The Composition of Oak and Company's Accounts Receivable Are as Follows

question 96

Multiple Choice

The composition of Oak and Company's accounts receivable are as follows: Over $250,000 - 5 accounts
Between $25,000 and $250,000 - 80 accounts
Less than $25,000 - 200 accounts
The best confirmation strategy for the auditor is:

• A)Positive confirmations on a sample of all 285 accounts.
• B)Positive confirmations on all a sample of all accounts over $25,000; negative confirmations on a sample of accounts less than $25,000.
• C)Positive confirmations on all 5 accounts over $250,000; positive confirmations on a sample of the accounts between $25,000 and $25,000; negative confirmations on a sample of accounts less than $25,000.
• D)Positive confirmations on all 5 accounts over $250,000; negative confirmations on a sample of the accounts less than $250,000.

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Definitions:

Confidence Interval

This statistical metric signifies the estimated range of values within which a population parameter falls, presented with a certain degree of confidence, showing the precision of an estimate.

York University

A public research university located in Toronto, Ontario, Canada.

Standard Error

A statistical measure that describes the distribution of sampling means around the population mean, indicating the precision of the sample mean estimate.

Sample Size

The number of observations or data points collected in a statistical study.