Accountants often use stratified random sampling during audits to verify a company’s records. The stratification is based on the dollar amount of the item. One company reports 5000 accounts receivable. Of these, 200 are in amounts over $100,000, another 1000 are in amounts between $10,000 and $100,000, and the remaining 3800 are in amounts less than $10,000. Using these three groups as strata, you decide to verify all of the largest accounts, to take a 5% sample of the midsize accounts, and a1% sample of the small accounts. Based on this sampling design, how many accounts will be sampled?

Let's Do It! 2.7 - Accounting Practices

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