Financial Accounting / [Ref.acc.660.gc.1014]

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General Information

APA Reference Style (How to Avoid Plagiarism)

Week 1 (Chapters 1, 2 and 3) - Financial Accounting Standards, Conceptual Framework and the Accounting Information System

Week 2 (Chapters 4 and 5 ) - The Income Statement, The Balance Sheet and Statement of Cash Flows

Week 3 (Chapters 6 and 7) - Time Value of Money, Cash and Receivables

Capital Budgeting (These are really for a Finance course but they illustrate the use of PV or NPV)

Week 4 (Chapters 8 and 9) - Inventory

Week 5 (Chapters 10, 11 & 12) - Property, Plant and Equipment

Week 6 (Chapters 13 and 14 ) - Current Liabilities, Contingencies and Long-Term Liabilities

Week 7 (Chapters 15 and 16) - Stockholders' Equity

Week (Chapter 23) - Statement of Cash Flows

Submit a 1- to 2-page paper that addresses the following:
Assume you are working at the Consumer Protection Agency. Recently, you have been getting complaints about the highway gas mileage of a new minivan. The car company agrees to allow you to select randomly 41 of its new minivans to test their highway mileage. The company claims that its minivans get 28 miles per gallon on the highway. Your test results show a sample mean of 26.7 and a sample standard deviation of 4.2.
Part 1 (Confidence Interval):
  • Calculate a 95% confidence interval around your sample mean.
  • Is the claimed mean inside your confidence interval?
  • What does your result mean, in terms of the company's claim?
Part 2 (Two-tail test):
  • List the null and alternative hypotheses for the appropriate test.
  • Use alpha = 0.05. Find the critical value(s) and calculate the observed value of the test statistic.
  • Is the observed test statistic in the critical (rejection) region?
  • Will the p-value be higher or lower than your alpha? What does this result mean, in terms of the company's claim?
Part 3 (One-tail test):
  • List the null and alternative hypotheses for the test.
  • Use alpha = 0.05.
  • Find the critical value and calculate the observed value of the test statistic.
  • Is the observed test statistic in the critical region?
  • Will the p-value be higher or lower than your alpha?
  • What does this result mean, in terms of the company's claim?
Part 4 (Conclusion):
  • What conclusions did you reach?
  • What did you learn from each method of checking the claim for means?
  • Were there important differences between methods? Which method would you prefer?
  • Which carries a higher risk of a type I error?
  • Based on this experience, why do you think it’s important to decide on the method before conducting the test?
  • Based on your results, do you support the company's claim?
  • What action, if any, should the company take?