Many Stores Run "Secret Sales": Shoppers Receive Cards That Determine

question 39

Multiple Choice

Many stores run "secret sales": Shoppers receive cards that determine how large a discount they get,but the percentage is revealed by scratching off that black stuff only after the purchase has been totaled at the cash register.The store is required to reveal (in the fine print) the distribution of discounts available.Determine whether the following probability assignment is legitimate.
Probability of ...

• A)Legitimate
• B)Not legitimate

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Definitions:

Cash Basis

An accounting method where revenues and expenses are recognized when cash is received or paid, as opposed to when they are incurred.

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations and external investment sources.

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded by the end of the accounting period.