What Involves Analyzing Business Operations for Internal Decision Making and Does

question 2

Multiple Choice

What involves analyzing business operations for internal decision making and does not have to follow any rules issued by standard-setting bodies such as GAAP?

• A) Accounting
• B) Bookkeeping
• C) Financial accounting
• D) Managerial accounting

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Definitions:

Anchoring and Adjustment Bias

A cognitive bias where an individual relies too heavily on an initial piece of information (anchor) when making decisions, even if it is unrelated or irrelevant.

Availability Bias

A cognitive bias where people overestimate the importance of information that is readily available to them.

Confirmation Error

A cognitive bias where individuals favor information that confirms their existing beliefs or hypotheses.

Representativeness Bias

A cognitive bias where individuals incorrectly assess the likelihood of an event based on how closely it resembles their stereotypes of a category.