Bob and Rob Are Identical Twins Who Attended Grammar School

question 212

Multiple Choice

Bob and Rob are identical twins who attended grammar school through college together.Bob took a job as an engineer who must travel out of state once a week.Rob took a job as an engineer who does not have to travel out of the state.Bob earns $100,000 a year,and Rob earns $85,000 a year.Select the best explanation for this wage difference.

• A)Rob has more human capital relative to Bob.
• B)Rob has less human capital relative to Bob.
• C)Bob receives a higher wage to compensate for the disagreeable nature of business travel.
• D)Bob's higher salary supports the signaling theory of education.

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Definitions:

Account Nature

Refers to the classification of an account as either an asset, liability, equity, revenue, or expense, which dictates its role and presentation in financial statements.

Normal Balance

The side of an account on which increases are recorded, typically the debit side for assets and expenses, and the credit side for liabilities, equity, and revenue.

Account Nature

The characteristic of an account that classifies it as an asset, liability, equity, revenue, or expense.

Periodic Inventory Method

An accounting method where inventory and cost of goods sold are calculated at set intervals, such as yearly or quarterly.