REA diagrams is false?
A) REA is an acronym for Resources, Entities, and Agents.
B) REA data modeling does not include traditional accounting elements such as ledgers, chart of
accounts, debits and credits.
C) REA data modeling could be referred to as an events-based model.
D) REA diagrams must include at least two activities, which together represent a give-get economic
exchange.
Answer: A
2) What is the standard cardinality pattern for a relationship between an event and an agent?
A) 1:1
B) 0:1
C) 0:N
D) 1:N
Answer: D
3) The REA data model approach facilitates efficient operations by all the following except
A) standardizing source document format.
B) identifying non-value added activities.
C) storing financial and nonfinancial data in the same database.
D) organizing data to simplify data retrieval and analysis.
Answer: A
4) The process of defining a database so that it faithfully represents all aspects of the organization
including its interactions with the external environment is called
A) data modeling.
B) data designing.
C) data development.
D) data definition.
Answer: A
5) In which stage(s) of the database design process does data modeling occur?
A) only in the systems analysis stage
B) only in the design stage
C) in both the systems analysis and design stages
D) neither the systems analysis nor the design stages
Answer: C
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6) A(n) ________ diagram graphically depicts a database's contents by showing entities and
relationships.
A) data flow
B) flowchart
C) entity-relationship
D) REA
Answer: C
7) On an entity-relationship (E-R) diagram, anything about which an organization wants to collect and
store information is called
A) a data model.
B) an entity.
C) a schema.
D) a tuple.
Answer: B
8) An entity-relationship (E-R) diagram represents entities as ________ and the relationships between
them as lines and ________.
A) circles; squares
B) squares; diamonds
C) rectangles; diamonds
D) rectangles; circles
Answer: C
9) An entity-relationship (E-R) diagram
A) can represent the contents of any database.
B) are only used in conjunction with REA models.
C) can show a limited number of entities and relationships.
D) are used only to design new databases.
Answer: A
10) The REA data model

A) is used in many areas of business and science.
B) was developed solely for use in designing accounting information systems.
C) classifies data into relationships, entities and accounts.
D) all of the above
Answer: B
11) Which of the following is not one of the rules in creating an REA data model?
A) Each event is linked to at least one resource that it affects.
B) Each event is linked to at least one other event.
C) Each event is linked to at least two participating agents.
D) All of the above are important rules.
Answer: D
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12) Which is a true statement about the REA data model?
A) The REA data model classifies entities into three distinct categories.
B) The term REA is an acronym that stands for resources, entities, and agents.
C) Using an REA data model is not helpful when creating an R-E diagram.
D) The "E" in the REA data model stands for things that have an economic value to the organization.
Answer: A
13) An REA diagram must link every event to at least one ________ and two ________.
A) resource; agents
B) agent; resources
C) transaction; entities
D) resource; relationships
Answer: A
14) Each event in an REA model will in most cases have at least one ________ agent and one ________
agent involved with the event.
A) internal; resource
B) external; entity
C) internal; employee
D) internal; external
Answer: D
15) Relationships that affect the quantity of a resource are sometimes referred to as ________
relationships.
A) commitment
B) exchange
C) stockflow
D) duality
Answer: C
16) The "give" event represents an activity which

A) includes a promise to engage in future economic exchanges.
B) increases the organization's stock of an economic resource.
C) reduces the organization's stock of a resource that has economic value.
D) none of the above
Answer: C
17) The "get" event represents an activity which

A) includes a promise to engage in future economic exchanges.
B) increases the organization's stock of an economic resource.
C) reduces the organization's stock of a resource that has economic value.
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Answer: B
18) Which of the following statements is true about the development of an REA model?
A) Events that pertain to the entry of data are included in the REA model.
B) The objective is to model basic value-chain activities.
C) REA diagrams model individual transactions and data collections.
D) Information retrieval events are modeled as events in the REA model.
Answer: B
19) Developing an REA diagram for a specific transaction cycle begins by identifying
A) relevant events.
B) agents involved.
C) resources affected.
D) relationship cardinalities.
Answer: A
20) Which of the following is false about cardinalities?

A) Cardinalities describe the nature of the relationship between two entities.
B) No universal standard exists for representing information about cardinalities in REA diagrams.
C) The minimum cardinality can be zero or one.
D) The maximum cardinality can be zero, one, or many.
Answer: D
21) The minimum cardinality of a relationship in an REA diagram can be either

A) 0 or 1.
B) 0 or N.
C) 1 or N.
Answer: A
22) The maximum cardinality of a relationship in an REA diagram can be either

A) zero or one.
B) one or many.
C) zero or many.
Answer: B
23) How many types of relationships are possible between entities?

