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UNIT 5 INDIVIDUAL PROJECT REA and ER Diagrams American InterContinental University Yolanda Jensen May 20, 2018
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UNIT 5 INDIVIDUAL PROJECT REA and ER Diagrams This essay will describe a REA and ER diagram. This paper will discuss the differences and similarities between the two diagrams. In this essay we will discuss the effects the diagrams have on financial statements, and what if any implications may arise by using one diagram instead of the other. REA is a business model concept that contains resources, agents, and events. It is stated that is closer to the business reality than any other (design, 2018). The REA model is used to design accounting information systems that can be utilized by all users of a company (Hruby, 2018). Resources are objects of economic exchanges with trading partners and anything of economic value to a company. Events is divided into two groups which are economic events and support events. Anything that increases or decreases resources are considered economic events. Support events include planning, control, and management activities which are related to economic events but do not effect change in resources. Agents are individuals outside and inside an organization who participate in the economic event (design, 2018). Economic duality is a key feature of the REA model, there is a give event and receive event of an economic exchange.
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  • Spring '13
  • Krausman
  • Accounting, Entity-relationship model, Rea, Data structure diagram, ER Diagrams

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