For Monetary-Unit Sampling, a Sampling Interval of 400 Means That

question 45

Multiple Choice

For monetary-unit sampling, a sampling interval of 400 means that

• A) Every 400^th item in the account will be selected in the sample.
• B) The average size of items in the account is 400.
• C) Every 400^th dollar in the account will be included in the sample.
• D) The average misstatement in sample items is $400.

---

Definitions:

Net Credit Sales

Sales made on credit minus any sales returns or allowances, reflecting the actual credit sales revenue.

Uncollectible Accounts

Debts owed to a company that are considered to be uncollectable and are therefore written off as a bad debt expense.

Estimated Uncollectible

An accounting term referring to the portion of accounts receivable that a company does not expect to collect.

Allowance Method

is an accounting technique that estimates and reports the likely amount of uncollectible accounts receivable as an allowance for doubtful accounts.