The storage and processing of data are explained in terms of characters in the computer. The characters are represented electronically with a two-state binary system of numbers. A binary means two. The binary system is a fundamental principle of digital computers. Everything that goes into a computer is converted into binary digits, 0 and 1.

Bit
A bit stands for BInary digT, and is a single digit in a binary number (1 or 0). That is each 0 or 1 in the binary system is bit. Physically, a bit is a cell in memory, a magnetic spot on disk or tape, and a pulse of high or low voltage through a circuit in the computer.

Bytes
A storage unit in the computer is groups of bits called characters, bytes, or words. The most common storage unit is the byte, which is made up of eight bits and typically represents a single alphanumeric character - number, letter, and special character.

Parity Bit
A parity bit is an extra bit added to a byte for error detection purposes in data transmission. Parity checking is accomplished by using a parity bit that is an extra bit automatically added to a byte for purposes of testing accuracy.
There are even-parity systems and odd- parity systems. In an even-parity system, the parity bit is set to either 0 or 1 to ensure that the number of 1s is even. Odd-parity systems perform the opposite.