APPLY: IAN’S PLACE CASE STUDY
Read Case Study 7-20 Ian’s Place (The REA Model and E-R Diagrams) on p. 238 in Core Concepts of Accounting Information Systems.
Write a 45- to 175-word response to question 1.
Complete the items identified for questions 2 and 3.
7-20. Ian’s Place (The REA Model and E-R Diagrams)
Ian’s place sells pet supplies to dog and cat owners. To sell its products, the marketing department requires sales personnel to call on the pet store retailers within their assigned geographic territories. Salespeople have an application on their mobile phones that allows them to record sales orders and send these sales orders directly to the company network for updating the company’s sales order file.
Each day, warehouse personnel review the current sales orders in its file, and where possible, pick the goods and ready them for shipment. (Ian’s Place ships goods via common carrier, and shipping terms are generally FOB from the shipping point.) When the shipping department completes a shipment, it also notifies the billing department, which then prepares an invoice for the customer. Payment terms vary by customer, but most are “net 30.” When the billing department receives a payment, the billing clerk credits the customer’s account and records the cash received.
Identify the resources, events, and agents involved in the revenue process at Ian’s Place.
Develop an E-R diagram for this process.
Design the tables for this revenue process. Note that you will need tables for each resource, event, and agent, as well as tables for each many-to-many relationship.