Journal Entry Reversal Entity Relationship Diagram Explanation

When developing a database design, there are many elements that are confusing and difficult to decipher. That is where an entity-relationship diagram (ERD) comes in. ERD’s are used to describe the data requirements in a database system. They are used to describe the relationships between the entities (Entity Relationship, paragraph 1). Entities are anything which an organization needs to store data. A diagram is put into a picture for of the database design. Understanding a database is easier by looking at a diagram. This tool serves as a communication source between designers and users (Data Model, paragraph 2).

The Journal Entry Adjustment is the relationship of the entity. A database has more tables, which represent entities. Links among database tables represent the relationship with other tables. In this database, the relationship of a journal entry adjustment is with the entity “accounts to be adjusted.”

The entity of this database is “accounts to be adjusted.” Because; the entity is the characteristic of the database, a description of the entity. The accounts which need to be adjusted are the main source of a database table. The accounts needed to be adjusted will be related in other database tables. For example, to build a report of adjustments made for a period that could be found in different reports. Payroll and open accounts payable are examples of accounts that might need to be adjusted.

“Cardinalities are a notation showing the nature of a relationship among entities” (Moscove, Simkin, and Bagranoff, 2003, p.201). The relationship among accounts being adjusted is, one-to-many. Normally, the accounts being adjusted are the same ones for the end of an accounting period; one account, many times adjusted (1,N).

The amount adjusted and date of adjustment, is the foreign key. The foreign key is a data field; combines information from tables to produce reports. In this case, when building a report with all the adjustment made for a certain accounting period; the amount, the date, and the account adjusted will be included in the report.

The entity “source document” is the original document that a transaction’s data was recorded from, for example, an invoice. The attributes are symbolized by an oval. The first is “posting date” which is the original date that a transaction was posted to the general ledger. The posting date also acts as the foreign key. A foreign key is a key stored in another table for the purpose of supporting a relationship (Peterson, 2002, p.289

The next attribute is “posting number.” The posting number is a number assigned to each transaction that is posted in the general ledger. By assigning each transaction a different number the database is able to search among thousands of entries for the specific one required by the user. This number is also the primary key. A primary key is