Stark ’s Bag Inc. is operated by Tony Stark, the founder and chairman. He has considered to develop AIS with database approach for the firm’s expenditure cycle. Since he doesn’t have sufficient knowledge about AIS, she has contacted you, the accounting manager to design and implement the system (i.e., bag purchasing system). You have analyzed the firm’s expenditure cycle and the description is as follows:

Whenever bags are needed, a purchasing clerk makes a purchase order. The purchase order needs purchase order number, order date, item number, quantity ordered, order price, and others. To accommodate all of bag needs, the purchasing clerk may need to prepare several purchase orders, as Stark ’s Bag Inc. orders bags from several vendors. Also, a purchase order can be made for several types of bags from a single vendor.

When the order is received, a warehouse department clerk inspects the quality of bags and verifies the quantity of bags. The necessary information regarding the order received including receipt number, receipt date, quantity received, item condition, and others. Each item on a bag receipt may be from a different purchase order. Different items on a single purchase order may be received at different times using different receipts. It is possible that the order is cancelled by a vendor or Stark’s.

The accounts payable clerk makes payments as an invoice is delivered to the accounts payable clerk from the vendor. Each check may pay for several receipts. However, a single receipt will always be paid for using the same check. The necessary information regarding making payments includes payment number, payment date, payment amount, and others. Stark ’s Bag Inc. has several bank accounts. Only one of bank accounts is used to make payment to vendors.

Required:

1. Prepare an REA diagram describing Stark ’s Bag’s database. You may repeat a box for an individual entity if necessary, to make your drawing neat. (30points)

Hints:

(1) Consider if there is an “economic commitment” event (e.g., take order for a revenue cycle).

(2) Consider typical multiplicities.

Answer rating: 100% (QA)

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