An Automobile Dealer Wants to See If There Is a Relationship

question 63

Essay

An automobile dealer wants to see if there is a relationship between monthly sales and the interest rate.A random sample of 4 months was taken.The results of the sample are presented below.The estimated least squares regression equation is



= 75.061 - 6.254X

a.Obtain a measure of how well the estimated regression line fits the data.
b.You want to test to see if there is a significant relationship between the interest rate and monthly sales at the 1% level of significance.State the null and alternative hypotheses.
c.At 99% confidence,test the hypotheses.
d.Construct a 99% confidence interval for the average monthly sales for all months with a 10% interest rate.
e.Construct a 99% confidence interval for the monthly sales of one month with a 10% interest rate.

Identify the revenue recognition principle and its impact on financial reporting.

Understand the purpose and types of interim financial statements.

Learn the role of contra accounts and adjusting entries related to depreciation, prepaid expenses, and unearned revenues.

Understand the concept and importance of the accrual basis of accounting versus the cash basis.