If $15,000 Is Considered to Be Material to the Income

question 67

Multiple Choice

If $15,000 is considered to be material to the income statement,but $25,000 is material to the balance sheet,the auditor should set overall materiality at which of the following dollar amounts?

• A)$20,000
• B)$25,000
• C)$40,000
• D)$15,000

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Definitions:

Representative Sample

A subset of a population that accurately reflects the larger group, used to make inferences about the population's characteristics.

Population

All the cases in a group being studied, from which samples may be drawn. (Note: Except for national studies, this does not refer to a country’s whole population.)

Independent Variable

In an experiment, the variable that is manipulated by the researcher to observe its effect on the dependent variable.

Negatively Correlated

Describes a relationship between two variables in which one variable increases as the other decreases, and vice versa.