Probability Proportionate to Size Sampling _______

question 52

Multiple Choice

Probability proportionate to size sampling _______.

• A)should only be used in substantive testing of transactions
• B)should only be used in substantive testing of balances
• C)should not be used for substantive testing of transactions and balances
• D)can be used for substantive testing of transactions and balances

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Definitions:

Code Sections 1245

Refers to a section of the U.S. Internal Revenue Code that deals with the recapture of depreciation upon the sale of certain types of business property.

Recapture Provisions

Regulations that allow the government to collect taxes on previously deducted or credited investment income when certain assets are sold or disposed of.

Real Property

Land and anything permanently attached to the land, like buildings, is considered real property.

Capital Asset

A Capital Asset is a significant piece of property such as investments, real estate, and personal items that is not easily sold in the regular course of a business's operations.