A) one
B) two
C) three
D) an infinite number
Answer: C
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24) A relationship in which cardinalities have zero minimums and N maximums would most likely be an
A) agent-event relationship.
B) resource-event relationship.
C) event-event relationship.
D) All of the above are equally likely.
Answer: B
25) Concerning REA diagrams, which of the following is false?
A) Each organization will have its own unique REA diagram.
B) An REA diagram for a given organization will change over time.
C) Data modeling and REA diagram development involve complex and repetitive processes.
D) Redrawing an REA diagram several times during development is uncommon.
Answer: D
26) Data modeling is an element of

A) systems analysis.
B) conceptual design.
C) both A and B
Answer: C
27) Which of the following graphical symbols represents a minimum cardinality of zero and a maximum
cardinality of one?
A)
B)
C)
D)
Answer: A
28) Which of the following graphical symbols represents a minimum cardinality of zero and a maximum
cardinality of many?
A)
B)
C)
D)
Answer: C
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29) Which of the following graphical symbols represents a minimum cardinality of one and a maximum
cardinality of one?
A)
B)
C)
D)
Answer: B
30) Which of the following graphical symbols represents a minimum cardinality of one and a maximum
cardinality of many?
A)
B)
C)
D)
Answer: D
31) Which of the following transactions is represented by the diagram below?
A) An automobile salvage business holds weekly auctions at which it sells its entire inventory.
B) A grocery store sells products to consumers.
C) A hobbyist restores antique cars. When a car is finished, she sells it on eBay.
D) A firm sells movies to consumers through an online downloading service.
Answer: B
Answer: A
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Answer: C
Answer: D
A) Cash and carry consumer retail sales

B) Consumer retail sales paid in installments to the seller
C) Business to business sales of nondurable goods
D) Business that allows customers to carry a balance and make installment payments
Answer: A

Answer:B

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Answer: C

Answer: D
A) Vendors send a bill for each inventory item purchased which is payable on receipt.
B) A single purchase of inventory is paid for with multiple payments.
C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept or allow
installment payments.
D) Some inventory purchases are paid for with multiple payments and some payments may apply to
multiple purchases.
Answer: B
multiple purchases.
Answer: C
Page Ref: 505
Objective: Learning Objective 4
Difficulty : Difficult
AACSB: Reflective Thinking
multiple purchases.
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Answer: D
A) Each sale is associated with a single order and there is a time lag between the time an order is taken
and delivery of the product.
B) Each sale can be comprised of multiple orders and each order can be associated with multiple sales or
no sales.
C) Each sale can be comprised of multiple orders and each order can be associated with one or more
multiple sales.
D) Each sale is associated with a single order and there is no time lag between the time an order is taken
Answer: A
Page Ref: 505
no sales.
sales.
Answer: B
no sales.
sales.
Answer: C
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no sales.
sales.
Answer: D
46) A relationship is diagrammed below using the [Min, Max] notation. Which of the diagrams below
represents the same relationship using the "crow's fee" notation?
A)
B)
C)
D)
Answer: D
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47) Cosgrove Art & Antiques sells unique art and antiques exclusively at antique shows. Cosgrove
purchases inventory from individuals and other dealers at garage sales, flea markets, antique malls, and
estate sales. Each time Cosgrove makes a purchase, she records the person's name, address, date,
specific items purchased and price paid, and total amount spent. Later at home, Cosgrove cleans,
researches and prices the inventory items. She assigns an inventory number to each item and records the
"asking" price. Cosgrove buys price tags and display supplies from a company that sells at flea market
and antique shows. All inventory and supplies purchases are paid immediately with cash, or with checks
from a bank account in the business' name, to which sales are also deposited. Several times a year
Cosgrove rents a booth at an antique show. A deposit is always required, with the balance due at the
start of the show. Cosgrove records the deposit and final payment, along with the show organizer's name
and address, in the same worksheet on which purchases of inventory and supplies are recorded.
A well-planned and correctly drawn REA diagram for Cosgrove Art & Antiques, related to purchasing
inventory and supplies, renting booths, and paying for all items, would
A) include eight unique entities.
B) include nine unique entities.
C) include seven unique entities.
D) include ten unique entities.
Answer: A
A) reflect nine 1:N relationships.
B) reflect two M:N relationships.
C) reflect ten 1:N relationships.
D) include two 1:1 relationships.
Answer: A
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A) reflect minimum cardinalities of 1 for the relationship between Vendor and Cash Disbursement
entities.
B) reflect the same number of 0 and 1 minimum cardinalities.
C) reflect more maximum cardinalities of M than of 1.
D) reflect maximum cardinalities of M for the relationship between Inventory and Purchase entities.
Answer: A
inventory and supplies, renting booths, and paying for all items, what entities would reflect economic
duality?
A) Purchases and Cash Disbursements
B) Booth Rental and Cash Disbursements
C) Inventory and Purchases
D) Cash and Cash Disbursements
Answer: A
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Draw an REA diagram for Cosgrove Art & Antiques, related to purchasing inventory and supplies,
renting booths, and paying for all items.
Answer:
Page Ref: 499
52) Describe data modeling.

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Answer: Data modeling is the process of defining a database so that it faithfully represents all aspects of
the organization, including its interaction with the external environment.
53) Describe an REA data model.

Answer: The REA data model is a conceptual modeling tool specifically designed to provide structure
for designing an AIS database. The REA data model identifies what entities should be included in the
AIS database and prescribes how to structure relationships among the entities in the AIS database. REA
stands for resources, events, and agents. Resources are defined as those things that have economic value
to the organization. Events are the various business activities about which management wants to collect
information for planning and control purposes. Agents are the people and organizations that participate
in events and about which information is desired for planning, control, and evaluation purposes.
Page Ref: 496
Difficulty : Moderate
AACSB: Analytic
54) Define cardinality.

