Question

Inventory Order Inventory Employee H Vendor Receive Inventory H HI Employee Cash th Disburse Cash H Vendor

1. Explain the diagram (REA diagram of the Computer Warehouse’s Expenditure Cycle) by including the following:

1. Identify relevant events
2. Identify resources and agents
3. Determine cardinalities of relationships

Answer 1

Answer to question (a) ::

The REA daigram herein above represents the procedure of procurement of the goods from vendor. It comprises of three layers, first the inventory is being ordered to the vendor then the Goods are being received at thw workplace and lastly on verification and terms & conditions agreed thereto the payment is being disbursed to the vendor.

Answer to question (b) ::

Resource in the above diagram are Inventory and cash. As the Term suggest,these two things are being the source of the transaction. In other words, the factors upon which the Agents would conduct an event.

Events in the above diagram are, ordering of the inventory, receiveing of the inventory, Disbursement of payments. As the name suggest the occurancee of any dealings would comprises as an event.

Agents in the above diagram are, Employee and Vendors. i.e, the executors of the dealings are terms as agents whose role defines the events and resource respectively.

Answer to question (C) ::

For Procurement of the inventory the emloyee shall check stock level of the inventory desirious to purchase. Then the quotation aand specifications shall be rendered through vendors for the same. After assessment order shall be palced to the vendors. On receveing of the inventory the stock details shall be recorded thereto. Further the employee shall release the payment for the inventory sold thereto and vice verse vendor shall collect the payment.

REA model is the process of teaching accounting information system. There are seperate REA diagram for eachprocess of the enterprise.