Theory question 104
Information Technology in Accounting(a) What is data processing?
(b) Identify three stages of data processing.
(c) State three advantages and two disadvantages of a computer.
Show the model answer
(a) Data processing is the collection and handling of raw data (facts and figures) to turn it into meaningful information for decision making.
(b) Input stage; processing stage; output stage (storage may also be mentioned).
(c) Advantages (any three): very fast; accurate; stores large volumes of data; can work for long hours without tiring; reduces repetitive manual work; quick retrieval of information.
Disadvantages (any two): high cost of purchase and maintenance; may cause unemployment; depends on stable power supply; wrong input gives wrong output (garbage in, garbage out); needs trained staff; risk of fraud, viruses and data loss.
Stages follow the order input → process → output.