Answer: The cardinality of the relationship indicates how many occurrences of the entity on the other
side of the relationship can be linked to a single occurrence of the entity on this side of the relationship.
In relational database terms, cardinality provides information about how many rows in the other table
can be linked to each row in this table.
Page Ref: 502
AACSB: Analytic
55) Describe the three basic rules that apply to the REA model pattern.
Answer: Each event is linked to at least one resource that it affects. Each event is linked to at least one
other event. Each event is linked to at least two participating agents.
Page Ref: 497
Difficulty : Easy
AACSB: Analytic
56) Describe the steps in developing an REA diagram.

Answer: Developing an REA diagram involves three steps. First, identify the basic events of interest
(any activity about which management wants to collect information in order to plan, control, and
evaluate performance). Second, identify the resources affected by and the agents who participate in
those events. Third, use knowledge about the organization's business practices to add relationship
cardinality information to the diagram.
Page Ref: 499
AACSB: Analytic
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57) Explain how an AIS system can be viewed as a set of "give-to-get" exchanges.
Answer: An AIS system can be viewed as a set of "give-to-get" exchanges because such exchanges
reflect the nature of the five transaction cycles: revenue, expenditure, human resources, production, and
financing. In each cycle the organization "gives" some resource in exchange for another resource (the
"get" part of the transaction). The goal is that the "give" part of the exchange is of lesser value than the
"get" portion, thus generating a profit for the organization. The AIS should capture, record, and organize
information relating to any transaction that occurs within a cycle.
Page Ref: 497
AACSB: Analytic
58) Define minimum and maximum cardinalities.

Answer: A minimum cardinality indicates the number of instances of that entity that must be associated
with at least one instance of the other entity. Minimum cardinalities can be 0 or 1. A maximum
cardinality indicates the number of instances of that entity that can be linked to at most one instance of
the other entity. Maximum cardinalities can be 1 or N (many).
Page Ref: 503
AACSB: Analytic
59) Describe the possible relationships between entities, in terms of cardinalities.

Answer: There are three types or relationships possible between entities depending upon maximum
cardinality. These are: A one-to-one relationship exists when the maximum cardinality of each entity is
1. A one-to-many relationship exists when the maximum cardinality on one entity is 1 and maximum
cardinality of the other entity is N. A many-to-many relationship exists when the maximum cardinality
of both entities is N.
Page Ref: 504-505
AACSB: Analytic
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60) Explain specifically what is meant by the following statement, "Accountants can and should
participate in all stages of the database design process."
Answer: Accountants are in a unique position within a business organization. They are intimately
acquainted with the many business transactions that occur in an organization and they are
knowledgeable about the policies and practices of the business itself as well as the environment within
which it operates. The knowledge base and skill sets of the accountant should be put to good use in the
development of database design to the fullest extent possible (although some accountants may not
possess AIS coding and development skill sets). Consider that during the planning stage accountants
provide some of the information used to evaluate the feasibility of the proposed project and they
participate in making the decision itself. Accountants can identify user information needs and develop
logical schema during the requirement analysis and design stages. Accountants can also help test the
accuracy of the new database and application programs during the implementation stage of
development. Accountants can also act as "subject matter experts" since they are knowledgeable users of
the new system. They can also serve as managers of the system once it is up and running.
Page Ref: 494
AACSB: Analytic
61) A dental office employs three dentists and five dental hygienists. One of the dentists is a very recent
dental school graduate and can't yet see patients on her own until she passes boards and obtains a
license. Dentists perform all procedures personally, except for regular cleaning and x-rays, which are
performed exclusively by dental hygienists. Three of the five dental hygienists perform only regular
cleaning and x-rays. The other two hygienists each assist a specific dentist during procedures, as well as
performing regular cleaning and x-rays. One of the hygienists will be assigned to the new dentist when
she begins seeing patients. Hygienists usually 'shadow' other hygienists and dentists for two weeks prior
to seeing patients.
Patients schedule appointments directly with dentists and hygienists, depending on the type of dental
service needed. Patients do not have to choose a dentist until they need service other than routine
cleaning or x-rays. Patients are assigned to a specific dental hygienist when they schedule their first
appointment. The customer master file has 549 records. Diagram the agents described, relationships
between agents, and the cardinality pairs for each relationship.
Answer:
Page Ref: 504
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Accounting Information Systems, 12e (Romney/Steinbart)
Chapter 4 Relational Databases
1) Using a file-oriented approach to data and information, data is maintained in

A) a centralized database.
B) many interconnected files.
C) many separate files.
D) a decentralized database.
Answer: C
2) In a well-structured relational database,

A) every table must be related to at least one other table.
B) every table must be related to all other tables.
C) one table must be related to at least one other table.
D) one table must be related to all other tables.
Answer: A
3) File-oriented approaches create problems for organizations because of

A) multiple transaction files.
B) a lack of sophisticated file maintenance software.
C) multiple users.
D) multiple master files.
Answer: D
4) Which statement is true regarding file systems?

