A Test Is Valid If It

question 56

Multiple Choice

A test is valid if it

• A) measures what it is supposed to measure
• B) gives the same result on different occasions
• C) correlates positively with a reliable test
• D) b and c

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Definitions:

Market Value Method

An accounting method that values assets or securities at their current market prices rather than at historical costs or book values.

Book Value Method

An accounting technique where assets are valued in the balance sheet at their original cost minus any accumulated depreciation.

Stockholder's Equity

The residual interest in the assets of the corporation after deducting liabilities, representing the ownership interest of shareholders.

Non-interest-bearing Note

A financial instrument or loan that does not accrue interest over its life, meaning the borrower repays only the principal amount.