Both computerized and computer based AIS require a definite data structure for storing the accounting data. As already mentioned the databases are used for storing accounting data. The process of designing database (for accounting) begins with a reality (or accounting reality) that is expressed using elements of a conceptual data model.
The process of designing a database for accounting is best described through a flow chart:
Reality : It refers to some aspect of real world situation for which database is to be designed. In the context of accounting, it is accounting reality that is to be expressed with complete description.
ER Design : This is a formal blue print, with a pictorial presentation in which Entity Relationship (ER) model concepts are used to represent description of reality.
Relational Data Model : It is representational data model through which ER design is transformed into interrelated data tables along with the restriction in the form of rules that are specified to ensure the consistency and integrity of stored data.
Normalization : This is process of refining a database design (that consists of interrelated data tables) through which the possibility of duplicate or redundant data items is reduced or eliminated.
Refinement : This is the outcome of the process of normalization as mentioned above. The final database design is arrived at after the process of normalization is completed.
Flow chart depicting the process of designing a database for accounting.
