How do you tell if a horse is on the bit?

Excuse me, but could you please elaborate on how one can accurately determine whether a horse is 'on the bit'? I've heard the term before, but I'm unsure of the exact signs to look for. Is it a matter of observing the horse's posture, facial expressions, or perhaps the way it responds to the reins? Could you provide some concrete examples or tips that might help a novice rider like myself recognize this state in their horse?