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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:
in month of sale
in month following sale
in second month following sale
- What is the budgeted accounts receivable balance on December 1
Availability Bias
A cognitive bias that causes people to overestimate the importance or frequency of information that is readily available to them.
Confirmation Error
A cognitive bias that leads individuals to favor information or interpretations that confirm their pre-existing beliefs or hypotheses.
Representativeness Bias
A cognitive bias where individuals inaccurately judge the probability of an event by comparing it to an existing prototype in their minds.
Heuristics
Heuristics represent simplified strategies or rules of thumb that individuals use to make decisions or solve problems quickly when faced with complex information or limited time.
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