A Random Sample for Tests of Controls Is a Sample

question 72

Multiple Choice

A random sample for tests of controls is a sample

• A)that is representative of the population
• B)large enough to reduce sampling error to an acceptable level
• C)that includes a monetary amount in the item selected
• D)that will be subject to the internal control system of the client
• E)where every item in the population has an equal chance of selection
• F)both A and C
• G)both A and E
• H)both B and D

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Definitions:

Patent Amortization

The gradual expensing of the cost of a patent over its useful life, reflecting the consumption of the patent's value.

Depreciation Expense

The allocated portion of the cost of a fixed asset expensed each year over its useful life, representing wear and tear or obsolescence.

Gain

The increase in the value of an asset or the positive difference between the selling price of an asset and its cost.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recorded as assets on the balance sheet until they are consumed or used.