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Accounting Reality in the Context of Entity Relationship (ER) Model

The entity - relationship (ER) data model is developed out of the exercise of using commercially available DBMS to model application database. Earlier, commercial systems were based on the hierarchical and network approach. The entity - relationship model is a generalization of these models. It allows the representation of explicit constraints as well as relationships. This model of database consists of entities, attributes, identifiers and relationships which are used to express a reality for which database is to be designed. The database structure, employing the ER Model, is usually shown pictorially by using entity - relationship (ER) diagrams. The entities and the relationships between them are shown by using the ER symbols to represent different types of entities, attributes, identifiers and relationships. The symbols, which are used for the purpose, are standardized and are as follows:
  • An entity is shown as a rectangle
  • 1A weak entity is shown as a double lined rectangle
  • A diamond represents the relationship among a number of entities, which are connected to the diamond by lines
  • Identified relationship is shown as a double lined diamond.
  • The attributes shown as ovals are connected to the entities or relationships by lines.
  • Key attribute is shown as names enclosed in ovals and attached to their entity type by straight lines.
  • Multi - valued attributes are shown as double ovals
  • Derived attributes are shown as dashed line ovals
  • Diamonds, ovals and rectangles are labeled. The type of relationship existing between the entities is represented by giving the cardinality of the relationship on the line joining the relationship to the entity.


Entities are the basic units used in modeling classes of concrete or abstract objects. An entity is an object that is of interest to an organization. Objects of similar types are characterized by the same set of attributes or properties. In other words, we can say that the independent existence of a thing is known as entity. Two objects are mutually distinguishable and this fact is represented in the entity set by giving them unique identifiers.

Thus, entity means an object having physical existence (e.g., person, office, furniture, etc.) or conceptual existence (e.g., company). We have discussed the accounting reality above. It has the following five entities - accounts, vouchers, employees, account types and evidence or support documents. The accounting data is captured through these entities.

Attributes and Identifiers

The properties that characterize or further describe an entity are called its attributes. Each object must be separately identified as an entity. Identifying and classifying the objects into an entity can be difficult, because an object can belong to different entities at the same time or two or more entities may be similar. In such cases, they need to be further described so that each entity is distinguished and separately identified. Entities are distinguished and modeled using their characteristics or attributes. An association exists between different attributes of an entity. An association between two attributes indicates that the values of the associated attributes are interdependent. This correspondence between attributes of an entity is a property of the information that is used in modeling the object. We distinguish between the associations that exist among the attributes of an entity, called a relationship. Consider the employees of the firm. The firm maintains certain information, such as name, date of birth, address, designation, name and relationship of dependents, about each employee. But all this information can match with the information of some other employee. So, unique information like employee identification number or code is essential about each of them by which they can be identified. This unique number is known as identifier.
Types of Entity

Dependent Entity (Sub - Type Entity)

Independent Entity(Super- Type Entity)

Weak Entity

Strong Entity

Their existence depends on another entity

Their existence does not depend on another entity

Eg. Accounts Receivable

Eg. Sales

Symbolic Representation

Symbolic Representation

Entity Types and Entity Sets

An entity type is defined as a collection of entities which share a common definition in terms of their attributes

An entity set is a collection of all entities of a particular entity type. An entity type describes schema or a set of entities that share the same set of attributes. The collections of entities of a particular entity type are grouped into an entity set called ' Extension of the entity type'.

For example - Entity Set
The symbol used for the attributes is


Types of Attributes:
  1. Composite Vs. Simple (Atomic) Attributes: Composite attributes can be divided into smaller sub - parts to represent some more basic attributes with an independent meaning.
Example Attribute mode is the composite attribute which represents mode of payment/receipt.



Example - Cash is a simple attribute


  1. Single - Valued Vs. Multi Valued Attributes: An attribute with a single - value of an entity is a single - valued attribute.
Example - Vouno is a single - valued attribute, which represents Voucher No. of the cash transaction.

An attribute with multi value is a multi - valued attributes.

Details attribute contains the details of transactions, and so it is a multi - valued attributes.
  1. Stored Vs. Derived Attributes - Two or more attributes may be related in such a way that one or more becomes the basic attribute i.e., stored attribute, and the other becomes dependent on the basic attribute, i.e., derived attribute.



Balance is an attribute that has value which is derived from two independent attributes i.e., stored attributes, which are amount and transaction. So, balance is a derived attribute.
  1. Null - Valued Attributes - Absence of a data item is an attribute is represented by a special value called null value. For example, transaction attribute can contain a value for payments and for receipts or it can have null value.
There are three situations which may require the use of null values. They are:
  • A particular attribute does not apply to an entity
  • Value of an attribute is unknown, although it exists
  • Value of an attribute is unknown because it does not exist.
  1. Complex Attributes - The composite and null - valued attributes may be nested (grouped) to constitute complex ones:
The symbols used are Parenthesis - (), [], {}

Bank is a complex attribute with further multi - valued and composite attributes of cheque No., date and bank drawn, which can be represented within parenthesis.
  1. Key Attributes - An entity usually has an attribute whose values are distinct for each individual entity in the collection of data items. The attribute is called the key attribute of an entity.
The key attribute helps us to maintain the uniqueness in the set of data values in an entity. Entities may have more than one key attribute.

Example - Voucher No. will be the unique data item that will enable us to identify the data of each set separately. So, it becomes the key attribute for this entity.


  1. Value Sets of Attributes (Domain) - Each simple value is associated with a value set which is called domain of values. The domain specifies the set of possible values that may be assigned to a particular attribute.



An association among entities is called a relationship. The relationship set is used in data modeling to represent an association between entity sets. This association may have certain properties represented by the attributes of the relationship set. A collection of relationships of the same type is called a relationship set. A relationship that involves N entities is called N - ary relationship. A relationship is a binary relationship if the number of entity sets involved in the relationship is two. Enrolment is an example of a binary relationship involving two distinct entity sets like between the student and course. Examination is an example of binary relationship which shows the relation between a student and roll number. Like that, computing is an example of a ternary relationship which represents the relationship involving a student using a particular computing system to do the computations for a given course. Whenever an attribute debit or credit of one entity type voucher refers to another entity type Accounts, there exists a relationship between these entities as vouchers and Accounts. Vouchers and accounts are related in two ways, Vouchers contain the debit and also the credit accounts. A relationship type defines the association of entity type and a relationship instance is an association of entity instances.

The columns of a relation hold value of the attributes that we wish to associate with each entity instance, and each is labeled with a distinct attribute name at the top of the column. This name of course, provides a unique reference to the entire column or to a particular value of a tuple in the relation.

Properties of a Relation

A relation with N columns and M rows (tuples) is said to be of degree N and cardinality M. The product of a relation's degree and cardinality is the number of attribute values it contains.


Customer #

Customer Name

Customer City

Customer Phone



New Delhi








New Delhi


Weak Entity Type

A weak entity is one which does not have an identifier of its own. A weak entity type is identified with respect to its relationship because it cannot be identified without its owner entity. Let us consider a voucher. A voucher may be accompanied by a set of support documents, such as bills, detail of expenses, issued by other parties to the transaction. Such support documents are weak entity type which are used to keep track of support documents attached to each voucher via N- relationship.

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