If Employees Are Told That Budgets Must Be Cut by 10

question 109

Multiple Choice

If employees are told that budgets must be cut by 10 percent, they may automatically assume that 10 percent of employees will lose their jobs, too, even if that is not the case. This tendency to make assumptions is referred to as _____.

• A) closure
• B) regularization
• C) convergent thinking
• D) congruence bias

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Definitions:

Intra-Entity Transfer

The movement of goods, services, or funds between different parts of the same organization.

Consolidated Net Income

The total net income of a parent company and its subsidiaries after eliminating intercompany transactions.

Gain Recognized

The process of recording in financial statements the profit earned from the sale or exchange of an asset, reflecting an increase in economic benefits.