A) Transaction files are similar to ledgers in a manual AIS.
B) Multiple master files create problems with data consistency.
C) Transaction files are permanent.
D) Individual records are never deleted in a master file.
Answer: B
5) The ________ acts as an interface between the database and the various application programs.
A) data warehouse
B) database administrator
C) database management system
D) database system
Answer: C
6) The combination of the database, the DBMS, and the application programs that access the database
through the DBMS is referred to as the
A) data warehouse.
B) database administrator.
C) database system.
D) database manager.
Answer: C
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7) The person responsible for the database is the
A) data coordinator.
B) database administrator.
C) database manager.
D) database master.
Answer: B
8) All of the following are benefits of the database approach except:

A) Data integration and sharing
B) Decentralized management of data
C) Minimal data redundancy
D) Cross-functional analysis and reporting
Answer: B
9) The physical view of a database system refers to
A) how a user or programmer conceptually organizes and understands the data.
B) how the DBMS accesses data for a certain application program.
C) how and where the data are physically arranged and stored.
D) how master files store data values used by more than one application program.
Answer: C
10) The ________ handles the link between the way data are physically stored and each user's logical
view of that data.
A) data warehouse
B) data dictionary
C) database management software (DBMS)
D) schema
Answer: C
11) The logical structure of a database is described by the

A) data dictionary.
B) schema.
C) database management system.
D) internal level.
Answer: B
12) The schema that provides an organization-wide view of the entire database is known as the
A) external-level schema.
B) internal-level schema.
C) conceptual-level schema.
D) logical view of the database.
Answer: C
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13) A set of individual user views of the database is called the
A) conceptual-level schema.
B) internal-level schema.
C) external-level schema.
D) meta-schema.
Answer: C
14) A low-level view of the database that describes how the data are actually stored and accessed is the
A) conceptual-level schema.
B) subschema.
C) internal-level schema.
D) external-level schema.
Answer: C
15) Record layouts, definitions, addresses, and indexes will be stored at the ________ level schema.
A) external
B) conceptual
C) internal
D) meta
Answer: C
16) The ________ contains information about the structure of the database.
A) data definition language
B) data dictionary
C) data warehouse
D) database management system
Answer: B
17) Which of the following would not be found in a data dictionary entry for a data item?
A) records containing a specific data item
B) physical location of the data
C) source of the data item
D) field type
Answer: B
18) The data dictionary usually is maintained

A) automatically by the DBMS.
B) by the database administrator.
C) by the database programmers.
D) by top management.
Answer: A
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19) Reports produced using the data dictionary could include all of the following except a list of
A) programs where a data item is used.
B) synonyms for the data items in a particular file.
C) outputs where a data element is used.
D) the schemas included in a database.
Answer: D
20) Which statement below concerning the database management system (DBMS) is false?
A) The DBMS automatically creates application software for users, based on data dictionary parameters.
B) The DBMS automatically maintains the data dictionary.
C) Users' requests for information are transmitted to the DBMS through application software.
D) The DBMS uses special languages to perform specific functions.
Answer: A
21) Which would not generally be considered a data dictionary output report?
A) A list of cash balances in the organization's bank accounts
B) A list of all programs in which a data element is used
C) A list of all synonyms for the data elements in a particular file
D) A list of all data elements used by a particular user
Answer: A
22) Creating an empty table in a relational database requires use of the ________, and populating that
table requires the use of ________.
A) DDL; DML
B) DQL; SQL
C) DDL; DQL
D) DML; DDA
Answer: A
23) When the human resources manager wants to gather data about vacation and personal day usage by
employees and by departments, the manager would use which language?
A) Data Query Language
B) Data Manipulation Language
C) Data Report Language
D) Data Definition Language
Answer: A
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24) If a national sales tax were implemented, which language would be used to add a new field in the
sales table to track the sales tax due?
A) Data Definition Language
B) Data Manipulation Language
C) Data Query Language
D) Data Update Language
Answer: A
25) The feature in many database systems that simplifies the creation of reports by allowing users to
specify the data elements desired and the format of the output. is named the
A) report writer.
B) report generator.
C) report creator.
D) report printer.
Answer: A
26) The abstract representation of the contents of a database is called the

A) logical data model.
B) data dictionary.
C) physical view.
D) schema.
Answer: A
27) The problem of changes (or updates) to data values in a database being incorrectly recorded is
known as
A) an update anomaly.
B) an insert anomaly.
C) a delete anomaly.
D) a memory anomaly.
Answer: A
28) The potential inconsistency that could occur when there are multiple occurrences of a specific data
item in a database is called the
A) update anomaly.
B) insert anomaly.
C) inconsistency anomaly.
D) delete anomaly.
Answer: A
29) Inability to add new data to a database without violating the basic integrity of the database is
referred to as the
A) update anomaly.
B) insert anomaly.
C) integrity anomaly.
D) delete anomaly.
Answer: B
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30) A relational database in which customer data is not maintained independently of sales invoice data
will most likely result in
A) an update anomaly.
B) an insert anomaly.
C) a delete anomaly.
D) an integrity anomaly.
Answer: B
31) The problem of losing desired information from a database when an unwanted record is purged from
the database is referred to as the ________ anomaly.
A) purge
B) erase
C) delete
D) integrity
Answer: C
32) The delete anomaly

