You Are Employed as a Commission-Based Sales Clerk for a Cosmetics

question 37

Multiple Choice

You are employed as a commission-based sales clerk for a cosmetics retail store. You know that, on average, exactly 50 percent of the customers that enter your store will make at least one purchase. Thus far this morning, you have waited on eight customers without making a single sale. You are convinced that the next customer you wait on will buy something. This belief is known as:

• A) aversion to ambiguity.
• B) the law of small numbers.
• C) anchoring and adjusting.
• D) gambler's fallacy.
• E) false consensus.

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Definitions:

Working Capital

A financial metric representing the operational liquidity available to a business, calculated as current assets minus current liabilities.

Current Ratio

A liquidity ratio measuring a company's ability to pay short-term obligations, calculated as current assets divided by current liabilities.

Acid-Test Ratio

A financial metric used to determine a company's short-term liquidity, calculating its ability to pay off short-term obligations without selling inventory.

Accounts Receivable Turnover

A financial metric that measures how effectively a company collects its receivables, calculated as net credit sales divided by the average accounts receivable.