Which of the following statements is NOT true?
A)In selecting an independent variable for cost behaviour analysis, it is important to determine the activity that causes the cost being analyzed to occur.
B)Professional judgment is very important in selecting an activity measure for a particular cost.
C)A high correlation between two variables proves that one causes the other.
D)The least-squares cost estimation method can be used to measure the linear function.

Question

Quizplus · Accepted Answer

A high correlation between two variables does not necessarily prove that one variable causes the other. Correlation only indicates a relationship between the two variables, but causation requires additional evidence and analysis.

Which of the Following Statements Is NOT True