A) may result in unintentional loss of important data.
B) is usually easily detected by users.
C) restricts the addition of new records.
D) prevents users from deleting outdated data from records or tables.
Answer: A
33) The update anomaly in file-based systems or unnormalized database tables
A) occurs because of data redundancy.
B) restricts addition of new fields or attributes.
C) results in records that cannot be updated.
D) is usually easily detected by users.
Answer: A
34) In a relational database, requiring that every record in a table have a unique identifier is called the
A) entity integrity rule.
B) referential integrity rule.
C) unique primary key rule.
D) foreign key rule.
Answer: A
35) The database requirement that foreign keys must be null or have a value corresponding to the value
of a primary key in another table is formally called the
C) rule of keys.
D) foreign key rule.
Answer: B
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36) In a well-structured database, the constraint that ensures the consistency of the data is known as the
C) logical view.
D) consistency integrity rule.
Answer: B
37) Which statement below is false regarding the basic requirements of the relational data model?
A) Every column in a row must be single-valued.
B) All non-key attributes in a table should describe a characteristic about the object identified by the
primary key.
C) Foreign keys, if not null, must have values that correspond to the value of a primary key in another
table.
D) Primary keys can be null.
Answer: D
38) Identify the aspect of a well-structured database that is incorrect.

A) Data is consistent.
B) Redundancy is minimized and controlled.
C) All data is stored in one table or relation.
D) The primary key of any row in a relation cannot be null.
Answer: C
39) In the database design approach known as normalization, the first assumption made about data is
A) there is no redundancy in the data.
B) the delete anomaly will not apply since all customer records will be maintained indefinitely.
C) everything is initially stored in one large table.
D) the data will not be maintained in 3NF tables.
Answer: C
40) The database design method in which a designer uses knowledge about business processes to create
a diagram of the elements to be included in the database is called
A) normalization.
B) decentralization.
C) geometric data modeling.
D) semantic data modeling.
Answer: D
41) Which of the statements below is incorrect?

