When Monetary-Unit Sampling Is Used to Audit Accounts Receivable, a Customer's

question 139

True/False

When monetary-unit sampling is used to audit accounts receivable, a customer's account with a small year-end balance has the same chance of being included in the sample as a customer's account with a large year-end balance.

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Definitions:

Marginal Benefit

The extra pleasure or benefit obtained from consuming an additional unit of a product or service.

Marginal Cost

Marginal cost is the increase in total cost that arises from producing one additional unit of a product or service.

Optimal Quantity

The quantity that generates the highest possible total profit.

Economic Analysis

The systematic approach to determining the optimum use of scarce resources, involving comparison of two or more alternatives in achieving a specific objective under the given assumptions and constraints.