Some Mental Shortcuts Can Cause Errors in Thinking

question 90

Multiple Choice

Some mental shortcuts can cause errors in thinking.For example,simply because you can remember an example of something very quickly and easily does not mean that you should
Rely on that information in making accurate probability judgments.This error in thinking
Reflects

• A) an analogy.
• B) insight.
• C) the availability heuristic.
• D) the representativeness heuristic.

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Definitions:

Accounting Cycle

The collective process of recording and processing the accounting events of a company, starting from the transaction occurrence to the preparation of financial statements.

Reporting Period

The specific timeframe for which financial statements are prepared, showing the financial position and performance of a company.

Financial Statements

Documents that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Post-closing Trial Balance

A list of all balances in a company’s ledger accounts after the closing entries are made, serving as a check to ensure debits and credits are balanced at the end of an accounting period.