You Want to Sell Your House, and You Decide to Obtain

question 21

Multiple Choice

You want to sell your house, and you decide to obtain an appraisal on it. Looking at past data, you discover that actual prices obtained for houses and the appraisals given for them prior to their sale were as follows:                       $\text { Actual Selling Price }$
$\begin{array}{|c|c|c|c|}\hline \text { Appraisal }&\text { Up to } \$ 500,000 & \$ 500,001 \text { or more } & \text { Row Tot } \\\hline \text { Up to \$ 500,000 }&21 & 9 &30\\\hline \text { \$ 500,001 or more}&14 & 6 &20\\\hline \text { Col Tot }&35 & 15 &50\\\hline\end{array}$ Based on these data we can say that:

• A)no conclusion is possible without knowing ?.
• B)appraisal and actual price are not independent at ? = .05.
• C)appraisal and actual price are independent at any ?.
• D)the degrees of freedom are insufficient for a decision.

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Definitions:

Direct Write-Off Method

An accounting procedure where uncollectible accounts receivable are directly written off against income at the time they are deemed noncollectible.

Noncurrent Asset

Assets intended for use over a long term, such as property, plant, and equipment, that are not expected to be converted into cash within a year.

Direct Write-Off Method

The direct write-off method is an accounting practice of charging unpaid debts directly to expense when they are deemed uncollectible, bypassing the allowance for doubtful accounts.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are collected, or turned over, during a reporting period.