You Are on a Small Boat and Need to Anchor

question 75

Multiple Choice

You are on a small boat and need to anchor it to keep it from moving. All you have on board is a hammer and the clothes on your back. You realize that you could take off your shirt, rip it into strips, tie them together and finally tie the strips to the hammer and use this as an anchor. Here you have avoided the problem of

• A)mentalimagery
• B)incubation
• C)functional fixedness
• D)subgoal analysis
• E)divergent thinking

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Definitions:

Interest Payable

A liability account on a company's balance sheet representing the amount of interest expense that has been incurred but not yet paid as of the reporting date.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the correct period.

Effective Interest Method

An accounting practice used to allocate bond premiums or discounts over the life of the bond.

Straight-Line Amortization

A method of allocating an intangible asset's cost evenly across its useful life, resulting in a consistent expense amount each period.