I am asking this out of a curiosity. Basically my question is when you have a database which needs a row entry to have things which act like flags, what is the best practice
I would recommend using a BOOLEAN datatype if your database supports this.
Otherwise, the best approach is to use NUMBER(1) or equivalent, and put a check constraint on the column that limits valid values to (0,1) and perhaps NULL if you need that. If there is no built-in type, using a number is less ambiguous that using a character column. (What's the value for true? "T" or "Y" or "t")
The nice thing about this is that you can use SUM() to count the number of TRUE rows.
SELECT COUNT(1), SUM(ActiveFlag)
FROM myusers;