Refer to the Following:
a Consulting Firm Estimates the Following $Q _ { t } = a + b t + c D$

question 59

Multiple Choice

Refer to the following:
A consulting firm estimates the following quarterly sales forecasting model:
$Q _ { t } = a + b t + c D$
The equation is estimated using quarterly data from 2003I-2013III (t = 1,..., 43) . The variable D is a dummy variable for the second quarter where:
D = 1 in the second quarter, and 0 otherwise.
The results of the estimation are:
$\begin{array}{rllll}\text { DEPENDENT VARIABLE: } & \text { QT } & \text { R-SQUARE } & \text { F-RATIO } & \text { P-VALUE ONF } \\\text { OBSERVATIONS: } & 43 & 0.8644 & 127.5 & 0.0001\\\\\text { VARIABLE } & \text { PARAMETER } & \text { STANDARD } & \\&\text { ESTIMATE } & \text { ERROR } & \text { T-RATIO } & \text { P-VALUE } \\\text { INTERCEPT } & 22.5 & 9.32 & 2.41 & 0.0201 \\\text { T } & 1.86 & 0.55 & 3.38 & 0.0016 \\\text { D } & 2.0 & 0.71 & 2.82 & 0.0075\end{array}$
-At the 1 percent level of significance, is there a statistically significant trend in sales?

• A) No, since 1.86 < 2.704
• B) No, since 0.55 < 1.86
• C) No, since 1.02 < 2.704
• D) Yes, since 1.86 > 0.55
• E) Yes, since 3.38 > 2.704

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Definitions:

Accounts Receivable

Money owed to a company by customers for products or services that have been delivered or used, but not yet paid for.

Long-term Liabilities

Debts or obligations that are due beyond the next twelve months.

Correcting Entries

Adjustments made in the accounting records to rectify mistakes made in previous financial transactions or entries.

Post-closing Trial Balance

A list of all accounts and their balances after closing entries are made, used to verify the equality of debits and credits.