The 2000 Accounts Receivable of ABC Company Have a Total

question 30

Multiple Choice

The 2000 accounts receivable of ABC Company have a total book value of $40,000.Bob Rotter,CPA,has selected and audited a sample of 100 accounts with a total book value of $1,950.The audited value of the 100 accounts in the sample is $1,875. Using the mean-per-unit estimation technique,Rotter's estimate (to the nearest dollar) of year-end accounts receivable balance would be:

• A)$37,500
• B)$38,462
• C)$38,500
• D)$41,600

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Definitions:

Corporate Life Cycle

A concept that describes the progression of a company through stages of growth, maturity, and decline or renewal.

Lapse

The expiration or termination of a right, privilege, or policy due to the passage of time or inaction.

Maturity

The date on which a financial obligation, such as a bond or loan, becomes due and is to be paid off.

Growth

A key objective for businesses and economies, referring to an increase in capacity, value, or size, often measured by metrics such as GDP for economies and sales revenues for businesses.