In the Durbin-Watson Test, If the Calculated D-Statistic Is Greater

question 70

Multiple Choice

In the Durbin-Watson test, if the calculated d-statistic is greater than the upper value of the d-statistic, then

• A) we do not reject H₀, which says the error terms are not autocorrelated.
• B) we do reject H₀, which says the error terms are not autocorrelated.
• C) the test is inconclusive.
• D) we do reject H₀, which says the error terms are positively or negatively autocorrelated.

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Definitions:

Revenue

The aggregate revenue from selling goods or services, which constitute a firm's central business functions.

Expense Accounts

Accounts used to record the consumption of assets or services that result in a decrease in owner's equity, excluding the withdrawal of business assets by the owner.

Income Summary Account

A temporary accounting ledger that aggregates all income and expenses over a period to calculate net profit or loss.

Adjusting Entries

Bookkeeping entries recorded at the conclusion of an accounting cycle to apportion earnings and outlays to the appropriate period.