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

Question

Quizplus · Accepted Answer

Sally is using inductive reasoning by observing specific examples (Cash and Inventory accounts) and generalizing to a broader conclusion (all asset accounts have a debit balance).

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