A Correlation Does Not Indicate That One Variable Causes the Other

question 101

Multiple Choice

A correlation does not indicate that one variable causes the other to occur; rather, it indicates that there is a _____ between the two variables.

• A) proof
• B) validity
• C) reliability
• D) relationship

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Definitions:

Merchandise Purchases

Transactions involved in buying goods for resale in the normal course of business, typically constituting a significant expense for retail companies.

Physical Inventory

Physical Inventory involves a manual count of all physical goods a company has in stock at a specific point in time to ensure accuracy of inventory records.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period of time, resulting in a net profit or loss.

Ending Inventory

The value of goods that a company has in stock at the end of its fiscal year, calculated as the beginning inventory plus purchases minus the cost of goods sold.