The record of a corporation shows that, on average, accounts payable are $125.32. An auditor checked...

The record of a corporation shows that, on average, accounts payable are $125.32. An auditor checked a random sample of 16 of these accounts. The sample mean and standard deviation were found to be $131.78 and $15.41 respectively. The population distribution is normal. Is there evidence that the mean amount of all accounts payable in the corporation is differentfrom the record of $125.32?

a.Write down the null and alternative hypotheses in this test.

b.What is the appropriate test probability distribution? Give the required condition(s) for using this distribution.

c.At 5% significance level, state the decision rule for the auditor to test the hypotheses.

d.Compute thevalue of the test statistic.

e.Based on the decision rule in part (c)only, what is the statistical decision?

f.Provide a conclusion about the amount of the accounts payableto the auditor.

Expert Solution

orchestra answered 2 years ago

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Suggestions on the management of accounts payable

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