Introduction to Data
Processing
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Introduction
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This chapter presents the four stages of the
data processing cycle.
1 Data input
2 Data storage
3 Data processing
4 Information output
4-2
Four Stages of the Data
Processing Cycle
Data
storage
Data
input
Data
processing
Information
output
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Data Input
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The first step in the data processing cycle is
data input.
During the data input stage, transaction data
are captured and converted to machineprocessible form.
Traditionally, transaction data has been
captured on preprinted source documents.
What are some source documents?
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Data Input – Source Documents
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Purchase requisitions
Checks and remittances from customers
Customer orders
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Data Input
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How can data input accuracy and efficiency
be improved?
» Have a well-designed computer screen
resembling that of source documents.
» Have the system prompt the user to input all
necessary data.
» Use scanning devices instead of keying.
» Have source data automation like ATMs.
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Forms of Information Output
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Information is presented in three forms:
1 Documents
2 Reports
3 Responses to a query
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Forms of Information Output
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Documents are records of transactions or other
company data.
What are some examples of documents?
checks and invoices transmitted to external
parties
purchase requisitions used internally
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Forms of Information Output
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Reports are prepared for both internal and
external users.
Internal users need reports to control
operational activities, to make decisions,
and design strategies for the business.
External users need reports to evaluate
company profitability, or to comply with
regulatory requirements.
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Forms of Information Output
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Some reports, such as financial statements
and sales analyses, are produced on a regular
basis.
Others are produced on an exception basis
to call attention to unusual conditions.
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Forms of Information Output
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Response to queries:
To respond to problems and questions that
need rapid action or answer, PCs or terminals
are used to query the system.
Online forms are often used to display output
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Purpose of Information Output
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External users:
» Financial statements are produced to meet
stewardship requirements.
» Income tax returns and 10-K filings with
the Securities and Exchange Commission
are produced to comply with legal
requirements.
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Purpose of Information Output
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Internal users:
» Budgets, sales forecasts, and projected cash
flow statements are prepared for planning
purposes.
» Production and delivery schedules, open
purchase orders, and inventory stock status
reports are prepared to help effectively
manage day-to-day operations.
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