Which of the Following Must Be True About a Signal

question 16

Multiple Choice

Which of the following must be true about a signal that is used to reveal private information in order for the signal to be effective? It must be:

• A) "as seen on TV."
• B) free to the signalling party.
• C) costly to the signalling party but less costly to the party with the higher-quality product.
• D) applied to an inexpensive product.

---

Definitions:

Adjusting Entries

Documentation in financial records at the termination of an accounting period to allocate gains and expenses to the correct timeframe.

Trial Balance

A financial spreadsheet where all ledger balances are gathered into columns for debits and credits, ensuring both totals match.

Debit Column

The left-hand side of a ledger account, recording increases in assets and expenses, and decreases in liabilities, equity, and revenue.

Expense Recognition Principle

An accounting principle that dictates expenses should be recognized in the period in which they are incurred to earn revenues.