SOLUTION: An auditor wants to test the claim that the average A/R balance is $755. A random sample of 49 accounts is examined and found to have a mean of $730 and a standard deviation of $5
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Question 929863: An auditor wants to test the claim that the average A/R balance is $755. A random sample of 49 accounts is examined and found to have a mean of $730 and a standard deviation of $58. Should the auditors claim be accepted or rejected
• At the 5% significance level?
• At the 1% significance level?
Answer by ewatrrr(24785) (Show Source): You can put this solution on YOUR website!
Ho: u = 755 (claim)
Ha: u ≠ 755
......
Sample: n = 49
phat = 730, sd = 58
.......
test statistic = = -15/(58/sqrt(49) = -1.81
P(z < -1.81) = .035
.......
At the 5% significance level:
.035 < .05, reject claim
.......
At the 1% significance level
.035 > .01, do not reject claim,
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