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

question 21

Multiple Choice

Pujols,CPA,performed a nonstatistical sampling plan to examine the inventory balances of Wieserbud Brewing,Inc.and estimated the account balance based on the ratio of audited value to recorded balances.He audited 120 items from a sample and found an audited value of $24,600.The sample had a recorded balance of $30,000.If the entire inventory contained 2,400 items and the total recorded balance of the inventory was $480,000,the estimated account balance using nonstatistical methods is:

• A)$393,600.
• B)$474,500.
• C)$480,000.
• D)$500,000.

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Definitions:

Cash Receipts

The collection of money, including currency, checks, and electronic transfers, by a business during a given period.

Receipts Issued

Documents provided to customers or clients as proof of payment for goods or services received.

Bank Reconciliation

The act of reconciling the amounts in a company's bookkeeping records of a cash account with the related details found on a bank statement.

EFT Transfer

An electronic transfer of funds from one bank account to another, either within a single financial institution or across multiple institutions.