For each of the following independent situations, indicate the advantages and disadvantages of MUS and classical variables sampling. a. You
For each of the following independent situations, indicate the advantages and disadvantages of MUS and classical variables sampling.
a. You are selecting a sample of customer accounts receivable balances for confirmation. The sample is to be selected from a population of customer accounts receivable, the total of which exceeds $ 4,000,000. This list comprises 4,000 individual customer accounts that are relatively similar in dollar amount with balances ranging from $ 800 to $ 8,000. In past years, you have identified a moderate level of misstatement in the client’s accounts receivable although the level of misstatement was always less than the tolerable misstatement.
b. You are selecting a sample of accounts payable balances for confirmation with vendors. The population is a list of accounts payable to vendors; at year- end, the total (unaudited) accounts payable balance is $ 800,000. Amounts owed by the client to 200 separate vendors are included in this balance. Because the client has two major suppliers, a disproportionate amount of this balance ($ 500,000) is concentrated in these two accounts.
c. You are selecting a sample of customer accounts receivable balances for confirmation. The population is a list of customer accounts receivable; at year- end, the accounts receivable total is $ 2,500,000. Compared to most of your clients, the number of customer accounts included in this balance is relatively small, and the balances range from $ 1,000 to $ 525,000.Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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