Question

Describe 3 differences and 3 similarities between REA diagram and ER diagram. What is an explanation of what each diagram stands for and why, the effect of both diagrams on company's financial statement and the implications of using one diagram over the other and vice versa. Please do not use word for word from your resources! THANKS!!

Answer 1

REA ( Resowice, event, sagmds) REA d'Amw vacumutation technique and a wisut Voom ER Diagram. ml vorsust intity Resowictevents and agents. ER (Entity Relationship ER moiel shows the relationship between two entity. it consist of entity, Relationship, Altnisite I entities are denoted by Rectangle Box → Relationship are refusenter by diamond Bon. denoted by rattributes are ouls. 3 Dillouines between REA and ER Diagram. REA ER Visual REA diagram vanist ferents of three type of ER diagram consist of Toney one type intity. ahon

entities namely, intitus is detunnine Resturees, events, on the basis o vand vagents. I cardinality vassigned to Relationship between those intity these entities is defined on the Basis of economic the action Occuring en tuomess. • REA diagram does Tuy organizing therm from top to bottom: ER diagram do not clearly represent the sequence of events. "ER diagram I contain only one iclan of entities. REA contam 3 cames of entities.

Similaritis Between ER diagram & REA diagram They Both vorsume that information can be describe in terms of entities. That have aun rates are some how identified and Somehow connected ER Model au there to describe conceptual Models and relational Model are for there for describing wogical Model. → the asociation Between the Relation are entities. Effects of REA & ER Diagram 'Financial statement on Here Both the diagram are not supposed to be used if the company is using vaccrual Basis raccounting system. These systems rolo not vacknowledge account receivable and account payable . which are the item of racconial basis method. Basically there di agram are meant for cash Basis raccontanting system,

the inflow and here, Both the models shows outflow of cash.