Fred Needs Major Heart Surgery,and He Has Consulted with Two

question 279

Multiple Choice

Fred needs major heart surgery,and he has consulted with two doctors about the operation.Dr.Marx tells Fred he has a 90% chance of surviving the surgery; Dr.Scalli tells Fred there is a 10% chance that he won't survive the surgery.Based on Kahneman and Tversky's research,

• A) Fred is most likely to let Dr. Scalli perform the operation.
• B) Fred will probably avoid making a decision until it is too late.
• C) Fred is most likely to let Dr. Marx perform the operation.
• D) Fred won't care who does the surgery because both doctors have presented the same information.

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Definitions:

Deferral Adjusting Entry

An accounting entry made to defer the recognition of revenue or expenses to a future period.

Unearned Revenue

Money received by an entity for a service or product that has yet to be delivered or completed.

Interest Revenue

Income earned from lending money or from investments in interest-bearing accounts or securities.

Matching Revenue

The accounting principle of recognizing revenue and the related expenses in the same accounting period to accurately report profit.