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:

Semicircular Canal

One of three half-circle-shaped canals of the vertebrate inner ear; contains sensory receptors for rotational equilibrium.

Cupula

A gelatinous structure in the vestibular system of the inner ear, involved in sensing rotational movements.

Otoliths

Small, calcium carbonate structures located in the inner ear of vertebrates, crucial for balance and sensing linear accelerations.

Auditory Center

The area within the brain, particularly the temporal lobes, responsible for processing and interpreting sounds.