Describe the Main Advantage of Rule-Governed Behavior Over Contingency-Shaped Behavior

question 129

Essay

Describe the main advantage of rule-governed behavior over contingency-shaped behavior. What are the two disadvantages of rule-governed behavior?

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Definitions:

Balance Sheet

A documentation of a company’s financial position, showcasing assets, liabilities, and the equity held by shareholders at a particular instance.

Lower-of-cost-or-market

An accounting principle that valuables inventory at the lower cost between the original purchase cost and its current market price.

Conservatism

An accounting principle that requires uncertainties and risks to be accounted for by reporting lower potential profits and higher liabilities.

Replacement Cost

The cost to replace an asset at its current market price, often used in insurance and accounting.