In Constructing and Analyzing a Scatter Diagram, It Is Important

question 64

True/False

In constructing and analyzing a scatter diagram, it is important to focus on the data points of interest by establishing appropriate scales for both the x and y axes. Otherwise, a nonlinear relationship can appear to be linear.

---

Definitions:

Retained Earnings

The portion of net profits not distributed as dividends but retained by the company to reinvest in its core business or to pay debt.

Accounting Period

The time frame covered by the financial statements of a company, typically a fiscal year or quarter, used to calculate earnings and track financial performance.

Dividends Account

An account used to record the distribution of a portion of a company's earnings to its shareholders.

Revenue Accounts

Accounts that track the income a company generates from its normal business activities, typically from the sale of goods and services to customers.