VSolo,CPA,performed a Nonstatistical Sampling Plan to Examine the Inventory Balances

question 55

Multiple Choice

V.Solo,CPA,performed a nonstatistical sampling plan to examine the inventory balances of Hope,Inc.In selecting the sample of 70 items,Solo used an expected misstatement of $40,000 and a tolerable misstatement of $65,000.The account balance consisted of 1,050 items totaling $1,200,000.The sample's recorded value was $80,000,and the audited value was $76,000.What conclusion did Solo draw regarding the account balance?

• A) To accept it because the estimated misstatement is less than the tolerable misstatement.
• B) To reject it because the estimated misstatement is more than the expected misstatement.
• C) To accept because the estimated misstatement is less than the expected misstatement.
• D) To reject because the estimated misstatement is more than the tolerable misstatement.

Understand how to perform and interpret vertical analysis on financial statements.

Recognize the importance of a systematic approach to financial analysis, starting with horizontal and vertical analysis.

Assess the impact of various financial ratios on a company's liquidity and ability to pay interest on debt.

Identify the limitations of reliance on a single financial ratio for liquidity assessment.

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Definitions:

Male Token

A term used to describe a man who is in a minority in a predominantly female environment, often highlighting the tokenism experienced.

Workplace Experience

Refers to an individual's personal interactions, tasks, and overall journey within a professional environment or organization.

Retrospective Research

A study method that looks back at events that have already occurred, often through the analysis of existing records or data.

Examples

Specific instances or cases used to illustrate a principle, pattern, or phenomenon.