Subject Code – HNDA1202

First Year – 2nd Semester

Higher National Diploma in Accountancy

 Full Time
 Lectures - 04 hours per week
 Tutorials - 04 hours per week
 Part time
 Lectures - 04 hours per week
Marks for continuous assessment 30%
Final assessment 70%
Total 100%
 Pro. Jayatissa, Statistics I, II, III
 Karunarathe K. R. M. T Statistics (Principals)
 Karunarathe K. R. M. T Statistics (Probability)
1. Introduction to Statistics 01 hr
ixLHdkh ye¢kaùu
2. Collecting & Grouping numerical data 06 hr
ixLHd;aul o;a; tla/ia lsÍu yd
1. Methods of data collection ^o;a; tla/ia lsÍfï l%u&
2. Introduction to sampling techniques ^ksheÈ lsÍfï
l%ufõo&
3. Histogram ^cd, f¾Lh $ ixLHd; m%ia:dr&
4. Ogives ^ ´.súh $ iuqÉÑ; ixLHd; pl%h &
5. Frequency curves
6. Lorenz curves
3. Measures of central tendency (for un-graphed
and for graphed data) 06 hr
1. Simple arithmetic mean
2. Median
3. Mode
4. Geometric mean
5. Harmonic mean
6. Weighted mean
4. Measures of dispersion (for un-graphed and for
graphed data) 05 hr
1. Absolute dispersion
2. Range
3. Quartiles deciles and percentiles
4. Inter quartiles ranger
5. Range of percentiles
6. Mean deviation
7. Variance and standard deviation
5. Relative Dispersion 02 hr
1. Co-efficient of variation
2. Co-efficient of mean deviation
3. Co-efficient of quartile deviation
6. Skewness 01 hr
1. Introduction
2. Positive skewness
3. Negative skewness
7. Regression Analysis 03 hr
1. Introduction
2. Scatter diagram
3. Line of the best
4. The regression line of Y on X,Y=a+bx
8. Correlation Analysis 04 hr
1. introduction
2. Positive correlation
3. Negative correlation
4. Co-efficient of linear correlation
5. Co-efficient of rank correlation
8. Analysis of time series 04 hr
1. Introduction
2. Component of time series
▪ Long term trend
▪ Cyclical movement
▪ Seasonal variation
▪ Random / irregular movements
3. Measure of long term trend
8. Free hand method
9. Semi-average method
10. Moving average method
10. Index Numbers 04 hr
1. Introduction
2. Relative
3. Price, quantity and value
4. Average of price relatives
5. Average of value relatives
6. Simple value index
7. Laspeyre index
8. Paasche index
11. Probability Distribution 08 hr
1. The binomial distribution
2. The normal distribution
3. The poisson distribution
4. The chi-square distribution
5. Students “t” distribution
12. Sampling theory 04 hr
1. Population and sample
2. Population parameters
3. Sampling distribution
4. The simple mean
5. Sampling distribution of means
6. Sampling distribution of proportions
13. Estimation Theory 04 hr
1. Estimates
2. Confidence interval estimate of population
parameters
3. Confidence intervals for means
4. Confidence intervals for proportions
14. Test of hypotheses and significance 06 hr
1. Statistical Hypotheses
2. Test of Hypotheses and significance
3. Type 1 and Type 2 errors
4. One tailed and two tailed test
5. Test of significance for large samples
6. Test of significant for small samples
15. Statistical Quality control 04 hr
1. Control problems
2. Concept of statistical control
3. Statistical nature of production process
4. Control chart tolerance limits, mean and range
charts
 Statistics is the study of the collection,
analysis, interpretation, presentation, and
organization of data.
 “Statistics is a way to get information from”
 Statistics is a tool for creating new
understanding from a set of numbers.
 The science that deals with the collection,
classification, analysis, and interpretation of
numerical facts or data, and that, by use of
mathematical theories of probability, imposes
order and regularity on aggregates of more or
less disparate elements
 Statistics

Data Information

Data: Facts, Information:

especially Knowledge
numerical facts, communicated
collected together concerning some
for reference or particular fact.
information.
 Whether forecast
Computer model are build using statistics
that compare with current whether to credit
future whether
 Quality Testing
Company uses statistics to test just few called
a shape of what they make
 Stock Market
Stock analysis also use statical computer
model to forecast what is happening in the
evening
Two areas of statistics:
 Descriptive Statistics ^úia;rd;aul ixLHdkh&
collection, presentation, and description of
sample data.
 Inferential Statistics ^wkqñ;l ixLHdkh&
making decisions and drawing conclusions
about populations
Descriptive Statistics

Descriptive statistics, which summarizes data

from a sample using indexes such as the mean or
standard deviation.
 Describing data with tables and graphs
(quantitative or categorical variables)
 Numerical descriptions of center, variability,
position (quantitative variables)
 Bivariate descriptions (In practice, most studies
have several variables)
 Describing data with tables and graphs
(quantitative or categorical variables)

 Numerical descriptions of center, variability,

position (quantitative variables)

 Bivariate descriptions (In practice, most studies

have several variables)
 inferential statistics, which draws conclusions
from data that are subject to random
variation (e.g., observational errors, sampling
variation).
Population
 a population is the group of all items of
interest to a statistics practitioner.
 A collection, or set, of individuals or objects
or events whose properties are to be
analyzed
 frequently very large; sometimes infinite.
 Example
 All 5 million Florida voters, per Example 12.5

1.27
Sample
 A subset of the population or A sample is a set of
data drawn from the population.
 Potentially very large, but less than the
population.
Example
 a sample of 765 voters exit polled on election day.

