You Want to Order a Pizza and Need to Pay

question 56

Multiple Choice

You want to order a pizza and need to pay with a credit card. You glance at your credit card number and then put the card back into your wallet. When it comes time to pay, you can only remember the first four numbers. Which of the following provides the best explanation as to why?

• A) Working memory is limited to 15 items, and your card has 16 digits.
• B) Your credit card number is mostly fours and twos and you get confused.
• C) The pizza delivery guy keeps talking while you are rehearsing the digits.
• D) Working-memory capacity is reduced because you have to hold the phone.

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Definitions:

Insurance Expense

The cost incurred from purchasing insurance policies, recognized over the period to which the insurance coverage relates.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.

Incurred

Refers to a cost that has been realized or a liability that has been acquired during a specific period.

Statement of Cash Flows

An overview of a company's cash transactions, detailing money coming in from operational efforts and investment activities, and money going out to cover the costs associated with these activities during a specific period.