The Accounting Department Reports That the Balance of Accounts Receivable

question 23

Multiple Choice

The accounting department reports that the balance of accounts receivable is $210 000. You are willing to accept that balance if it is within $15 000 of the actual balance. Using a variables sampling plan, you compute a 95 per cent confidence interval of $208 000 to $225 000. You would therefore:

• A) not be able to determine the acceptability of the receivable balance.
• B) accept the balance but with a lower level of confidence.
• C) take a larger sample before totally rejecting the balance and requiring adjustments.
• D) accept the $210 000 balance because the confidence interval is within the materiality limits.

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Definitions:

American Psychiatric Association

A leading organization dedicated to the advancement of psychiatry and mental health.

Insanity Pleas

A legal defense where the defendant claims they were not responsible for their actions due to psychiatric illness at the time of the crime.

Burden of Proof

The obligation to present evidence to prove one's claim or argument, typically resting on the party who initiates legal action.

Insanity Standard

A legal concept used to determine the extent to which a person's mental illness impacts their ability to understand the nature and wrongfulness of their actions for criminal responsibility.