Which of the Following Would Be an Improper Technique When

question 43

Multiple Choice

Which of the following would be an improper technique when using monetary-unit statistical sampling in an audit of accounts receivable?

• A) Combining negative and positive dollar misstatements in the appraisal of a sample.
• B) Using a sampling technique in which the same account balance could be selected more than once.
• C) Selecting a random starting point and then sampling every nth dollar.
• D) Defining the sampling unit in the population as an individual dollar and not as an individual account balance.

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Definitions:

Manufacturing Overhead Cost

This represents all indirect costs associated with the production process, excluding direct materials and direct labor.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behaviors hold true, often used in budgeting and planning.

Product Costs

The costs directly associated with the production of goods, including materials, labor, and overhead.

Incurred Costs

Expenses that a company has realized or committed to pay, often related to operations or production.