Chapter 4 Introduction to Data Processing

Figure (below) shows the four stages of the data processing cycle : data input, data storage, data processing and information output.

Data Storage

Data Input

Data Processing

Information Output

Data Input :
During data input stage, transaction data are captured and converted to machine-processible form. To facilitate subsequent processing, data input may also require the following preparation:
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Classification: by assigning identification codes (account

number, department number, etc.) to records based on a predetermined system, such as a chart of accounts.

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Verification: to ensure data accuracy. It is less costly and

more efficient to prevent data entry errors than to detect and correct them at the time of entry or once they are in the system.

Transmittal : transmittal from one location to another .

Traditionally, transaction data has been captured on preprinted forms called "Source documents". Examples of internal source documents include sales orders, purchase requisitions, receiving reports, and employee time cards. External source documents include invoices from suppliers and checks and remittance advices from customers. Data capture on source documents must be transformed into machine readable format. Keying the data into an on-line terminal or microcomputer is one way this is done. Data input accuracy and efficiency can be further improved by the use of scanning devices instead of keying. One way to do this is to use a "turnaround document", a record of company data sent to an external party and then returned to the system as input.

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Source data automation is used to improve the accuracy and efficiency of data input . They capture transaction data in a machine-readable form at the time and place of their origin.

Data storage:
A company's data is one of its most important resources. However, the mere existence of relevant data does not guarantee its usefulness. An organization must have ready and easy access to its data in order to function properly. Therefore, accountants need to understand how data is organized and stored in an AIS and how that data can be accessed . In essence, accountants need to know how to mange data for maximum corporate use.

Fundamental Data Storage Concepts and Definitions:

Imagine how difficult a textbook would be to read if it were not organized into chapters, sections, paragraphs, and sentences. Here we explains basic data storage concepts using accounts receivable information.

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An entity s something about which information is stored. Examples of entities include employees, inventory items and customers. Each entity has attributes or characteristics of interest which need to be stored. Examples of attributes include customer number, customer name, address, balance. Computers store data by organizing smaller units of data into larger, more meaningful ones. This data storage hierarchy, beginning with fields (the smallest element) and ending with data bases(the largest). Is shown in figure 4-1 below.

Figure 4-1 Hierarchy of Data Storage Elements Field Record

File

Data base

Data values are stored in a physical space called a field. A number of fields are grouped together to form a record , a

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collection of data values that describe specific attributes of one entity .In figure 4-2 each row represents a different record and each column represents an attribute, or field . Thus each intersecting row and column in figure 4-2 is a field within a record and contains a data value . Related records are grouped together to form a file. For example, all customer receivable records are stored in an accounts receivable file. Files containing related data are combined to form a data base.

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Types of Files:
Two basic types of files are used to store data: 1- Master file: A master file contains all the data that a company needs about an item of interest. 2-Transaction file: It contains data about a specific type of transactions it is used to update master files.

File Access & Organization:

Accessing individual Records: Records are updated, stored and retrieved using an identifier called a primary key ( customer No., invoice No.) .A secondary key is another field used to identify a record, it can be used for sorting and can enhance data processing efficiency. File Organization: It refers to the way data are stored on the physical storage media .

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There are three ways:

1-

Sequential access files: Store records in order according to their primary key (examples: customer number from 00001 to 99999)

2-

Indexed sequential access method files: It store records in sequential order, but also have an index that links primary keys with their physical address.

3-

Direct access files: It store records in no particular order (mathematical algorithm).

Data Processing:
The most common data processing activity is data maintenance, which is the period processing of transactions to update stored data. Four types of data maintenance are commonly used:
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Additions: Insert new records into a master file. Deletions: Remove records from a master file.

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3-

Updates: Revise current balances in master files, generally by adding or subtracting an amount that is stored in a transaction record.

4-

Changes: Modify the data values of other fields in master files, such as changing customer credit ratings and addresses.

There are two approaches for updated the master files:

1-

Batch processing: Updating master files periodically to reflect all transactions that occurred during a given time period is called batch processing.

2-

On Line, Real-Time Processing: In on Line, real-time processing, the computer captures data electronically, edits it for accuracy and completeness, and immediately processes it.

Information Output:
Information is presented in three forms is : -Document -Report -Response to a query

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Documents are records of transactions or other company data, such as checks and invoices, are transmitted to external parties. The purpose of information output for external users, financial statements are produced to meet stewardship requirements. For internal users, budgets, sales forecast, projected cash flow statements, and new product revenue and cost estimates are prepared for planning purposes.

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