For each of the following situations write the principle, assumption, or concept that justifies or explains what occurred. 

1. A landscaper received a customer’s order and cash prepayment to install sod at a house that would not be ready for installation until March of next year. The owner should record the revenue from the customer order in March of next year, not in December of this year. 

1. A company divides its income statements into four quarters for the year. 

1. Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at $205,000. 

1. Brandy’s Flower Shop is forecasting its balance sheet for the next five years. 

For each of the following situations, state whether the parameter of interest is a mean or a proportion.

(a) A poll shows that 64% of Americans personally worry a great deal about federal spending and the budget deficit.

(b) A survey reports that local TV news has shown a 17% increase in revenue between 2009 and 2011 while newspaper revenues decreased by 6.4% during this time period.

(c) In a survey, high school and college students are asked whether or not they use geolocation services on thier smart phones.

(d) In a survey, smart phone users are asked whether or not they used a web-based taxi serivce.

(e) In a survey, smart phone users are asked how many times they used a web-based taxi service over the last year.

. For each of the following situations, identify the measure of central tendency (mean, median, or mode) that would provide the best description of the average score:

1. A news reporter interviewed people shopping in a local mall and asked how much they spent on summer vacations. Most people travelled locally and reported modest amounts but one couple had flown to Paris for a month and paid a small fortune.
2. A marketing researcher asked consumers to select their favorite from a set of four designs for a new product logo.
3. A driving instructor recorded the number of orange cones that each student ran over during the first attempt at parallel parking.

Q1. For each of the following situations, identify the sampling method used.

i. The manager of a company wants to conduct a satisfaction survey of the 10,000 employees. Each employee is assigned a number between 1 and 10,000. A computer program is used to generate random numbers between 1 and 10,000. The manager runs the program and selects 100 members for the survey.

ii. The same company has offices in 100 cities across the country. The manager of the company cannot travel to all offices to survey the employees so he randomly selects 30 offices. He then surveys all employees at each of the 30 offices.

Q2. A manufacturer of cabin bags advertises that on average, the mean weight of their bags is 2kg. The quality control division of the company do regular testing to ensure the weights on average are not more than 2kg.

i. Write down the null and alternative hypotheses to test this claim.

ii. Explain what it would mean to make a Type II error in this situation.

iii. Explain the possible consequences of a Type II error when the test was conducted by the quality control division of the company.

iv. Explain the possible consequences of a Type II error if the test was conducted by a consumer advocacy group external to the company.

For each of the following situations, state the independent variable and the dependent variable.

a. A study is done to determine if elderly drivers are involved in more motor vehicle fatalities than other drivers. The number of fatalities per 100,000 drivers is compared to the age of drivers.

b. A study is done to determine if the weekly grocery bill changes based on the number of family members.

c. Insurance companies base life insurance premiums partially on the age of the applicant.

d. Utility bills vary according to power consumption.

e. A study is done to determine if a higher education reduces the crime rate in a population.

For each of the following situations, identify the sampling method used.
i. The manager of a company wants to conduct a satisfaction survey of the 10,000 employees. Each employee is assigned a number between 1 and 10,000. A computer program is used to generate random numbers between 1 and 10,000. The manager runs the program and selects 100 members for the survey.
ii. The same company has offices in 100 cities across the country. The manager of the company cannot travel to all offices to survey the employees so he randomly selects 30 offices. He then surveys all employees at each of the 30 offices. 

For each of the following situations, explain why the combinations rule or the permutations rule should be used.

1. For each of the following situations, identify whether the appropriate test is a paired t-test (for parameter µd) or a two-sample t-test (for parameter µ1 – µ2). Briefly explain your answer.

Sixty students were matched by initial pulse rate, with the two with the highest pulse forming a pair, and so on. Within each pair, one student was randomly chosen to drink a caffeinated beverage, while the other one drank an equivalent amount of water. Their pulse rates were measured 10 minutes later, to test whether caffeine consumption elevates pulse rates.

To determine whether lack of sleep increases appetite, researchers recruited 50 volunteers and randomly assigned 25 of them to sleep at least 8 hours a night and the other 25 to sleep at most 5 hours a night, for 3 days. Calorie intake was recorded for all 50 volunteers for the 3-day period.

For each of the following situation, discuss with reason whether the company has to make provision in accordance to MFRS 137: Provisions, contingent liabilities and contingent assets.

i. Entity A operated in the palm oil manufacturing business. Under a new       legislation, the entity is required to fit smoke filters to its palm oil mills       by 30 June 2016. As at 31 December 2015, Entity A has not fitted the           smoke filters. The costs to fit the smoke filters are estimated at RM 4           million. As at 31 December 2016, Entity A still has not fitted the smoke      filters and therefore faces a probable fine or penalty by law.

ii. A company operates profitably from a factory that it has leased under          an operating lease. Annual lease rentals totaled RM 120000. During the      year ended 31 December 2015, the company relocates its operations to      a new factory. The lease on the old factory continues for the next four        years which is up to 31 December 2018, as it cannot be cancelled and          the factory cannot be re-let to another user.

For each of the following situations write the principle, assumption, or concept that justifies or explains what occurred.
A. A landscaper received a customers order and cash prepayment to install sod at a house that would not be ready for installation until March of next year. The owner should record the revenue from the customer order in March of next year, not in December of this year.
B. A company divides its income statements into four quarters for the year.
C. Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at $205,000.
D. Brandys Flower Shop is forecasting its balance sheet for the next five years.
E. When preparing financials for a company, the owner makes sure that the expense transactions are kept separate from expenses of the other company that he owns.
F. A company records the expenses incurred to generate the revenues reported.