Cruz,CPA Decided to Use Nonstatistical Sampling to Examine the Accounts

question 94

Multiple Choice

Cruz,CPA decided to use nonstatistical sampling to examine the accounts payable balances of Maverick Inc.,Based on his professional judgment,Cruz judgmentally selected sample invoices from a file,but did so without any intentional bias.The selection method used by Cruz was

• A) haphazard selection.
• B) block selection.
• C) systematic selection.
• D) random selection.

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Definitions:

Accruals

Accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged, to reflect the true financial position of a company.

Cash Flow Assessment

The analysis of a company's cash inflows and outflows to evaluate its financial health.

Credit Risk

The risk of loss due to a borrower's failure to make payments on any type of debt.

Investment Potential

This refers to the likelihood or capacity for an investment to grow in value, offering returns to the investor.