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:

Average Cost Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items available during the period.

Cost Of Merchandise Sold

The total expense of buying and preparing merchandise for sale, including the cost of the goods themselves and any additional expenses related to their sale.

Gross Profit

The amount of money a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

FIFO Perpetual

An accounting method where the first items placed in inventory are the first ones sold, continuously tracking inventory levels.