During the Final Planning of the Accounts Receivable Program a CPA

question 52

Multiple Choice

During the final planning of the accounts receivable program a CPA specified a tolerable misstatement of $30,000,instead of the $20,000 contained in the preliminary audit program.What would be the impact of this change?

• A)A decrease in population standard deviation.
• B)An increase in sample standard deviation.
• C)An increase in required sample size.
• D)A decrease in the required sample size.

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Definitions:

Common-Size Percentages

Financial analysis tool that converts each line item of financial statements into a percentage of a common base figure to allow for easy comparison.

Balance Sheets

Financial statements that show a company's financial position, detailing assets, liabilities, and equity at a specific point in time.

Inventory Turnover

A ratio indicating how many times a company's inventory is sold and replaced over a period.

Days' Sales In Inventory

A financial ratio that measures the average number of days a company takes to sell its inventory.