Think about a situation where you have a test for a virus. First, you are tested positive or negative. Second, you either really do have the virus or you don't
a. If you actually have the virus but the test did not catch it, which error has been made and what is the impact of that error?
b. If you actually don't have the virus but the test says you did, which error is being made and what is the impact of this error?
c. Which error is the worst one to commit in this situation and why?
a. A Type II error has been committed, which is a very costly error. You are being told you are OK when you really have the virus, and you are going untreated.
b. This is a false alarm, and a Type I error. A Type I error causes undue worry on behalf of the person taking the test, and could cause some treatments to occur that shouldn't.
c. With a Type II error you are letting people with the virus go unnoticed, and hence untreated. With a Type I error you falsely tell them they have the virus. This can cause undue worry but it is certainly not as bad of a problem as letting someone go on not knowing they have the virus. A Type II error is the worst in this situation.
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Historical costs include all of the following except:
a. acquisition costs for assets b. net realizable values for assets. c. adjusted acquisition costs for assets. d. initial present value for assets and liabilities
In the 21st century, digital consumer activism has enabled consumers to ________
A) return to print media as a primary information source B) complain to federal consumer protection agencies C) pursue corrupt CEOs who have cheated them D) make better decisions and more quickly resolve problems
Which of the following statements could most likely create an express warranty?
A)"This is the best car available in town." B)"This motorcycle will double in value in the next ten years." C)"These tires have 10,000 miles on them." D)"This antique is quite a bargain."
Krause Corporation makes an S election, believing that it has no current or accumulated E&P. However, after an IRS audit, Krause is found to have failed the passive investment income test for three consecutive years and also to have a Subchapter C E&P balance from its three pre-election tax years. The IRS will
A) automatically terminate the election and Krause cannot reelect for a 5-year time period. B) retroactively revoke the election to the first day on which it was effective and Krause will not be able to reelect. C) treat the error as such and allow the election to continue unbroken. D) likely treat the termination as inadvertent and will probably approve a continued S election if the corporation distributes the Subchapter C E&P.