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Recent audits revealed that BanqueCard, a credit service, has erred in

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Recent audits revealed that BanqueCard, a credit service, has erred in  [#permalink]

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New post 27 Dec 2018, 12:11
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  25% (medium)

Question Stats:

84% (01:32) correct 16% (02:02) wrong based on 37 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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Re: Recent audits revealed that BanqueCard, a credit service, has erred in  [#permalink]

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New post 27 Dec 2018, 12:25
Imo C

It shows the flaw in the reasoning of the accountant as the accountant just states the number of people over and under being same, the accountant does not see that the amount charged over could be more than the total money charged to people under


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

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Re: Recent audits revealed that BanqueCard, a credit service, has erred in &nbs [#permalink] 27 Dec 2018, 12:25
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