Cruz,CPA Decided to Use Nonstatistical Sampling to Examine the Accounts

question 84

Multiple Choice

Cruz,CPA decided to use nonstatistical sampling to examine the accounts payable balances of Maverick,Inc.Based on his professional judgment,Cruz judgmentally selected sample invoices from a file,but did so without any intentional bias.The selection method used by Cruz was

• A)Haphazard selection
• B)Block selection
• C)Systematic selection
• D)Random selection

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Definitions:

Debt Covenants

Restrictions lenders put on borrowing agreements to maintain certain financial ratios and ensure the borrower's financial stability.

Signaling Function

The act of conveying information indirectly through actions or behaviors, often used in economics and finance to indicate future intentions or the current state of affairs.

Steady Flow

implies a constant and uniform rate of flow in processes, often used in the context of fluid dynamics and economic models.

Debt Covenants

Provisions agreed upon in debt contracts that place restrictions or obligations on the borrower to either do or not do certain actions.