A) Semantic data modeling facilitates the efficient design of databases.
B) Semantic data modeling facilitates communicating with the intended users of the system.
C) Semantic data modeling allows a database designer to use knowledge about business processes to
design the database.
D) Semantic data modeling follows the rules of normalization in the design of a database.
Answer: D
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42) What is one potential drawback in the design and implementation of database systems for
accounting?
A) Double-entry accounting relies on redundancy as part of the accounting process but well-designed
database systems reduce and attempt to eliminate redundancy.
B) Relational DBMS query languages will allow financial reports to be prepared to cover whatever time
periods managers want to examine.
C) Relational DBMS provide the capability of integrating financial and operational data.
D) Relational DBMS can accommodate multiple views of the same underlying data; therefore, tables
storing information about assets can include data about both historical and replacement costs.
Answer: A
43) Which is probably the most immediate and significant effect of database technology on accounting?
A) replacement of the double entry-system
B) change in the nature of financial reporting
C) elimination of traditional records such as journals and ledgers
D) quicker access to and greater use of accounting information in decision-making
Answer: D
44) In a well-designed and normalized database, which of the following attributes would be a foreign
key in a cash receipts table?
A) Customer number
B) Cash receipt date
C) Remittance advice number
D) Customer check number
Answer: A
45) Dana Halsey is chair of the Purebred Marmoset Society, which maintains a database of registered
purebred marmosets and their breeding history. One table will store the name, birth date, and other
characteristics of all of the marmosets that have been registered. Each marmoset is uniquely identified
by a registration number. A second table will contain data that link each marmoset to its male and
female parents by means of their registration numbers. The primary key in the first table is:
A) name
B) birth date
C) a foreign key in the second table.
D) the primary key in the second table.
Answer: C
female parents by means of their registration numbers. The primary key in the second table is:
A) name
B) birth date
C) a combination of primary keys in the first table
D) the same as the primary key in the first table
Answer: C
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female parents by means of their registration numbers. The entities described by the second table are:
A) marmosets
B) parental relationships
C) registration numbers
D) names
Answer: B
female parents by means of their registration numbers. The entities described by the first table are:
A) marmosets
B) parental relationships
C) registration numbers
D) names
Answer: A
female parents by means of their registration numbers. The primary key in the first table is:
A) name
B) registration number
C) date of birth
D) relationship number
Answer: B
female parents by means of their registration numbers. The primary key in the second table is:
A) name
B) registration number
C) date of birth
D) relationship number
Answer: D
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51) Scuz Bootes has been doing custom choppers, piercings, and tattoos for over thirty years. His home
and place of business is a garage in the harbor district of Seattle, Washington. He has meticulous records
of every job he has ever done, carefully handwritten with the customer name and address, a description
of the job, and an attached picture of the bike or body part before and after customization. His unique
style has recently attracted the attention of national media after several celebrities sought him out and
showcased his work. Business is booming. Consequently, Scuz has hired you to construct an accounting
information system, beginning with the historical records. As you read through the records, you notice
that some customer last names have different first names in different records. For example, R.
Framington Farnsworth (custom chopper), Bob Farnsworth (tattoo), and Snake Farnsworth (tattoos and
piercings) all seem to be the same person. This is an example of what type of problem in the existing
records?
A) Entity integrity
B) Referential integrity
C) Update anomaly
D) Insert anomaly
Answer: C
that some describe multiple services. For example, Sheila Yasgur (notation: won lottery) got a custom
chopper, multiple tattoos, and piercings in undisclosed locations (no pictures.) You realize that, in these
cases, a single written record will have to be translated into multiple sales records. This is an example of
what type of problem in the existing records?
A) Entity integrity
B) Referential integrity
C) Update anomaly
D) Insert anomaly
Answer: D
26
that some customer last names have different first names in different records. For example, R.
Framington Farnsworth (custom chopper), Bob Farnsworth (tattoo), and Snake Farnsworth (tattoos and
piercings) all seem to be the same person. You explain to Scuz that every customer must be identified by
a unique customer number in the AIS. You are referring to the
C) update anomaly.
D) insert anomaly.
Answer: A
information system, beginning with the historical records. You begin development of the relational
database that will form the core of the AIS by envisioning the record stored in a single table with a
column that represents each attribute. You then begin to break this table down into smaller tables. This
process is called
A) integration.
B) optimization.
C) minimization.
D) normalization.
Answer: D
55) Chelsana Washington is a medical equipment sales representative. Her company has provided her
with a laptop computer that uses wireless connectivity to access the accounting information system from
virtually anywhere in the country. She, and the other sales reps, have access to view customer and
product information. They have access that allows them to enter and cancel customer orders. The
permissions for Chelsana define a(an) ________ in the company's database management system.
A) conceptual-level schema
B) subschema
C) data dictionary
D) physical view
Answer: B
27
56) Chelsana Washington is a medical equipment sales representative. Her company has provided her
with a laptop computer that uses wireless connectivity to access the accounting information system from
virtually anywhere in the country. She, and the other sales reps, have access to view customer and
product information. They have access that allows them to enter and cancel customer orders. The
permissions for the sales reps define a(an) ________ in the company's database management system.
A) conceptual-level schema
B) external-level schema
C) data dictionary
D) physical view
Answer: B
57) Shandra Bundawi is a new graduate who has been hired by an old-line, family-owned furniture
manufacturing company in the northeast. She has been asked to analyze the company's accounting
information system and to recommend cost-effective improvements. After noting that the production
and sales departments use database systems that are entirely separated, she recommends that they be
combined. Implementation of her recommendation would benefit the company by contributing to data
A) independence.
B) integration.
C) redundancy.
D) qualifications.
Answer: B
of every job he has ever done. These have been entered into a computerized accounting information
system that his accountant refers to as a "data warehouse." Scuz is considering an expansion of his
business into scarification, and has asked his accountant to identify past customers who might be likely
candidates for this service. Scuz wants his accountant to engage in
A) customer auditing.
B) customer resource management.
C) data mining.
D) enterprise resource planning.
Answer: C
59) Heidi Holloway is a headhunter with Career Funnel in Boca Raton, Florida. Heidi is proud of the
company's motto: We funnel workers into jobs. The foundation of CF's success is its accounting
information system. When a client is placed with an employer, a record is created that identifies the
employment relationship. CF follows up on placements by surveying both employers and clients about
the employment experience and then entering the results into the AIS. Clients are uniquely identified by
social security number. In records that contain client survey data,the social security number number is
likely to be
A) the primary key.
B) a foreign key.
C) combined with other data fields to form a primary key.
D) null.
Answer: B
28
60) The data on this sales invoice would be generated from how many well-structured tables in a well-
designed relational database?
A) 6
B) 5
C) 4
D) 7
Answer: A
Page Ref: 96
29
61) Which of the following would not be one of the well-structured tables in a well-designed relational
database used to generate this sales invoice?
A) Customer Order
B) Customer
C) Sales
D) Sales Order
Answer: A
Page Ref: 96
30
62) Which of the following would not be true about the well-structured tables in a well-designed
relational database used to generate this sales invoice?
A) Quantity would be generated from the Sales table.

B) 34567 would be a primary key in the Sales table.
C) Unit Price would be generated from the Inventory table.
D) Hardware City is an example of a non-key data value in the Customer table.
Answer: A
Page Ref: 96
31
63) Which one of the following results corresponds to the query below?
A)
B)
C)
D)
32
Answer: C
Page Ref: 97-104
Difficulty : Easy
AACSB: Analytic
A)
B)
C)
D)
Answer: D
Page Ref: 97-104
33
A)
B)
C)
D)
Answer: B
Page Ref: 97-104
34
66) Describe a major advantage of database systems over file-oriented transaction processing systems.
Answer: Database systems separate logical and physical views. This separation is referred to as
program-data independence. Such separation facilitates developing new applications because
programmers can concentrate on coding the application logic (what the program will do) and do not
need to focus on how and where the various data items are stored or accessed. In the file-oriented
transaction systems, programmers need to know physical location and layout of records which adds
another layer of complexity to programming.
Page Ref: 88-89
Difficulty : Easy
67) What is the difference in logical view and physical view?

