After Tossing a Nickel in the Air 6 Times and Having

question 138

Multiple Choice

After tossing a nickel in the air 6 times and having it land showing "heads," Nick decided his odds were best that the nickel would land showing "tails" the next time. However, Nick failed to realize his odds were still 50-50. This is an example of a(n) __________

• A) representativeness heuristic.
• B) availability heuristic.
• C) exemplar.
• D) additive strategy.

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Definitions:

Closing Entry

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, ultimately resetting the balances of temporary accounts to zero.

Income Summary

An account used in the closing process that summarizes the results of operations by collecting all revenue and expense account balances before determining the net income or loss.

Retained Earnings

The cumulative amount of profits that have been reinvested in the business rather than distributed to shareholders as dividends.

Dividends

Dividends disbursed to members holding shares in a corporation, generally originating from the profits of the business.