The Process of Observing Real-World Behavior, Developing Hypotheses, Testing Them

question 214

Multiple Choice

The process of observing real-world behavior, developing hypotheses, testing them against facts, then using the results to construct theories is called

• A) opportunity cost estimation.
• B) the scientific method.
• C) marginal analysis.
• D) normative analysis.

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Definitions:

Drawing

The account used to record amounts withdrawn by an owner of a proprietorship.

Closing Entry

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, clearing out revenues and expenses for the next period.

Wages Expense

The total cost incurred by a company for paying its employees, often reflected as an operating expense on the income statement.

Rent Expense

The cost incurred by a business to utilize property or equipment for operations, which is recorded as an expense on the income statement.