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:

Fee for Services

A payment model where healthcare providers are paid for each service, such as tests and procedures, they perform.

Double-Entry Bookkeeping System

An accounting method that records each transaction in two accounts, ensuring the accounting equation balances.

Single-Entry System

An accounting method where each financial transaction is recorded with a single entry to the accounting records, not offering the check balance of double-entry bookkeeping.

Charges

Fees or prices asked for goods and services, or accusations made against someone in a legal context.