Computer files.

These are equivalent of books and records in a manual system and are described as either transaction files or master files.

1. Transaction files.
These are equivalent of journal such as sales journal, the purchases journal or the cash book. They contain details of individual transactions, but unlike books, a transaction file is not a cumulative record. A separate file is set up for each batch. Thus in real time systems, a transaction file is not necessary, but good systems will always create a transaction file for control purposes to provide a security back up, in case of errors or computer malfunctions during processing data to master file.

2. Master files.
These contain what is referred as standing data. They may be the equivalent of ledgers but may also contain semi-permanent data needed to process transactions. E.g. a debtor‘s master file the equivalent of debtor‘s ledger but will also include data that in a manual system may be kept separately such as invoicing address, discount terms and credit limits, even nonaccounting data as cumulative sales to specific customers.

When master files are updated by processing them against a transaction file, the entire contents of the file are usually re-written in a separate location so that after processing, the two files can be compared and the difference agreed to the total of the transaction file. Any errors in updating the master file will thus be detected and the process repeated. In practice, the old copy of the master file and transaction file will be retained until the master file is updated again. This is the grandfather-father-son approach. If the current master file is corrupted or lost due to machine or operator error, previous versions provide back up from which the master file can be re-created.

Master files holding semi-permanent data would in the case of debtor‘s system include current sales price list and in the case of personnel department, a personnel file giving details of wage rates, authorized deductions and cumulative record of amounts paid to date for purpose of providing tax certificates. A special class of transactions includes those of amending standing data held in master files such as sales price or wage rate. These transactions require special consideration because an error in such data held in a master file will cause errors in all transactions processed against the master file. E.g. an item priced erroneously in sales price list will mean all sales will be charged to customers at the wrong price.

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