Favoring New Choices That Are Similar to the Current Situation

question 14

Multiple Choice

Favoring new choices that are similar to the current situation refers to which thinking trap?

• A) status quo
• B) anchoring
• C) sunk costs
• D) confirming evidence

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Definitions:

Balance Sheet

The balance sheet is a financial statement that shows a company’s financial position by detailing its assets, liabilities, and shareholders' equity at a specific point in time.

LIFO

Last-In, First-Out, an inventory valuation method where the goods purchased last are the first to be sold.

Inventory Costing Method

An accounting approach used to value inventory, determining the cost of goods sold and ending inventory balances; common methods include LIFO, FIFO, and weighted average cost.

Financial Statements

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