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ECON3200 Monetary Economics

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  • Course Code: ECON3200
  • University: The University Of Queensland
  • Country: Australia

Questions:

Emerson Washburn is examining the accounts receivable of Anaheim Company and has decided to use MUS to select a sample of customer accounts for confirmation. Anaheim's accounts receivable totalled $3,500,000 and comprised 3,000 different customer accounts ranging in amount from $200 to $125,000. Based on the characteristics of the population and acceptable risk of incorrect acceptance, tolerable misstatement, and expected misstatement, Washburn determined a sample size of 20 accounts.

Required

  1. Without making any calculations, briefly describe how Washburn would select a sample of customer accounts from the population of accounts receivable.
  2. If Washburn selected a random starting point of 172,600, what are the first four dollar amounts that would be selected? How would Washburn proceed to evaluate these items?
  3. What would Washburn do if two of the dollar amounts selected were contained within the same customer account?
  4. Anaheim maintains its accounts receivable balances in a computerized file that has the following information:
    (1) customer number,
    (2) customer name,
    (3) total account balance, and
    (4) account status (current versus past due). For each of these elements, comment on any procedures that Washburn should perform before selecting the sample if the population were arranged based on these elements (for example, arranged numerically by customer number, alphabetically by customer name).
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