Use of the Ratio Estimation Sampling Technique to Estimated Dollar

question 57

Multiple Choice

Use of the ratio estimation sampling technique to estimated dollar amounts is inappropriate when:

• A) the total book value is known and corresponds to the sum of all the individual book values.
• B) a book value for each sample item is unknown.
• C) there are some observed differences between audited values and book values.
• D) the audited values are nearly proportional to the book values.

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Definitions:

Mean

A statistical measure referring to the average value in a set of numbers, calculated by dividing the sum of all numbers by the quantity of numbers.

Typical Age

A reference to the most common age or age range at which an event, behavior, or development stage usually occurs.

Standard Deviations

A measure of the amount of variation or dispersion of a set of values, indicating how much the individual data points differ from the mean value of the set.

Correlation

A statistical measure that describes the extent to which two variables change together, but does not necessarily imply causation.