Categorical data
Categories can be nominal, with no natural order, or ordinal, with a meaningful order. Labels may be coded as numbers, but that does not make arithmetic on the labels meaningful. Choose summaries appropriate to the type, such as frequencies or proportions, and protect against inconsistent category definitions.
Worked example
A company records invoice status as paid, overdue or disputed. These are category labels; a frequency table can count how many invoices have each status.
Common mistake
Averaging arbitrary numeric codes assigned to categories as though the codes were measured quantities.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | MA | Direct | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |