An extension in asterisk is a user that is able to connect and use the system to place or receive calls, use voicemail and other features of asterisk. In order to define asterisk extension we should edit users.conf (Asterisk 1.4), iax.conf and sip.conf files.
There are just few conventions:
1) the extension must be numeric es. [123] 2) the callerid must be in the format "name <extension>"