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ACCA Applied Knowledge · Management Accounting · Sources of data

A retailer's point-of-sale system records thousands of individual transactions each day, including item code, time and price. Which statement correctly describes how this differs from the weekly sales report prepared for the store manager?

The individual transaction records are raw data, while the weekly sales report is information. Data are unprocessed facts and figures, and they become information when they are processed, summarised and presented in a form meaningful to the manager making decisions.

  1. AThe transaction records are information and the weekly report is data
  2. BThe transaction records are raw data and the weekly report is information because it has been processed into a meaningful formCorrect
  3. CBoth are data because neither has been audited
  4. DBoth are information because both are held on a computer system

Explanation

Data are raw facts and figures with no context. Once processed, summarised and given meaning for a decision maker, they become information. The weekly report is processed output, so it is information, whereas the individual transactions are raw data. Option A reverses the definitions.

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