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Karnataka Class 12 Commerce Accountancy Meaning of Data

Karnataka Class 12 Commerce Accountancy Meaning of Data

Karnataka Class 12 Commerce Accountancy Meaning of Data

Karnataka Class 12 Commerce Accountancy Meaning of Data : These are facts and may consist of numbers, text, etc. These are gathered and entered into a computer system. The computer system in turn stores, retrieves, classifies, organises and synthesises the data to produce information according to a pre-determined set of instructions. The data is, therefore, processed and organised to create information that is relevant and can be used for decision-making.

Data can be defined as a representation of facts, concepts, or instructions in a formalized manner, which should be suitable for communication, interpretation, or processing by human or electronic machine.

Data is represented with the help of characters such as alphabets (A-Z, a-z), digits (0-9) or special characters (+,-,/,*,<,>,= etc.)

Computer data is information processed or stored by a computer. This information may be in the form of text documents, images, audio clips, software programs, or other types of data. Computer data may be processed by the computer’s CPU and is stored in files and folders on the computer’s hard disk.

At its most rudimentary level, computer data is a bunch of ones and zeros, known as binary data. Because all computer data is in binary format, it can be created, processed, saved, and stored digitally. This allows data to be transferred from one computer to another using a network connection or various media devices. It also does not deteriorate over time or lose quality after being used multiple times.

Karnataka Class 12 Commerce Accountancy Meaning of Data


It is being acknowledged as a sixth element of the computer system. The manner in which a particular computer system is connected to others say through telephone lines, microwave transmission, satellite link, etc. is the element of connectivity. 12.2

Capabilities of Computer System

A computer system possesses some characteristics, which, in comparison to human beings, turn out to be its capabilities. These are as follows ;

Speed : It refers to the amount of time computers takes in accomplishing a task or completes an operation. Computers require far less time than human beings in performing a task. Normally, human beings take into account a second or minute as unit of time. But computers have such a fast operating capability that the relevant unit of time is fraction of a second. Most of the modern computers are capable of performing a 100 million calculations per second and that is why the industry has developed Million Instructions per Second (MIPS) as the criterion to classify different computers according to speed.

Accuracy : It refers to the degree of exactness with which computations are made and operations are performed. One might spend years in detecting errors in computer calculations or updating a wrong record. Most of the errors in Computer Based Information System(CBIS) occur because of bad programming, erroneous data and deviation from procedures. These errors are caused by human beings. Errors attributable to hardware are normally detected and corrected by the computer system itself. The computers rarely commit errors and perform all types of complex operations accurately.

Reliability : It refers to the ability with which the computers remain functional to serve the user. Computers systems are well-adapted to performing repetitive operations. They are immune to tiredness, boredom or fatigue. Therefore, they are more reliable than human beings. Yet there can be failures of computer system due to internal and external reasons. Any failure of the computer in a highly automated industry is unacceptable. Therefore, the companies in such situations provide for back-up facility to swiftly take over operations without loss of time.

Versatility : It refers to the ability of computers to perform a variety of tasks: simple as well as complex. Computers are usually versatile unless designed for a specific application. A general purpose computer is capable of being used in any area of application: business, industry, scientific, statistical, technological, communications and so on. A general purpose computer, when installed in an organisation, can take over the jobs of several specialists because of its versatility. computer system when installed can take over the jobs of all these specialists because of being highly versatile. This further ensures fuller utilisation of its capability.

Storage : It refers to the amount of data a computer system can store and access. The computer systems, besides having instant access to data, have huge capacity to store such data in a very small physical space. A CD-ROM with 4.7” of diameter is capable of storing a large number of books, each containing thousands of pages and yet leave enough space for storing more such material. A typical mainframe computer system is capable of storing and providing online billion of characters and thousands of graphic images. It is clear from the above discussion that computer capabilities outperform the human capabilities.

Karnataka Class 12 Commerce Accountancy Meaning of Data

Limitations of a Computer System

In spite of possessing all the above capabilities, computers suffer from the following limitations :

Lack of Commonsense : Computer systems as on date do not possess any common sense because no full-proof algorithm has been designed to programme common sense. Since computers work according to a stored programme(s), they simply lack of commonsense.

Zero IQ : Computers are dumb devices with zero Intelligence Quotient (IQ). They cannot visualise and think what exactly to do under a particular situation, unless they have been programmed to tackle that situation. Computers must be directed to perform each and every action, however, minute it may be.

Lack of Decision-making : Decision-making is a complex process involving information, knowledge, intelligence, wisdom and ability to judge. Computers cannot take decisions on their own because they do not possess all the essentials of decision-making. They can be programmed to take such decisions,which are purely procedure-oriented. If a computer has not been programmed for a particular decision situation, it will not take decision due to lack of wisdom and evaluating faculties. Human beings, on the other hand, possess this great power of decision-making.

