An accountant believes that the percentage of accounts that will be uncollectible increases as the ages of the accounts increase. Here the age of an unpaid account is the number of days elapsed since the invoice date. To test this theory, the accountant randomly selects independent samples of 500 accounts with ages between 31 & 60 days and 500 accounts with ages between 61 & 90 days from the accounts receivable ledger dated one year ago. When the sampled accounts are examined, it is found that 10 of the 500 accounts with ages between 31 & 60 days were eventually classified as "uncollectible", while
An accountant believes that the percentage of accounts that will be uncollectible increases as the ages of the accounts increase. Here the age of an unpaid account is the number of days elapsed since the invoice date. To test this theory, the accountant randomly selects independent samples of 500 accounts with ages between 31 & 60 days and 500 accounts with ages between 61 & 90 days from the accounts receivable ledger dated one year ago. When the sampled accounts are examined, it is found that 10 of the 500 accounts with ages between 31 & 60 days were eventually classified as
"uncollectible", while 27 of the 500 accounts with ages between 61 & 90 days were eventually classified as
"uncollectible". Let pi = proportion of accounts with ages between 31 & 60 days and p2 = proportion of accounts with
ages between 61 & 90 days.
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