A Sample of 1,400 American Households Was Asked If They

question 10

Multiple Choice

A sample of 1,400 American households was asked if they planned to buy a new car next year.Of the respondents,34% indicated they planned to buy a new car next year.Construct a 90% confidence interval of the proportion of American households who expect to buy a new car next year.

• A) [0.3152,0.3648]
• B) [0.3191,0.3609]
• C) [0.3394,0.3406]
• D) [0.3354,0.3446]

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Definitions:

Allowance Method

A technique in accounting to estimate and deduct bad debts from accounts receivable based on historical data and projections.

Uncollectible Accounts

Accounts receivable that a company has determined it will not be able to collect due to customer default.

Direct Write-off

A method of accounting for bad debts where uncollectible accounts receivable are directly written off against income at the time they are deemed uncollectible.

Bad Debts Recovered

When an account receivable has been written off and is recovered, this account, which is in the Other Revenue category, is credited in the direct write-off method if the recovery is in a year following the write-off.