Introduction to Data Processing


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In today’s class, we will be talking about the introduction to data processing. Enjoy the class!

Introduction to Data Processing

Data Processing |

Data Processing is the process of producing meaningful information from raw data.  It describes the series of actions taken to produce useful information by collecting all items of data together and performing operations on them.  Data processing aims to convert raw data into information.

Data: Data represent the raw unprocessed input element introduced into a system from which useful information is extracted.  Data is used to describe the facts and figure obtained which have not been grouped, related or evaluated in any way.

Information: Information consists of data which have been recorded organized classified and processed into a useful and meaningful form.  It is the output element of a data processing system.

Qualities of good information

  1. Accuracy
  2. Timeliness
  3. Completeness
  4. Relevance
  5. Up to date
  6. Cost-effectiveness

Data processing stages

  1. Origination
  2. Preparation/Sorting
  3. Input
  4. Processing
  5. Output
  6. Storage
  7. Distribution

Methods/techniques of data processing

  1. Manual Data Processing
  2. Mechanical Data Processing
  3. Electronic Data Processing


  1. Differentiate between data and information.
  2. List five qualities of good information.
The electronic computer

Characteristics of a Computer

  1. Speed – high speed of operation
  2. Storage – Large storage volume
  3. Versatility – Can be used to perform a wide range of tasks
  4. Diligence – It can perform similar operations at the same speed and accuracy at all times.
  5. Automatic – Tasks are performed automatically based on the programme (instructions) given to the computer.
Components of a computer
  1. Input devices – i. .e. the unit through which data are fed into the computer e.g. keyboards, terminals, optical mark readers optical character readers, magnetic ink character readers.
  2. Central processing unit – This is the part of the computer that carry out the computations and calculations. It is made up of

(a)      The control unit

(b)      The Arithmetic and Logic Unit

(c)       The Internal Memory or Storage

  1. Output devices – These are used to transmit processed data to the users e.g. printer, visual display units, plotters.
  2. Storage devices – These are external storage devices used to hold information that would be required by the users of the computer e.g. diskettes, magnetic tapes, punched cards etc.
Application of computers in an accounting environment

Computers are used in finance and accounting for such applications as

  1. Payroll system
  2. Nominal Ledger (or General Ledger) system
  3. Stock Control System
  4. Maintenance of Fixed Assets Register
  5. Reconciliation of Accounts/Auditing
  6. The automatic cheque clearing system
  7. Purchase Ledger System
  8. Sales Ledger System
  9. Financial Planning Services
  10. Preparation of Management Reports
  11. Financial Forecasting/Projections and Budgeting
  12. Computation of job cost estimates
  13. Electronic fund transfer e.g. from one bank to another.


  1. What is a Computer?
  2. List and explain three methods of data processing
General evaluation
  1. List six accounts found in the nominal ledger
  2. List six accounts found in the general ledger
  3. State two uses of the trial balance
  4. List five examples of accounts that have debit balances
  5. List four examples of accounts that have credit balances

Reading assignment

Simplified Book-keeping and Accounting page 487-501

Weekend assignment

  1. The fourth stage of the accounting information system is ____________ (a) recording                      (b) interpreting       (c) summarizing      (d) classifying
  1. In the permanent storage device, DASD means________ (a) Direct Access Systems Device                (b) Direct Access Storage Device         (c) Data Access System Device         (d) Data Access Storage Device
  1. The input-output and central processing units are the basic components of a computers _____ (a) memory   (b) software  (c) printer        (d) skill
  2. The computer that functions by taking discrete numbers and performing the mathematical calculation is called ______ (a) mainframe  (b) digital      (c) hybrid analogue
  1. Which part of the computer system does the keyboard device belong to ______(a) output unit (b) logic unit     (c) input unit    (d) control unit


  1. Mention and explain with diagrams, the stages of data processing.
  2. State four reasons why some firms still use manual data processing instead of electronic data processing.


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