An Accounting Firm Is Planning for the Next Tax Preparation

question 34

Multiple Choice

An accounting firm is planning for the next tax preparation season. From last year's returns, the firm collects a systematic random sample of 100 filings. The 100 filings showed an average preparation time of 90 minutes with a standard deviation of 140 minutes.
What is the probability that a sample mean would exceed 20 hours per week?

• A) 1.0
• B) 0.5
• C) 1.96
• D) Cannot be calculated based on the given information.
• E) None of the choices are correct

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Definitions:

Fair Value Adjustment

Fair Value Adjustment refers to an accounting action that adjusts the reported value of an asset or liability to reflect its current market value.

Trading Securities Portfolio

A collection of securities bought and held primarily for sale in the short term to generate income on short-term price differences.

Fair Value

The estimated price at which an asset can be bought or sold in an orderly transaction between market participants at the valuation date.

Unrealized Gain

An increase in the value of an asset that has not been sold, thus not yet generating actual profit.