Define the goodness of fit test. How is it applied in accounting?

      

Define the goodness of fit test. How is it applied in accounting?

  

Answers


Wilfred
Goodness of fit test is a test on how well empirical distribution(obtained from sample data) can fit theoretical distribution (like normal, Poisson or binomial distributions) using the ?2 test. Accountants can use it to determine whether a given age-debtors distribution can be approximated by a given function. Also while forecasting past data or surveyed data can be compared with assumed distribution to come up with a conclusion that the distribution function represents the forecast Accountants can also come up with appropriate wage/salary given that a certain distribution exists between staff turnover and salary/wages
Wilfykil answered the question on February 20, 2019 at 08:38


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