Which of the Following Statements Is an Example of Confusing

question 21

Multiple Choice

Which of the following statements is an example of confusing association and causation?

• A) Senator Jones believes that more tax revenue should be distributed to the poor.
• B) A map includes roads, but not every restaurant, telephone pole, and
• C) Interest rates rise when it rains, all other factors constant.
• D) When the price of Coca-Cola increases, consumers buy more Pepsi, all other factors constant.

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Definitions:

Receivable

An amount of money owed to a business by its customers or clients for goods or services delivered or used but not yet paid for.

Allowance for Doubtful Accounts

A contra-asset account that reduces accounts receivable to its net realizable value, representing estimated uncollectible amounts.

Liability Account

An accounting record that tracks the money owed by a business to creditors, lenders, and suppliers, part of the company's liabilities.

Direct Write-Off Method

This accounting practice writes off bad debts directly against income at the time they are determined to be uncollectible, bypassing any allowance account.