When Defining the Population and the Sampling Unit for Tests

question 59

Multiple Choice

When defining the population and the sampling unit for tests of details of balances,

• A) the population is defined as all of the transactions in the journal for the period.
• B) the sampling unit must be the same for all balance sheet accounts.
• C) if sampling for completeness, the sampling unit will be customers with zero balances.
• D) if sampling for completeness, the sampling unit will be the items making up the recorded population.

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Definitions:

Direct Materials Purchases Variance

The difference between the actual cost of materials purchased and the expected cost at standard prices.

Direct Labor-Hours

An alternative term for direct labor-hour, referring to the labor time spent by employees directly on manufacturing a product.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected (standard) cost times the actual quantity of materials used.

Direct Materials Purchases Variance

The difference between the budgeted cost of materials that should have been purchased for the production volume and the actual cost of materials purchased.