To Determine the Appropriate Sample Size for an Attributes Sampling

question 96

Multiple Choice

To determine the appropriate sample size for an attributes sampling application,Williams,CPA,defined the population to be 25,000 sales invoices.Williams then assessed the risk of overreliance to be 10%,the tolerable rate of deviation to be 4%,and the expected population deviation rate to be 2.5%.Using the AICPA Sample Size tables,the appropriate sample size would be:

• A)9
• B)13
• C)353
• D)513

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Definitions:

Purchase Returns

Transactions where buyers return previously purchased merchandise to the seller, often because of defects or errors in the shipment.

Returns

The process of a customer returning previously purchased merchandise back to the seller, or the amount of profit generated from an investment.

Gross Margin Ratio

A financial indicator that calculates the disparity between sales and the cost of goods sold, represented as a portion of sales revenue.

Net Sales

The total revenue from sales reduced by returns, allowances for damaged or missing goods, and discounts.