Karnataka Class 12 Commerce Accountancy Meaning of Data

Components of Computer

The functional components of computer system consist of Input Unit, Central Processing System and Output Unit. The way these components are embedded in a computer may differ from one architectural design to another, yet all of them constitute the essential building blocks of a computer system.

Input Unit

It controls various input devices which are used for entering data into the computer system. Keyboard and Mouse, for instance, are the most commonly used input device. Other such devices are magnetic tape, magnetic disk, light pen, optical scanner, Magnetic Ink Character (MICR) Recognition, Optical Character Recognition (OCR), bar code reader, smart card reader, etc. Besides, there are other devices which respond to voice and physical touch.

A menu layout is displayed on a touch sensitive screen. Whenever user touches a menu item on touch-screen, the computer senses which particular menu item has been touched and accordingly performs the operation associated with that menu item. Such touch screens have been installed at major railway stations for obtaining the online information about arrival and departure of trains.

Central Processing Unit (CPU)

This is the main part of computer hardware that actually processes data, according to the instructions it receives. It controls the flow of data by directing the data to enter the system, places the data into its memory, retrieves the same as and when needed and directs the output of data according to a set of stored instructions.

It has three main units as described below :

(a) Arithmetic and Logic Unit (ALU) : It is responsible for performing all the arithmetic computations such as addition, subtraction, division, multiplication and exponentiation. In addition to this, it also performs logical operations involving comparisons among variables and data items.

(b) Memory Unit : In this unit, data is stored before being actually processed. The data so stored is accessed and processed according to a set of instructions which are also stored in the memory of the computer well before such data is transmitted to the memory from input devices.

(c) Control Unit : This unit is entrusted with the responsibility of controlling and coordinating the activities of all other units of the computer system. Specifically, it performs the following functions :

• Read instructions out of memory unit;

• Decode such instructions;

• Set up the routing of data, through internal circuitry/wiring, to the desired place at right time; and

• Determine the input device from where to get next instruction after the instruction in hand has been executed.

Output Unit After processing the data, the information produced according to a set of instruction need to be made available to user in a human readable and understandable form. A computer system, therefore, needs an output device to communicate such information to the user. Essentially, the output device is assigned the task of translating the processed data from machine coded form to a human readable form.

Data Processing Cycle

Data processing is the re-structuring or re-ordering of data by people or machine to increase their usefulness and add values for a particular purpose. Data processing consists of the following basic steps – input, processing, and output. These three steps constitute the data processing cycle.

  • Input − In this step, the input data is prepared in some convenient form for processing. The form will depend on the processing machine. For example, when electronic computers are used, the input data can be recorded on any one of the several types of input medium, such as magnetic disks, tapes, and so on.
  • Processing − In this step, the input data is changed to produce data in a more useful form. For example, pay-checks can be calculated from the time cards, or a summary of sales for the month can be calculated from the sales orders.
  • Output − At this stage, the result of the proceeding processing step is collected. The particular form of the output data depends on the use of the data. For example, output data may be pay-checks for employees.

Karnataka Class 12 Commerce Accountancy Meaning of Data

The commonly used output devices include: external devices like monitor also called Visual Display Unit (VDU), printer, graphic plotter for producing graphs, technical drawings and charts and internal devices like magnetic storage devices. Recently, a new device being perfected is the speech synthesiser, which is capable of producing verbal output that sounds like human speech. Information:

Evolution of Computerised Accounting

Manual system of accounting has been traditionally the most popular method of keeping the records of financial transactions of an organisation.Conventionally, the bookkeeper (or accountant) used to maintain books of accounts such as cash book, journal and ledger so as to prepare a summary of transactions and final accounts manually. The technological innovations led to the development of various machines capable of performing a variety of accounting functions.

For example, the popular billing machine was designed to typewrite description of the transaction along with names, addresses of customers. This machine was capable of computing discounts; adding the net total and posting the requisite data to the relevant accounts. The customer’s bill was generated automatically once the operator has entered the necessary information. These machines combined the features of a typewriter and various kinds of calculators.

With substantial increase in the number of transactions, the technology advanced further. With exponential increase in speed, storage and processing capacity, newer versions of these machines evolved. A computer to which they were connected operated these machines. The success of a growing organisation with complexity of transactions tended to depend on resource optimisation, quick decision-making and control. As a result, the maintenance of accounting data on a real-time (or spontaneous) basis became almost essential. Such a system of maintaining accounting records became convenient with the computerised accounting system.

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Karnataka Class 12 Commerce Accountancy Meaning of Data

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