You are auditing Hernandez Inc.s accounts receivable balance using classical variables sampling. Hernandezs accounts receivable comprised 2,500
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a. What is the sample estimate of Hernandez’s accounts receivable balance using meanperunit estimation.
b. If you used difference estimation or ratio estimation, how would you expect the sample size to be different?
c. In what circumstances should each of the different methods of classical variables estimation be used?
d. If you calculate a sample estimate of $ 3,000,000 and precision of $ 750,000, form a precision interval for Hernandez’s accounts receivable using mean- per- unit estimation. Briefly describe the meaning of the precision interval as well as your conclusion with respect to Hernandez’s accounts receivable balance.
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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Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
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