The purpose of this project is to extend the principles learned in the Excel project to a relational database application.



Global Bike, Inc. ERP for Sales / Collection

Using Access Database Program

Purpose of the project

The purpose of this project is to extend the principles learned in the Excel project to a relational database application. This project creates an enterprise resource management (ERP) system sub-component, that of the sales to collection business process.  This project will result in the development of a set of tables and forms that model in simplicity, the very complex application that comprises the SAP enterprise resource management set of applications.

Desired learning outcomes

Once you have completed this project you will be able to:

1.                   describe transactions in terms of the resources, events, agents (REA) model;

2.                   model a business transaction in a relational database application;

3.                   create forms that allow the entry and editing of business information;

Review of the REA model

The “Resources, Events, Agents,” (REA) model is used extensively in the design and application of accounting information systems and enterprise resource management systems. 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)[i].

The REA model replaces several accounting objects that are not necessary in the computer age. Many accounting students initially find this replacement troubling, as the most basic accounting concepts, those of debits, credits, and ledger accounts, are no longer used. In their place, are computer-generated structures of forms, queries, and reports.

In an accounting system based on the REA model, the computer is used as a virtual representation of the business. This is accomplished by creating computer objects that represent real-world-business-objects. By definition, the REA model is an “ontology[ii]” in that it comprises a specification of a conceptualization, defined as three inter-dependent objects:

1.                   goods, services or money, i.e., resources

2.                   business transactions or agreements that affect resources, i.e., events

3.                   people or other human agencies (other companies, etc.), i.e., agents

Whereas conventional accounting terms such as asset or liability are defined in terms of concepts, the REA objects are defined as real-world objects. For example, the common accounting asset, goodwill, is not a resource in the terms of the REA ontology.

Using REA, each business process in a company is separately modeled. A business process is generally defined as a functional department, or a business function as defined in Porter’s “value chain.” Some examples of business processes are sales, purchases, manufacturing, human resources, and financing.

Related Questions in accounting category

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