On May 1,Jorge Co

question 99

True/False

On May 1,Jorge Co.purchases notes of Radiotech for $25,000.This investment is considered to be an available-for-sale debt investment.This is the company's first and only investment in available-for-sale debt securities.On July 31 (Jorge's year-end),the notes had a fair value of $28,000.Jorge should record a credit to Unrealized Gain-Equity for $3,000.

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Definitions:

Authority

A right or power assigned to an individual or organization to make decisions and enforce rules.

Confirmation Bias

Confirmation bias describes the tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities.

Availability Heuristic

This is a mental shortcut that relies on immediate examples that come to a person's mind when evaluating a specific topic, concept, method, or decision.

Representativeness Bias

A cognitive bias where individuals judge the probability of an event by how much it resembles their existing stereotypes or expectations, rather than based on actual statistical evidence.