Exhibit 13-8

question 13

Multiple Choice

Exhibit 13-8.Among the considerations for assessing the utility of a correlation are: absolute size and predictive validity, comparisons to other correlations, and statistical significance.Choose the appropriate consideration to answer each of the following questions.
-Refer to Exhibit 13-8.Which of these assesses the likelihood that the observed correlation is a function of chance?

• A) absolute size and predictive validity
• B) comparisons to other correlations
• C) statistical significance

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Definitions:

Permanent Account

An account that is not closed at the end of the accounting period and whose balances are carried forward into the next period.

Allowance for Doubtful Accounts

An accounting method used to estimate the portion of accounts receivable that is expected not to be collected.

Net Realizable Value

The amount (Accounts Receivable – Allowance for Doubtful Accounts) that is expected to be collected.

Gross Accounts Receivable

The total amount owed to a company by its customers for goods or services delivered on credit before any deductions for returns or bad debts.