January 29, 2022

SB-Accounting

Accounting + Finance Blog

Definition of data and detail explanations

Definition of data and detail explanations
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Every business organization uses data. A business without data is similar to a mad man in a pit hole. Data is collected by businesses on a daily basis. A trading business collects sales data every day. A service firm also collects data relating to estimates, cost of providing services, among others. But what exactly is data?

Meaning of Data

Generally, data is seen as unprocessed information.

In the AIS field of study, data are facts that are yet to be processed.

More specifically, data are raw facts that are unprocessed and cannot be used to make economic decisions.

Key Explanations

Data are facts.
Facts can be in any form. It may be a written text or group of texts. A number or group of numbers. It may be a combination of text and numbers. For example, a message to a supervisor to buy equipment parts to repair major equipment of the entity is data. Such data becomes information when the supervisor necessary steps and deliberate action on the request.

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Aside from text and numbers (binary numbers), facts or data can be in the form of other special characters like #,& and @. Also, data can be in the form of pictures and videos.

Raw facts may be structured or unstructured. Structured data is a well-organized data set. This is found in an organized business. Unstructured data are not organized. They scattered in different places of an organization.

Data must be processed.
Data is processed in the form of summary, editing, refining, and sorting. Processing is done to filter irrelevant data from a set of data.

To explain this, a set of data may include the date, narration, amount, and voucher number. However, this can be processed further to exactly what is needed. If the voucher number is irrelevant, it will be sorted out or refined to exclude it.

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Data cannot be used to make economic decisions.
If data is sent to a decision-maker, it becomes irrelevant, if and only if, he or she does not take any necessary action. The decision-maker may need a combination of several data to take action.

To illustrate this, the personnel manager sorting information regarding employees’ educational qualifications, experience, and skills. Each of these items is data to the manager. Why? Each data lacks sense independently.

In summary

Data cannot be used to make decisions. They are mere pieces of facts that are raw and useless in themselves. However, data for a particular staff may be information to other staff. For example, information to a supervisor may be data to a Director of finance. Also, note that data is the plural word for the datum.

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