1.28
Parameter
 A descriptive measure of a population.
Statistic
 A descriptive measure of a sample.
 Population
Samples

Subset

Statistic
Parameter
Populations have Parameters, Samples have Statistics.
 That describes a person, place, thing, or idea (each
individual element of a population or sample).
 The value of the variable can "vary" from one entity to
another.
Example
 a person's hair color is a potential variable, which could have the
value of "blond" for one person and "brunette" for another.
 A variable that categorizes or describes an element of a
population.
 Qualitative variables take on values that are names or
labels.
 The color of a ball (e.g., red, green, blue) would be
example of qualitative or categorical variable.

Note
Arithmetic operations, such as addition and averaging, are not
meaningful for data resulting from a qualitative variable.
 A variable that quantifies an element of a
population.
 Quantitative variables are numeric.
 They represent a measurable quantity.
Example
 when we speak of the population of a city, we are
talking about the number of people in the city - a
measurable attribute of the city. Therefore,
population would be a quantitative variable.
Note
Arithmetic operations such as addition and averaging, are meaningful
for data resulting from a quantitative variable.
 Discrete data can only take specific numerical
value
Example
 Number of employees in the particular company
 Number of student in the class
 Continuous data can take any numerical
value
Example
 Weight of student in the Accountancy Course
 Height of Student in ATI - Badulla
Some examples will clarify the difference between
discrete and continuous variables.

 Suppose the fire department mandates that all

fire fighters must weigh between 150 and 250
pounds. The weight of a fire fighter would be an
example of a continuous variable; since a fire
fighter's weight could take on any value
between 150 and 250 pounds.
 Suppose we flip a coin and count the number
of heads. The number of heads could be any
integer value between 0 and plus infinity.
However, it could not be any number between
0 and plus infinity. We could not, for example,
get 2.3 heads. Therefore, the number of heads
must be a discrete variable.
 Nominal Variable:
A qualitative variable that categorizes (or
describes, or names) an element of a
population.

 Ordinal Variable:
A qualitative variable that incorporates an
order
Which of the following statements are true?
i. All variables can be classified as
quantitative or categorical variables.
ii. Categorical variables can be continuous
variables.
iii. Quantitative variables can be discrete
variables.
(A) i only (B) ii only (C) iii only
(D) i and ii (E) i and iii
Decide what type of data each of the following
would given
1. Mass of an object
2. favorite cricket team
3. Price of pencil
4. Distance from home to ATI
5. Day of week
 Data is collection of facts such as values or
measurement.
 It can be numbers, words, measurement,
observation or even just description of things
 The data would be the set of values in the
sample.
The Director, ATI Badulla is interested in learning about the
average age of Courses. Identify the basic terms in this situation.

 The population is the age of all Course members at the ATI

Badulla.
 A sample is any subset of that population. For example, we
might select 10 Course members and determine their age.
 The variable is the “age” of each faculty member.
 One data would be the age of a specific course member.
Identify each of the following examples as attribute (qualitative) or
numerical (quantitative) variables.

1. The residence hall for each student in a Dharmadutha college. (At

2. The amount of gasoline pumped by the next 10 customers at
the local Unimart. (Numerical)
3. The amount of radon in the basement of each of 25 homes in a
new development. (Numerical)
4. The color of the baseball cap worn by each of 20 students.
(Attribute)
5. The length of time to complete a mathematics homework
assignment. (Numerical)
6. The state in which each truck is registered when stopped and
inspected at a weigh station. (Attribute)
Example: Identify each of the following as examples of
qualitative or numerical variables:
1. The temperature in Barrow, Alaska at 12:00 pm on any
given day.
2. The make of automobile driven by each faculty member.
3. Whether or not a 6 volt lantern battery is defective.
4. The weight of a lead pencil.
5. The length of time billed for a long distance telephone
call.
6. The brand of cereal children eat for breakfast.
7. The type of book taken out of the library by an adult.
Example: Identify each of the following as examples of (1)
nominal, (2) ordinal, (3) discrete, or (4) continuous variables:
1. The length of time until a pain reliever begins to work.
2. The number of chocolate chips in a cookie.
3. The number of colors used in a statistics textbook.
4. The brand of refrigerator in a home.
5. The overall satisfaction rating of a new car.
6. The number of files on a computer’s hard disk.
7. The pH level of the water in a swimming pool.
8. The number of staples in a stapler.
 First problem a statistician faces: how to
obtain the data.
 It is important to obtain good, or
representative, data.
 Inferences are made based on statistics
obtained from the data.
 Inferences can only be as good as the data.
Data can be collected in many ways. The simplest
way is direct observation.
 iDcq ksßlaIKh ^direct observation &
 iïuqL idlÉPd ^interviews &
 ;eme,a ud¾.sl m%Yak m;% $ m%Yakud,d
uÕska ^questionnaires&
 ÿrl:kfhka ^telephone conversation &
 wka;¾cd,fhka ^Internet &
 Experiments, and
 Surveys.
 A survey solicits information from people.
Example
pre-election polls; marketing surveys.

