Which of the Following Is Not an Example of Signaling

question 72

Multiple Choice

Which of the following is not an example of signaling?

• A) An employer asks if he can run a background check on a potential employee before hiring him or her.
• B) A boyfriend gives his girlfriend a necklace with her favorite gemstone for Valentine's Day.
• C) A home flooring company advertises its high Better Business Bureau rating during its television commercials.
• D) An college applicant lists her membership in academic honor societies on her application.

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Definitions:

Operating Activities

Operating activities refer to the day-to-day functions involved in running a business, which are directly related to its primary activities and include generating revenue and paying expenses.

Depreciated Equipment

Equipment whose value has been reduced over time due to wear and tear or obsolescence, reflecting its reduced utility.

Bonds Payable

Long-term liabilities representing the amount a corporation or government is obligated to repay bondholders, including principal and interest.

Indirect Method

An accounting procedure used in cash flow statements to adjust net income for changes in non-cash items and cash operating expenses.