A Random Sample of 2,000 Individuals from Three Different Cities

question 4

Essay

A random sample of 2,000 individuals from three different cities was asked whether they owned a foreign or a domestic car. The following contingency table shows the results of the survey.
​ $$\begin{array}{l}\begin{array} { c | c c c | c } &&\text { City }\\\text { Type of Car } & \text { Detroit } & \text { Atlanta } & \text { Denver } & \text { Total } \\\hline \text { Domestic } & 80 & 200 & 520 & 800 \\\text { Foreign } & 120 & 600 & 480 & 1,200 \\\hline \text { Total } & 200 & 800 & 1,000 & 2,000\end{array}\end{array}$$ At α = .05, test to determine if the type of car purchased is independent of the city in which the purchasers live.

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Definitions:

Purchases Discount

An accounting reduction in the price paid for goods or services if payment is made within a specified period.

Unearned Revenue

A liability account that records amount owed for goods or services in advance of delivery. The Cash account would record the receipt of cash.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.

Service Income

Income earned from the provision of services to clients or customers.