The Company Is in the Process of Preparing a Cash

question 19

Multiple Choice

$\begin{array}{lrr}&\text { Cash Sales } & \text { Credit Sales }\\ \text { July } &£ 50,000 &£ 150,000\\ \text { August. } &55,000 & 170,000\\ \text { September } &45,000 &130,000\\ \text { October } &50,000 &145,000\\ \text { November } &60,000 & 200,000\\ \text { December } &80,000 &350,000\\\end{array}$
The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:Collections on credit sales:
$60 \%$ in month of sale
$30 \%$ in month following sale
$10 \%$ in second month following sale
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Assume that the accounts receivable balance on July 1 was £75,000. Of this amount, £60,000 represented uncollected June sales and £15,000 represented uncollected May sales. Given these data, the total cash collected during July would be

• A)£150,000.
• B)£235,000.
• C)£215,000.
• D)£200,000.

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Definitions:

Type I Error

The mistaken dismissal of a valid null hypothesis, commonly known as a "false positive."

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true; often denoted by alpha.

Effect Size

A quantifiable measure of the magnitude of the difference between groups or the strength of a relationship in research findings.

Cohen

A surname often associated with statistical measures of effect size, such as Cohen's d for measuring the difference between two means.