Marcus Observes That the Bank Overdraft Account Is a Liability

question 18

Multiple Choice

Marcus observes that the bank overdraft account is a liability account and has a credit balance. He also notices that the accounts payable account is a liability account and has a credit balance. Therefore, Marcus comes to the conclusion that all liability accounts have a credit balance. Which approach is Marcus using in developing his theory that all liability accounts having credit balances?

• A) Conceptual reasoning.
• B) Conclusive reasoning.
• C) Inductive reasoning.
• D) Deductive reasoning.

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Definitions:

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