Binary Coded Decimal

BCD stands for Binary Coded Decimal. The information given to the computer is stored temporarily before it is processed. 

Consider a number 827. The binary equivalents of the digits 8, 2, 7 are 1000, 0010 and 0111 respectively. Each of these binary equivalents consists of only 4 bits. But number, letters and symbols may be represented in the binary code by 8-bit codes. The first four out of these 8 bits are called ‘zone bits' and the remaining four are called ‘numeric bits'. These ‘zone bits' are simply codes developed to represent a digit or letter which are also called ‘characters', in common. The ‘numeric bits' for numbers 0 to 9 are simply the binary equivalents. The numeric bits for letters A, B, C etc., are same as the binary equivalents for digits 1, 2, 3 etc. But the zone bits for digits 0 to 9 = 0101 zone bits of A, B, C etc = 1010.

Combining zone bits and numeric bits together we can represent any digit or a letter or combination of these.