Sampling by accountants. Accountants use stratified samples during audits to verify a company’s records of such things as accounts receivable. The stratification is based on the dollar amount of the item and often includes 100%

sampling of the largest items. One company reports 5000 accounts receivable.

Of these, 100 are in amounts over $50,000; 500 are in amounts between $1000 and $50,000; and the remaining 4400 are in amounts under $1000. Using these groups as strata, you decide to verify all of the largest accounts and to sample 5% of the midsize accounts and 1% of the small accounts. How would you label the two strata from which you will sample? Use Table A, starting at line 115, to select only the first 5 accounts from each of these strata.

AppendixLO1