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USING REA TO MODEL BUSINESS PROCESSES 13

Purchase

Cash
Disbursement

FIGURE 1-17 Purchase-Cash Disbursement Relationship

Resource Event Agent

Jesse

Inventory Purchase

Artist/Seller

Artist/Seller
Cash
Cash
(Bank
Disbursement
Account)
Jesse

FIGURE 1-18 Basic REA Diagram for Cherokee's Expenditure Cycle

The next step is to determine the cardinalities of each relationship. Since
Cherokee's checks are written from one account only, and at least one and at most many
checks can be written from the bank account, the relationship between "Bank Account"
and "Cash Disbursement" should be (l,N) and (l,1) as indicated in Figure 1-19.
Figure 1-20 shows us that the relationship between "Inventory" and "Purchase" is
(1,1) and (l,N). That is, each art and antique piece is purchased once and once only. For
each purchase transaction, at least one piece of inventory and at most many pieces of
inventory can be bought.
The relationship between "Purchase" and "Cash Disbursement" is (O,N) and (l,N) as
shown in Figure 1-21. In other words, Jesse does not pay at the time of purchase. This is the
zero at the "Purchase" side, which shows that there are accounts payable. He pays the artist