Sally Observes That the Cash Account Is an Asset Account

Multiple Choice

Sally observes that the cash account is an asset account and has a debit balance. She also notices that inventories 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.