Carrie Found an Error in the Sample She Tested from the Population

question 57

Multiple Choice

Carrie found an error in the sample she tested from the population of accounts receivable that was over 90 days old.The error found by Carrie should be extrapolated to the population of

• A)all past-due accounts receivable.
• B)accounts receivable over 90 days.
• C)all accounts receivable.
• D)current accounts receivable.

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Definitions:

Collection

The process of gathering or accruing items or amounts owed to a business, typically in the context of accounts receivable.

Loan Made

Money that is lent to another party in exchange for future repayment of the loan value amount, plus interest.

Indirect Method

An accounting technique used to prepare the cash flow statement, where increases in non-cash current assets are subtracted from, and increases in current liabilities are added to, net income to arrive at net cash flow from operating activities.

Net Cash

The difference between all cash inflows and outflows within a given period, often used to assess financial health.