One Reason Why It Is Incorrect to Infer a Causal

question 156

Multiple Choice

One reason why it is incorrect to infer a causal relationship from a correlational claim is

• A) causal claims can only be made with positive correlations.
• B) the cause of the relationship may be due to a hidden variable.
• C) the lack of a control group.
• D) our intuition helps us determine if a cause-effect relationship exists.

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Definitions:

Direct Write-off

A method of accounting for bad debts where uncollectible accounts receivable are written off directly against income at the time they are deemed nonrecoverable.

Allowance Methods

Accounting techniques used to anticipate and account for future loan losses by establishing an allowance for doubtful accounts.

Bad Debt

Money owed to a company that is unlikely to be paid by the debtor, often leading to the creditor writing it off as a loss.

Percentage of Sales

A method used to forecast financial figures, such as net income or expenses, based on a percentage of the sales volume.