A computer system organizes data in a hierarchy that starts with bits and bytes and progresses to field, records, files and database. A bit represents the smallest unit of data a computer can handle. On the other hand a group of bits called a byte represents a single character which can be a letter, a number or another symbol. A grouping of character into a word, a group of words or a complete number is called field. A group of related fields comprises a record; a group of records of the same type is called a file. A group of related files makes up a database. A record describes an entity. An entity is a person, place, thing or object on which we maintain information.
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