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Information Processing (Computation)
When you think about a computer and what it does, you of course think that it.. well.. computes. And this is indeed one part of its job. Computing is really another term for "information transformation"--changing information from one form to another. The computer spends a goodly amount of its time doing exactly this: performing math operations (changing numbers into other numbers), and translating information from one form to another (for example when a game determines using mathematics, what to display on the screen for you to see).
One special form of information the computer processes is its instructions. These are the commands that programmers give the computer to tell it what to do. Every time you do anything with a computer, you are really talking to a program which is talking to the computer. The language that computers speak, which is called machine language, is very complex and hard to understand, which is why it is hidden from all but the most technically-proficient engineers. Even most programmers never use machine language directly.
The key part of the computer that processes information is of course, the processor.
Next: Information Storage