Adding a Time Trend Can Make an Explanatory Variable More

question 10

Multiple Choice

Adding a time trend can make an explanatory variable more significant if:

• A)the dependent and independent variables have similar kinds of trends, but movement in the independent variable about its trend line causes movement in the dependent variable away from its trend line.
• B)the dependent and independent variables have similar kinds of trends and movement in the independent variable about its trend line causes movement in the dependent variable towards its trend line.
• C)the dependent and independent variables have different kinds of trends and movement in the independent variable about its trend line causes movement in the dependent variable towards its trend line.
• D)the dependent and independent variables have different kinds of trends, but movement in the independent variable about its trend line causes movement in the dependent variable away from its trend line.

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Definitions:

Accounts Receivable

Accounts receivable represents the money owed to a company by its customers for goods or services that have been delivered or used, but not yet paid for.

Cost of Goods Sold

The direct expenses related to the production of goods sold by a company, including the cost of the materials and labor directly used to create the good.

Adjusting Entries

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Auditing Standards

These are established regulations and guidelines for the auditing process, ensuring that audits are performed ethically and uniformly.