Answer: The logical view is how the user or programmer conceptually organizes and understands the
data, such as data organized in a table. The physical view, on the other hand, refers to how and where
the data are physically arranged and stored in the computer system.
Page Ref: 90
Difficulty : Easy
AACSB: Analytic
68) Describe the different schemas involved in a database structure. What is the role of accountants in
development of schemas?
Answer: A schema describes the logical structure of a database. There are three levels of schemas. First,
the conceptual-level schema is an organization-wide view of the entire database listing all data elements
and relationships between them. Second, an external-level schema is a set of individual user views of
portions of the database, each of which is referred to as a subschema. Finally, an internal-level schema
provides a low-level view of the database includes descriptions about pointers, indexes, record lengths,
etc. Accountants are primarily involved in the development of conceptual- and external-level schemas;
however, database knowledgeable accountants may participate in developing an internal -level schema.
Page Ref: 90
69) Describe a data dictionary.

Answer: A data dictionary is a means by which information about the structure of a database is
maintained. For each data element stored in the database, there is a corresponding record in the data
dictionary that describes it. The DBMS usually maintains the data dictionary. Inputs to the dictionary
include various new data, changed data, and deleted data. Output from the data dictionary may include a
variety of reports useful to programmers, database designers, and other users of the information system.
Accountants have a very good understanding of the data elements that exist in a business organization,
so when an organization is developing a database, accountants should be allowed to participate in the
development of the data dictionary.
Page Ref: 92
Difficulty : Easy
AACSB: Analytic
70) Explain the types of attributes that tables possess in a relational database.
35
Answer: Primary key  the attribute, or combination of attributes, that uniquely identify a specific row
in a table. Foreign key  an attribute appearing in one table that is a primary key in another table.
Nonkey attributes found in tables  For example, an inventory table may contain information about the
description, quantity on hand, and list price of each item a company sells.
Page Ref: 92
Difficulty : Easy
AACSB: Analytic
71) Explain the two advantages semantic data modeling has over normalization when designing a
relational database.
Answer: Semantic data modeling takes advantage of a system designer's knowledge about the business
policies and practices of an organization. This is of great benefit in the design of transaction processing
databases. Also, since the database model is created around the policies and practices of an organization,
communications with the future database users is facilitated. The result is that the system will more
closely meet the needs of the intended users.
Page Ref: 97
AACSB: Analytic
72) Explain the difference between file-oriented transaction processing systems and relational database
systems. Discuss the advantages and disadvantages of each system.
Answer: In file-oriented approaches, different users (or departments, units, etc.) maintain their own data
and use different application programs. This results in a significant increase in number of master files
stored by an organization. The various disadvantages of file-oriented organization include data
redundancy, data inconsistencies, lack of data integration, a large number of data files, substantial
program-data dependence, lack of compatibility, and lack of data sharing. The database approach views
data as an organizational resource that should be used and managed for the entire organization. The
program that manages and controls the data and the interfaces between data and application programs is
called the database management system (DBMS). The various advantages of database approach include
the following: minimal data redundancy, fewer data inconsistencies, data integration, data sharing,
reporting flexibility, central management of data, cross-functional analysis, and data independence.
Page Ref: 87-88
36
73) Discuss redundancy as it applies to database design.
Answer: Redundancy has been called an enemy of relational databases. There are several problems that
may occur when redundant data is stored in a database. First, the database becomes larger than it needs
to be, since duplicate facts are being stored within it. Second, a situation may occur where only one
instance of redundant data is updated or purged. The result is that the accuracy and integrity of the
database suffers, since users may be relying on such inaccurate or incorrect redundant data. Redundancy
can also make file maintenance unnecessarily time consuming and error-prone when human intervention
is required. The problems discussed above have been identified as anomalies of a relational database.
There are three specific anomalies connected with redundancy: the update anomaly, the insert anomaly,
and the delete anomaly. A well-designed relational database will attempt to reduce or eliminate the
number of instances of redundant data. The best way to achieve such a goal is proper design of the
database for the needs of a specific organization.
Page Ref: 94
74) Discuss the ways in which a well-designed DBMS will facilitate the three basic functions of
creating, changing, and querying data.
Answer: A DBMS will use data definition, data manipulation, and data query languages in order to
perform the three basic, essential data functions. Data definition is achieved using DDL (data definition
language); data manipulation is achieved using DML (data manipulation language) which includes
operations such as updating, inserting, and deleting portions of the database. DQL (data query language)
is used to retrieve, sort, order, and present subsets of data in response to user queries. A DBMS will
probably also include a report writer, which is a language that simplifies report creation.
Page Ref: 92
AACSB: Analytic
75) List the four DBMS "languages" and describe who uses each and for what purpose.
Answer: DDL is the data definition language used by the DBA (database administrator) to create,
initialize, describe logical views, and specify security limits. The DML is the data manipulation used by
application programmers who embed these action commands into applications to access data in the
database. The DQL is the data query language used by IT professionals and users to interrogate the
database by retrieving and presenting data in novel ways often on an ad hoc basis. The report writer is a
language used by IT professionals and users that simplifies report creation so reports can be created
according to user-specified format.
Page Ref: 92
AACSB: Analytic
37
76) Describe the information that is contained in the data dictionary.
Answer: The data dictionary contains information about the structure of the database. For each data
element stored in the database, the data dictionary contains all the descriptive information about it, such
as its name, description, where it is recorded, its source, field length, type of field, programs it is used in,
outputs that contain it, and authorized users.
Page Ref: 92
Difficulty : Easy
AACSB: Analytic
77) Explain the relational database data model.

