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

question 63

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: 310 are current, 125 are late and 65 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:

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price.

Common Stock

Represents ownership shares in a corporation, giving holders a claim on part of the company’s assets and earnings.

Net Income

Total income of the company after expenses, taxes, and any other costs are deducted from its revenue.

Preferred Dividends

Dividends that are paid to preferred shareholders at a fixed rate before any dividends are paid to common shareholders.