Which Paired Variables Might Indicate a Correlation but NOT Causation

question 126

Multiple Choice

Which paired variables might indicate a correlation but NOT causation?

• A) advertising expenditures and sales
• B) snowfall amounts and stock market performance
• C) age and health care expenditures
• D) grade point average and future income

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Definitions:

Uncollectible Account

A receivable that a company has deemed to be uncollectable from the debtor, often written off as bad debt or expense.

Accounts Receivable

Funds that are owed to a company by customers for goods or services delivered or used but not yet paid for, typically within a short-term period.

Allowance for Doubtful Accounts

A contra-asset account that represents the estimated portion of accounts receivable that may not be collectible.

Bad Debts Expense

The amount of receivables that a company does not expect to collect and thus writes off as a loss in its accounting records.