Which of the Following Is an Example of Sampling Risk

question 114

Multiple Choice

Which of the following is an example of sampling risk if an individual is attempting to determine whether the average income in a given neighborhood exceeds $100,000?

• A) The sample results indicate that the average income is $98,000 when it is $90,000.
• B) The sample results indicate that the average income is $99,000 when it is $110,000.
• C) The sample results indicate that the average income is $110,000 when it is $115,000.
• D) All of the above are examples of sampling risk.

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Definitions:

Effective Tax Rate

The percentage of their income that individuals or corporations pay in taxes, taking into account all deductions and credits.

Unrealized Pre-Tax Profits

Profits that have been recorded in financial statements but have not yet been subjected to taxation due to non-realization through sales.

Intercompany Sale

A transaction of goods or services that occurs between two entities within the same parent company.

Mark-Up

The amount added to the cost price of goods to cover overhead and profit; a percentage over cost.