You Go to Africa to Study Elephants

question 162

Multiple Choice

You go to Africa to study elephants. You follow one particular group, and one day you observe the other members of the group gather around a sick and dying elephant. The healthy elephants shuffle and trumpet and act in an agitated manner. You conclude that they are sad because one of their members is dying. Without any other evidence, you have just

• A)committed the anthropomorphic error.
• B)become involved in the observer effect.
• C)engaged in research participant bias.
• D)created an empirical fallacy.

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Definitions:

Incremental Borrowing

Refers to the additional interest or costs a company incurs to obtain extra funds or increase its level of debt.

Commercial Substance

The concept refers to a situation where the risk, timing, or amount of future cash flows of a business changes as a result of a transaction.

Straight-Line Method

A method of calculating the depreciation of an asset, which spreads the cost evenly over its useful life.

Depreciation Expense

The portion of the cost of a fixed asset that is recognized as an expense in the income statement over its useful life.