Answer: A data model is an abstract representation of the contents of a database. The majority of new
DMBS use what is called the relational data model, developed by Dr. E. F. Codd in 1970. Using this
model, everything in the database is stored in the form of tables, known as relations. Keep in mind that
this is the conceptual- and external-level schemas (which describes the logical structure of a database),
not the actual physical structure of the database itself. In the concept of relations, both rows and columns
comprise the database tables. Each row in a relation (table) is called a tuple. Tuples contain data about a
specific occurrence of the type of entity represented by that table. For example, in a sales table, each
tuple may contain all of the information about a specific customer. Each column in a relation contains
information about one specific attribute of that entity. Using the sales example again, the columns in
such a table may represent specific characteristics about each sales transaction.
Page Ref: 92
AACSB: Analytic
78) What are the basic requirements when logically designing a relational database model?
Answer: Every row in every table must have a unique key known as a primary key. Tables may also
have a key known as a foreign key; such a key will have a value corresponding to the primary key in
another table. Each column in a table must be single-valued (the same data type) and describe an
attribute of the entity identified by the primary key; neither column nor row order is significant in the
relational model. Keep in mind that the relational model is a logical model, and the physical model may
have a different structure to it to facilitate the storage and access to data.
Page Ref: 96
AACSB: Analytic
38
79) Describe what you think will be the main impact of database technology in your career.
Answer: Answers to this question could cover a wide range. Most likely the following items will be
discussed or mentioned:
 the probable demise of the double-entry system as the need for such redundancy is much less in a
database system.
 financial reporting may become more of accessing a database of corporate data in the format desired
by the user than relying on financial reports prepared by accountants.
 accountants will no longer need to be the filter for accounting data as users will be able to do this
themselves, thus the accountants may become more decision makers and managers.
 the whole notion of internal controls will become more important in the future if the accountants' role
changes in relation to financial reporting.
Page Ref: 104-105
80) Chagall Curtain Company is changing from a file-oriented system to a relational database system.
Design at least three tables that would be needed to capture data for a sales transaction. Each table
should include a primary key, three non-key attributes, and foreign keys as necessary. Make up data
values for two records within each table.
Answer: Customer table; ID (primary key), name, street address, city, state, zip code, phone number,
credit limit, salesperson ID (foreign key)
Salesperson table; ID (primary key), name, street address, city, state, zip code, phone number, hire
date, commission rate, base salary
Sales table; sales invoice number (primary key), date, amount, sales tax, shipping charge, shipping
method, customer ID (foreign key), salesperson ID (foreign key)
Inventory table; item ID (primary key), description, size, color, warehouse location, list price, quantity
on hand
Sales-Inventory table; sales invoice number and item ID (concatenated primary key), quantity sold,
sales price, extended amount
Students should also make up data values for two separate records for each table.
Page Ref: 94-96
39

Chapter 17 The REA Data Model: Accounting Information Systems, 12e (Romney/Steinbart)

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Chapter 17 The REA Data Model: Accounting Information Systems, 12e (Romney/Steinbart)

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Accounting Information Systems, 12e (Romney/Steinbart)

Chapter 17 The REA Data Model

10) The REA data model

16) The "give" event represents an activity which

17) The "get" event represents an activity which

20) Which of the following is false about cardinalities?

21) The minimum cardinality of a relationship in an REA diagram can be either

22) The maximum cardinality of a relationship in an REA diagram can be either

23) How many types of relationships are possible between entities?

26) Data modeling is an element of

31) Which of the following transactions is represented by the diagram below?

34) Which of the following transactions is represented by the diagram below?

35) Which of the following transactions is represented by the diagram below?

A) Cash and carry consumer retail sales

36) Which of the following transactions is represented by the diagram below?

A) Cash and carry consumer retail sales

37) Which of the following transactions is represented by the diagram below?

A) Cash and carry consumer retail sales

A) Cash and carry consumer retail sales

39) Which of the following transactions is represented by the diagram below?

40) Which of the following transactions is represented by the diagram below?

41) Which of the following transactions is represented by the diagram below?

42) Which of the following transactions is represented by the diagram below?

43) Which of the following transactions is represented by the diagram below?

44) Which of the following transactions is represented by the diagram below?

52) Describe data modeling.

53) Describe an REA data model.

54) Define cardinality.

56) Describe the steps in developing an REA diagram.

58) Define minimum and maximum cardinalities.

59) Describe the possible relationships between entities, in terms of cardinalities.

1) Using a file-oriented approach to data and information, data is maintained in

2) In a well-structured relational database,

3) File-oriented approaches create problems for organizations because of

4) Which statement is true regarding file systems?

8) All of the following are benefits of the database approach except:

11) The logical structure of a database is described by the

18) The data dictionary usually is maintained

26) The abstract representation of the contents of a database is called the

32) The delete anomaly

38) Identify the aspect of a well-structured database that is incorrect.

41) Which of the statements below is incorrect?

A) Quantity would be generated from the Sales table.

67) What is the difference in logical view and physical view?

69) Describe a data dictionary.

77) Explain the relational database data model.

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