The Coefficient of Variation for a Set of Annual Incomes

question 104

Multiple Choice

The coefficient of variation for a set of annual incomes is 18%; the coefficient of variation for the length of service with the company is 29%. What does this indicate?

• A) More dispersion in the distribution of the incomes compared with the dispersion of their length of service
• B) More dispersion in the lengths of service compared with incomes
• C) Dispersion in the two distributions (income and service) cannot be compared using percents
• D) Dispersions are equal

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Definitions:

Accounting System

A systematic process of recording, summarizing, and reporting financial transactions of a business to ensure accurate financial statements.

Principles and Phases

Fundamental norms, rules, or values that guide business operations and decision-making, and the distinct stages through which a business cycle or project progresses.

Accounts Receivable Control

A system or process used to manage and monitor amounts owed to a business by its customers for goods or services provided on credit.

Subsidiary Accounts

Ledger accounts that provide detailed information supporting summary-level entries in the general ledger and control accounts.