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I give you a coin, and you flip it 100 times. Let X = the number of heads observed in those 100 flips. You build the following line of reasoning:
Steps
1) You assume each flip is an independent, random outcome.
2) You assume the coin is fair.
3) Using your statistics book, you conclude that X is distributed binomial with mean 50 and variance 25.
4) Based on this distribution, you conclude that you would observe X < 41 or X > 59 approximately 5% of the time.
5) You observe X = 37 and conclude that the probability that X < 41 or X > 59 is not 5%.
6) Because the probability that X < 41 or X > 59 is not 5%, you conclude the coin is not fair.
Which of these steps is part of deductive reasoning?
Financial Statements
Official records that detail the financial activities and condition of a business, organization, or individual, typically including balance sheet, income statement, and statement of cash flows.
Retained Earnings
The portion of a company's profits kept in the business after dividends are paid to shareholders, used for reinvestment or to pay off debt.
Non-controlling Interest
An ownership interest in a corporation where the percentage of shares owned does not give the shareholder the control of the company.
Debit Entry
An accounting entry that increases an asset or expense account, or decreases a liability or equity account.
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