Stratification Is When an Auditor Selects a Sample for Testing

question 34

True/False

Stratification is when an auditor selects a sample for testing by dividing the number of population items by the sample size,resulting in the sampling interval.

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Definitions:

Initial Cost

The initial expenditure needed to acquire an asset or initiate a project, encompassing purchase price and any other costs necessary to get the asset ready for use.

Straight-Line Depreciation

A method of depreciating an asset where its cost is reduced equally over its useful life.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment, by calculating the difference between its present value of cash inflows and investment cost.

Mutually Exclusive

A situation or decision-making scenario where the acceptance of one option necessarily means the rejection of another.