SQL Server database: How to interpret precision and scale of a number

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Database
SQL Server database
We have this column in our SQL Server database: decimal(5,2) but we're not sure how to interpret this. When we're looking at it through SQL Server Management Studio, we can see what it means: decimal(Numeric precision, Numeric scale). What does precision and scale mean in real terms?
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It means a numeric filed 5 positions total length with last last 2 being decimal positions. example 123.45

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