This visual execution trace shows how PostgreSQL handles numeric and decimal precision. First, a table is created with a numeric column defined as NUMERIC(5,2), meaning it can store numbers with up to 5 digits total and 2 digits after the decimal point. When inserting the value 123.456, PostgreSQL rounds it to 123.46 to fit the scale of 2 decimal places. Selecting the value returns 123.46. If a value like 12345.67 is inserted, which has 7 digits, it exceeds the precision and causes an error, so it is not stored. The variable tracker shows the price value changing from NULL to 123.46 after the first insert, and no change after the failed insert. Key moments clarify why rounding happens and what causes errors. The quiz questions test understanding of rounding, error steps, and scale effects. The snapshot summarizes the key rules for numeric precision and scale in PostgreSQL.