The Response Rate (i.e. the proportion of all people

selected who complete the survey) is a key survey
parameter.
 Surveys may be administered in a variety of
ways,
Example
 Personal Interview,
 Telephone Interview, and
 Self-Administered Questionnaire.
 Over the years, a lot of thought has been put
into the science of the design of survey
questions. Key design principles:
Biased Sampling Method: A sampling method that produces
data which systematically differs from the sampled population.
An unbiased sampling method is one that is not biased.

Sampling methods that often result in biased samples:

1. Convenience sample: sample selected from elements of a
population that are easily accessible.
2. Volunteer sample: sample collected from those elements
of the population which chose to contribute the needed
information on their own initiative.
Process of data collection:

1. Define the objectives of the survey or experiment.

Example: Estimate the average life of an electronic component.
2. Define the variable and population of interest.
Example: Length of time for anesthesia to wear off after surgery.
3. Defining the data-collection and data-measuring schemes. This
includes sampling procedures, sample size, and the data-
measuring device (questionnaire, scale, ruler, etc.).
4. Determine the appropriate descriptive or inferential data-
analysis techniques.
Methods used to collect data:

Experiment: The investigator controls or modifies the

environment and observes the effect on the variable under
study.

Survey: Data are obtained by sampling some of the

population of interest. The investigator does not modify the
environment.

Census: A 100% survey. Every element of the population is

listed. Seldom used: difficult and time-consuming to
compile, and expensive.
Sampling Frame: A list of the elements belonging to the
population from which the sample will be drawn.

Note: It is important that the sampling frame be

representative of the population.

Sample Design: The process of selecting sample elements

from the sampling frame.

Note: There are many different types of sample designs.

Usually they all fit into two categories: judgment samples
and probability samples.
Judgment Samples: Samples that are selected on the basis
of being “typical.”

Items are selected that are representative of the population.

The validity of the results from a judgment sample reflects
the soundness of the collector’s judgment.

Probability Samples: Samples in which the elements to be

selected are drawn on the basis of probability. Each element
in a population has a certain probability of being selected as
part of the sample.
Random Samples: A sample selected in such a way that
every element in the population has a equal probability of
being chosen. Equivalently, all samples of size n have an
equal chance of being selected. Random samples are
obtained either by sampling with replacement from a finite
population or by sampling without replacement from an
infinite population.
Note:
1. Inherent in the concept of randomness: the next result (or occurrence) is not
predictable.
2. Proper procedure for selecting a random sample: use a random number
generator or a table of random numbers.
Example: An employer is interested in the time it takes each
employee to commute to work each morning. A random
sample of 35 employees will be selected and their
commuting time will be recorded.

There are 2712 employees.

Each employee is numbered: 0001, 0002, 0003, etc. up to
2712.
Using four-digit random numbers, a sample is identified:
1315, 0987, 1125, etc.
Systematic Sample: A sample in which every kth item of the
sampling frame is selected, starting from the first element
which is randomly selected from the first k elements.

Note: The systematic technique is easy to execute. However,

it has some inherent dangers when the sampling frame is
repetitive or cyclical in nature. In these situations the results
may not approximate a simple random sample.

Stratified Random Sample: A sample obtained by

stratifying the sampling frame and then selecting a fixed
number of items from each of the strata by means of a
simple random sampling technique.
Proportional Sample (or Quota Sample): A sample
obtained by stratifying the sampling frame and then
selecting a number of items in proportion to the size of the
strata (or by quota) from each strata by means of a simple
random sampling technique.

Cluster Sample: A sample obtained by stratifying the

sampling frame and then selecting some or all of the items
from some of, but not all, the strata.
Probability: Properties of the population are
assumed known. Answer questions about the
sample based on these properties.

Statistics: Use information in the sample to

draw a conclusion about the population.
Example: A jar of M&M’s contains 100 candy pieces, 15 are
red. A handful of 10 is selected.

Probability question: What is the probability that 3 of the 10

selected are red?

Example: A handful of 10 M&M’s is selected from a jar

containing 1000 candy pieces. Three M&M’s in the handful
are red.

Statistics question: What is the proportion of red M&M’s in

the entire jar?
Distribution - (of a variable) tells us what values the variable takes and how often it
takes these values.
• Unimodal - having a single peak
• Bimodal - having two distinct peaks
• Symmetric - left and right half are mirror images.