A population of receivables has a book value of £3,600,000. The auditor uses monetary unit sampling with a sample of 90 items. What is the sampling interval?
Answer and explanation
Correct answer: B. £40,000
- Step 1: In monetary unit sampling each pound is a sampling unit, and the interval is the population value divided by the sample size.
- Step 2: £3,600,000 / 90 = £40,000.
Answer
£40,000.
Why not the others: £4,000 is a decimal-place slip. £400,000 is a decimal-place slip in the other direction. £324,000,000 multiplies the population value by the sample size.
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