Ranger,CPA Used Nonstatistical Sampling to Examine the Accounts Receivable Balances

question 30

Multiple Choice

Ranger,CPA used nonstatistical sampling to examine the accounts receivable balances of Cowboy Inc.,He audited a sample of 150 items and found an audited value of $5,000 less than the recorded value of $25,000.The entire account balance contained 2,000 items and had a total recorded value of $350,000.Using nonstatistical methods and assuming that Ranger used the ratio of audited value to recorded value to estimate the account balance,the estimated total account balance is

• A) $345,000.
• B) $330,000.
• C) $295,000.
• D) $280,000.

---

Definitions:

Absolute Advantage

The capability of a country or individual to produce more of a good or service with the same amount of resources as competitors.

Opportunity Cost

The price paid for not selecting the next most favorable opportunity when deciding.

Production Possibilities Frontier

A curve that depicts all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.), assuming all are used efficiently.

Labor Force

The total number of people employed and unemployed, actively seeking employment in an economy.