Both addition, subtraction, division and multiplication can be performed on it.
Construction & Anatomy - The abacus is typically constructed of various types of hardwoods and comes in varying sizes. The frame of the abacus has a series of vertical rods on which a number of wooden beads are allowed to slide freely. A horizontal beam separates the frame into two sections, known as the upper deck and the lower deck.
Basics - Calculations are performed by placing the abacus flat on a table or one's lap and manipulating the beads with the fingers of one hand. Each bead in the upper deck has a value of five; each bead in the lower deck has a value of one. Beads are considered counted, when moved towards the beam that separates the two decks. The right-most column is the ones column; the next adjacent to the left is the tens column; the next adjacent to the left is the hundreds column, and so on. After 5 beads are counted in the lower deck, the result is "carried" to the upper deck; after both beads in the upper deck are counted, the result (10) is then carried to the left-most adjacent column. Floating point calculations are performed by designating a space between 2 columns as the decimal-point and all the rows to the right of that space represent fractional portions while all the rows to the left represent whole number digits.
Numeric representation of the number: 87,654,321. - If your browser is Java-aware then the applet will identify its various parts in your browser's status-area as you move your mouse-pointer over it; the beads will move when you click on them and the value of each column will be displayed on the top frame.
Refering to the Figure/Applet above, the third column (from the left), representing the number 8, is composed of 1 bead from the top-deck (value 5) and 3 beads from the bottom-deck (each with a value of 1, totaling 3); the sum of the column (5+3) is 8.
Similarily, the fourth column representing the number 7, is composed of 1 bead from the top-deck (value 5) and 2 beads from the bottom-deck (each with a value of 1, totaling 2); the sum of the column (5+2) is 7.
Evolution of the suan-pan - On each rod, the classic Chinese abacus (suan-pan) has 2 beads on the upper deck and 5 on the lower deck; such an abacus is also referred to as a 2/5 abacus.
The 2/5 style survived unchanged until about 1850 at which time the 1/5 (one bead on the top deck and five beads on the bottom deck) abacus appeared. In the 1930s, the 1/4 abacus (soroban), the present day style preferred and manufactured in Japan, appeared. The 1/5 models are rare today and 2/5 models are rare outside of China (except in Chinese communities in North America and elsewhere).
Thanks to Luis Fernandes and his abacus web page.