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# Recent audits revealed that BanqueCard, a credit service,

Author Message
VP
Joined: 17 Jun 2008
Posts: 1204
Recent audits revealed that BanqueCard, a credit service,  [#permalink]

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02 Aug 2008, 11:29
1
1
00:00

Difficulty:

(N/A)

Question Stats:

92% (01:04) correct 8% (01:46) wrong based on 32 sessions

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Recent audits revealed that BanqueCard, a credit service, has erred in calculating the interest it charges its clients. But BanqueCard’s chief accountant reasoned that the profits that the company shows would remain unaffected by a revision of its clients’ credit statements to correct its previous billing errors, since just as many clients had been overcharged as undercharged.
Which of the following is a reasoning error that the accountant makes in concluding that correcting its clients’ statements would leave BanqueCard’s profits unaffected?

(A) Relying on the reputation of BanqueCard as a trustworthy credit service to maintain the company’s clientele after the error becomes widely known
(B) Failing to establish that BanqueCard charges the same rates of interest for all of its clients
(C) Overlooking the possibility that the amount by which BanqueCard’s clients had been overcharged might be greater than the amount by which they had been undercharged
(D) Assuming that the clients who had been overcharged by BanqueCard had not noticed the error in their credit bills
(E) Presupposing that each one of BanqueCard’s clients had either been overcharged or else had been undercharged by the billing error
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Manager
Joined: 28 Aug 2006
Posts: 126

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02 Aug 2008, 11:34
The reason C is suggesting is an error on chief accountant's part.

Ans -C
Director
Joined: 25 Oct 2006
Posts: 542

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02 Aug 2008, 11:48
1
IMO C

(A) Relying on the reputation of BanqueCard as a trustworthy credit service to maintain the company’s clientele after the error becomes widely known
--OOS
(B) Failing to establish that BanqueCard charges the same rates of interest for all of its clients
--rates are not mentioned.
(C) Overlooking the possibility that the amount by which BanqueCard’s clients had been overcharged might be greater than the amount by which they had been undercharged
-- if amount is more than expectation, profit can be hampered severely.
(D) Assuming that the clients who had been overcharged by BanqueCard had not noticed the error in their credit bills
-- nothing to state about noticing the amount
(E) Presupposing that each one of BanqueCard’s clients had either been overcharged or else had been undercharged by the billing error
-- stressing more on number of clients. Not necessarily they are equal. Quite provoking.
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VP
Joined: 17 Jun 2008
Posts: 1204

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02 Aug 2008, 19:27
priyankur_saha@ml.com wrote:
IMO C

(A) Relying on the reputation of BanqueCard as a trustworthy credit service to maintain the company’s clientele after the error becomes widely known
--OOS
(B) Failing to establish that BanqueCard charges the same rates of interest for all of its clients
--rates are not mentioned.
(C) Overlooking the possibility that the amount by which BanqueCard’s clients had been overcharged might be greater than the amount by which they had been undercharged
-- if amount is more than expectation, profit can be hampered severely.
(D) Assuming that the clients who had been overcharged by BanqueCard had not noticed the error in their credit bills
-- nothing to state about noticing the amount
(E) Presupposing that each one of BanqueCard’s clients had either been overcharged or else had been undercharged by the billing error
-- stressing more on number of clients. Not necessarily they are equal. Quite provoking.

Yes true
OA is C
I messed up marking (A)
Just the option which attacks any thing directly mentioned in the argument should be considered
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Its Now Or Never

Non-Human User
Joined: 01 Oct 2013
Posts: 3578
Re: Recent audits revealed that BanqueCard, a credit service,  [#permalink]

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27 Dec 2018, 09:35
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: Recent audits revealed that BanqueCard, a credit service, &nbs [#permalink] 27 Dec 2018, 09:35
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