With an 80 Percent Chance of Continuing a Lost-For-Good Relationship

question 50

Multiple Choice

With an 80 percent chance of continuing a lost-for-good relationship each year,the probability of holding the account through the sixth year is:

• A) 0.001
• B) 0.2621
• C) 0.0209
• D) 0.1333
• E) 0.80

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Definitions:

Accounting Entity

An economic unit with clearly defined boundaries for which financial transactions are recorded, separate from its owners or other business units.

Capital Credit

Refers to the allocation or distribution of a cooperative's net income back to its members based on their proportionate contribution or usage, often in the utility or service sector.

Partners' Capital Statement

A financial document that shows the changes in the equity of each partner in the business over a period of time.

Capital Account Balances

The financial records that show the contributions, withdrawals, and ownership interest of investors in a company.