Jones,CPA,used a Classical Variables Sampling Application to Examine the Inventory

question 74

Multiple Choice

Jones,CPA,used a classical variables sampling application to examine the inventory balance of XYZ Company.The recorded balance of the inventory was $240,000,and Jones determined a tolerable misstatement of $12,000.Jones' sampling procedures resulted in a precision interval of $224,000 to $236,000.As a result,Jones should conclude that the

• A)Inventory balance is fairly stated.
• B)Inventory balance is materially misstated.
• C)Tolerable misstatement should be increased.
• D)Risk of incorrect acceptance is below the desired level.

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Definitions:

Personal Injuries

Physical or emotional harm caused to an individual, often leading to legal claims for compensation.

Special Property Interest

A specific legal right or claim one has in property, distinguishing it from general ownership interests.

Identified Goods

In a sales transaction, goods that are specified and agreed upon by both the buyer and seller at the time a contract is entered into.

Specific Performance

A legal remedy in which a court orders a party to perform their contractual obligations rather than compensating the other party with money.