What is the purpose of transaction processing system? Differentiate between master data and transaction data.

A Management Information System ICT Revision Questions and Answers

Transaction processing system processes transactions and produces reports. Business transactions occur when a company produces a product or provides a service. The transaction processing system supports the monitoring, collection, storage, processing and dissemination of the organization’s basic business transactions. Transaction processing systems are those business systems which process day-to-day transactions of an organization to carry out its business operations. Every transaction may generate additional transactions. For example, when transaction of a purpose takes place, it would change the inventory level, accounts payable etc. The information system that supports these transaction processes is the transaction processing system. Transaction processing system is the backbone of an organization’s information system. Transaction processing systems provide the base for all other internal information support.
Master data is generally permanent data that remains with the system as long as the system is in use. Master data is the main data used the system. For example, an inventory control system could have an inventory master file with one record for each item in inventory .Each record contains fields for the item number, item description, unit cost, unit price and quantity on hand.
Transaction data is data about transactions that have occurred. Transaction data is data about transactions that have occurred. For example, in an inventory control system, an inventory transaction file could be used to store data about additions to and removals from stock. Each record contains fields for item number, the additions to stock and issues from stock. Transaction data generally with the system only until the transactions are processed. The transaction data is then replaced with other transaction data for new transactions. Master and transaction data may be stored in data files or databases; which would form the stored data component of the system.

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