Canadian Accounting Classifies Accounts Receivable as "Current", "Late", and "Not

question 45

Multiple Choice

Canadian Accounting classifies accounts receivable as "current", "late", and "not collectible".
Industry figures show that 60% of A/R are current, 30% are late, and 10% are uncollectible. A law
firm in Markham Ontario has 500 accounts receivable: 320 are current, 100 are late and 80 are not
Collectible. Are these numbers in agreement with the industry distribution?
Using the data from this Megastat printout, you determine:

• A) the Markham firm's data reflect the national average, when tested at the 0.10 level of significance.
• B) the Markham firm's data reflect the national average, when tested at the 0.05 level of significance.
• C) the Markham firm's data reflect the national average, when tested at the 0.01 level of significance.
• D) the Markham firm's data do not reflect the national average, when tested above a 0.01 level of significance.

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Definitions:

Weighted Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all goods available for sale.

Finished Goods

Items that have been fully produced but are still awaiting sale or distribution to buyers.

Weighted Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all units available for sale during the period.

Conversion Activities

Activities in manufacturing that convert raw materials into finished goods.