1. Simple Interest versus Compound Interest. First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 10 years?

Q: Describe basic allowance for sampling risk.

A: Sampling risk is a type of risk which a auditor may face when performing the important procedure of…

Q: Define Raw materials.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: When is Attribute sampling used?

A: Attributes sampling is a statistical sampling method used to estimate the rate of control procedure…

Q: Define acid-test ratio.

A: Ratio analysis: The analysis of a company using the financial ratios and comparing its trends and…

Q: Define variables sampling and understandwhen it is used in the audit.

A: Variable sampling is a sampling process used by auditors to enumerate the value of a specific…

Q: Understand how various factors influencethe size of an attributes sample and how todetermine the…

A: Audit Sampling is a process in which an audit is done based on various samples collected or…

Q: Define Average collection period.

A: Definition:   Accounts receivable turnover: This is the ratio which analyzes the number of times…

Q: Briefly identify and explain the four methods used to select sample items.

A: Definition: Auditor: Auditor is an accounting professional hired by a company to review the…

Q: Define binomial approach

A: Most organizations have credit policies created for providers or clients, so you can make exchanges…

Q: Define the terms precision (allowance for sampling risk), reliability (confidence), and…

A: Precision (allowance for sampling risk) is a measure of the difference between a sampling projection…

Q: how to compute quantity/efficiency variance

A: Cost accounting is beneficial since it can demonstrate where a corporation spends money, earns…

Q: Define variance

A: Variance in statistics is the calculation of the distribution in an information source between the…

Q: Define direct material variance.

A: Variance:   Variance refers to the difference level in the actual cost incurred and standard cost.…

Q: variances

A: Variance means change Variances arise after comparison with standard to Actual.   Types of Variances…

Q: What type of testing are ratios?

A: Ratio:   It is a number expressed in terms of another to establish a relationship among them.

Q: Distinguish between the terms sampling risk and nonsampling risk.

A: Introduction: The risk of sampling is that the conclusion based on a sample may differ from the…

Q: What is Audit Sampling?

A: Audit sampling is the use of an audit procedure which says that selection of some sample items from…

Q: Differentiate between variance analysis and sensitivity analysis

A: Managers of small businesses can benefit from both variance and sensitivity analyses when trying to…

Q: What is a sweep?

A: A sweep account is a bank account or brokerage account that will automatically transfers amounts…

Q: Probability samples versus nonprobability samples; also briefly define the types of valid…

A: Solution- Probability sampling- 1- probability sampling, respondents are randomly selected to take…

Q: Construct a sample problem of External Rate of Return (ERR).

A: External rate of return (ERR) or Internal rate of return (IRR) is the rate at which Present Value of…