Accounting Information Systems: The Processes and Controls, 2nd Edition

THE NEED FOR DATA COLLECTION AND STORAGE (STUDY OBJECTIVE 1)

Each day that a business operates, it may have hundreds or thousands of transactions with customers and vendors. Every one of these transactions generates data that must be processed to fill customer orders and purchase inventory and supplies. Data are the set of facts collected from transactions, whereas information is the interpretation of data that have been processed. For example, to process a sale to a customer, the business must collect many data items from the customer such as name, address, credit card number, items ordered, and shipping address. These data collected from all transactions that occur represent a large amount of data. This may be more obvious when you think of the volume of sales that occur at large companies such as L.L. Bean, Lands' End, J.Crew, and Walmart, as presented in previous The Real-World example. Similarly, each purchase of inventory or supplies involves collecting and processing a large amount of data. It is necessary to collect and process these data so that they can be translated into information that is useful to the business. Previous chapters described the accounting information systems that capture and process this large volume of data. However, those chapters did not describe the detail regarding the storage, retrieval, and use of these data.

The data collected in any transaction must be stored for many reasons. First, to complete a transaction such as a sale, detailed data must ...