Using Statistical Sampling to Assist in Verifying the Year-End Accounts

question 12

Multiple Choice

Using statistical sampling to assist in verifying the year-end accounts payable balance, an auditor has accumulated the following data:
Using the ratio estimation technique, the auditor's estimate of the year-end accounts payable balance would be:

• A) $6 000 000.
• B) $6 150 000.
• C) $5 050 000.
• D) $5 125 000.

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Definitions:

Short-run Supply Curve

A graphical representation showing the quantity of a good a firm is willing to supply at different prices in a short time frame, typically with some fixed inputs.

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products, and free entry and exit.

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good varies as the quantity of the good produced changes.

Average Fixed Cost

The fixed cost per unit of output.