Sally Observes That 'Cash' Account Is an Asset Account and Has

question 14

Multiple Choice

Sally observes that 'Cash' account is an asset account and has a debit balance. She also notices that 'Inventory' account is an asset account and has a debit balance. Therefore, Sally comes into conclusion that all asset accounts have a debit balance. Which approach does Sally use in developing her theory about all asset accounts having a debit balance?

• A) Deductive reasoning
• B) Inductive reasoning
• C) Conceptual reasoning
• D) Conclusive reasoning

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