Which of the Following Cognitive Biases Refers to the Fact

question 32

Multiple Choice

Which of the following cognitive biases refers to the fact that decision makers who have strong prior beliefs about the relationship between two variables tend to make decisions on the basis of these beliefs,even when presented with evidence that their beliefs are wrong?

• A) Prior hypothesis bias
• B) Reasoning by analogy
• C) Illusion of control
• D) Escalating commitment
• E) Representativeness

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Definitions:

Revenue Recognition

Accounting principle that outlines the specific conditions under which revenue is recognized and dictates how to account for it on the financial statements.

Substantially Completes

A phrase indicating that a project or task is nearly finished or that a significant portion of the work has been accomplished.

Cash Basis

An accounting method where revenues and expenses are recorded only when cash is received or paid out.

Mismatching Problems

Issues that arise when expenses are recognized in a different period than the revenues they help to generate, potentially distorting financial statements.