What Does Rea Stand For Accounting?

Resources, events, agents (REA) is a model of how an accounting system can be re-engineered for the computer age. REA was originally proposed in 1982 by William E. McCarthy as a generalized accounting model, and contained the concepts of resources, events and agents (McCarthy 1982).

What does the REA stand for?

President Roosevelt created the REA on May 11, 1935 with Executive Order No. 7037, under powers granted by the Emergency Relief Appropriation Act of 1935 [1]. The goal of the REA was to bring electricity to America’s rural areas.

What does Rea stand for in database?
REA is an acronym for resources, events, and agents. The REA model views accounting data collection as a system to collect data about the resources, events, and agents within business processes. Business processes involve events in which resources are exchanged by agents. An example of such an event is a sale.

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What is an REA data model?

The REA data model was developed specifically for use in designing accounting information systems. It focuses on business semantics underlying an organization’s value chain activities. It provides guidance for identifying the entities to be included in a database and structuring the relationships among the entities.

What do the initials Rea stand for what does REA modeling allow us to determine in database design?

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.

What is a rea diagram?

An REA diagram is an E-R diagram that is designed using the REA data model to identity the three basic kinds of entities relevant to transaction processing systems: the resources controlled by the organizations, the events (business activities) that managers want to plan, control, and evaluate, and the agents who … You may also read,

What are three basic types of entities in Rea?

– The REA data model prescribes a basic pattern for how the three types of entities (resources, events, and agents) should relate to one another. Check the answer of

What is the REA core pattern?

REA core pattern is a conceptual structure of relationships between the resources, events, and agents that constitute the transactional/transformational core of an economic exchange/conversion process.

How do you draw a rea model?

  1. STEP ONE: Identify the events about which management wants to collect information.
  2. STEP TWO: Identify the resources affected by the events and the agents who participated.
  3. STEP THREE: Determine the cardinalities of the relationships.
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What is the minimum number of agents that must participate in each REA event?

The resource and associated event entities are presented in Figure 10-6. Step 3. Identify the Agent Entities Each economic event entity in an REA diagram is associated with at least two agent entities. One of these is an internal agent and the other is an external agent.

Why would a company adopt the REA approach to database design?

What is the REA model and its developmental history? REA model was designed to be used in data sharing in generalized accounting with a structure representing economic resources, economic events, and economic agents.

What is the difference between an entity relationship ER diagram and an REA diagram?

ER diagram contains only one class of entities and the proximity to another entities are determined by the cardinality and also by what is visually pleasing to make diagrams readable. But REA contains 3 classes of entities, Resource, Agents and Events are organized into group or constellations by class in the diagram.

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

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.

What are the minimum number and type of event entities that an REA diagram must include?

At a minimum, every REA model must include the two events that represent the basic give-to-get” economic exchange performed in that transaction cycle. The give event reduces one of the organization’s resources. The get event increases a resource.

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Why is depreciation not represented as an event REA data model?

Depreciation is not modeled as an event in the REA diagram because it is an accounting concept that arbitrarily allocates the cost of an acquired resource to different fiscal periods.