What is the smallest piece of information processed by a computer called?

The smallest piece of information processed by a computer is referred to as a bit. A bit, which stands for binary digit, can have a value of either 0 or 1, representing the most fundamental unit of data in computing. All forms of electronic data are ultimately broken down to bits, as they form the basic building blocks upon which more complex data structures are constructed.

When bits are grouped together, they can form larger units of data; for instance, 8 bits together make a byte, which can represent a wide range of information, from characters in text to colors in graphics. However, the concept of a bit being the smallest unit remains fundamental to understanding how data is processed and stored in computers.

Contextually, while other options like data, byte, and output represent different concepts in computing—data being any information processed by a computer, a byte being a group of bits, and output referring to information produced by a computer—none serve as the defining unit of information as a bit does. This emphasizes the importance of a bit in the hierarchy of data representation in computing systems.