The Exponential Distribution

question 26

Multiple Choice

The exponential distribution:

• A) has the density function f (x) = e-λx , for x ≥ 0.
• B) models the time between randomly occurring events.
• C) has an expected value λ.
• D) is described by the familiar bell-shaped curve.

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Definitions:

Useful Life

The estimated time period a fixed asset is expected to be usefully productive for a business.

Deferred Revenues

Income received by a company for goods or services not yet delivered or rendered, recorded as a liability on the balance sheet until earned.

Adjusting Entry

At the close of an accounting cycle, adjusting entries are recorded in the journal to apportion revenues and expenses to the time frame in which they were truly incurred.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or wear and tear.