Subcategory, Level 2

A top level category has no parent records; if a category has one or more parents specified, it is then a subcategory. A subcategory can have any number of parent categories, and can also be a top level category too.
Subcategories

Basic Subcategory, Level 3

This subcategory is a third level of hierarchy.

Subcategory with Image, Shortened Product Display

You can use images to represent categories too. Whether it shows for this category when viewing the parent category depends on the display type for subcategories within that parent. We've also set this category to display products within it in a different 'shortened' format.

Extended View Category

Sometimes you want to cut the number of clicks for your users by having fully-featured products within the category view, so users can add items to basket from the category view itself. This category shows that multiple product types, including options products, can be mixed within a category. Note that certain product details will only show when a user clicks through - for example, the reviews, attributes, or quantity discounts.