Final answer:
The statement is true; binary numbers are composed entirely of 0s and 1s. These digits, or 'bits', form the basis of digital data used in technology for reliable and efficient transmission and storage.
Step-by-step explanation:
The statement that binary numbers are composed entirely of 0s and 1s is true. Binary numbers operate on base 2, which means they use only two digits, 0 and 1, to represent all possible values. Every digit in a binary number is referred to as a 'bit'. Digital data, such as cell phone conversations and computer data, are often transmitted in binary form. This binary representation is essential for electronic communication because it allows for consistent and clear data transmission, especially when signals are weak. Additionally, using binary data enables the use of computer algorithms to compress the data, which makes it possible to transmit more information in each frequency range.