Deductive reasoning is the process by which you come to a conclusion by starting with the cause and ending with the effect.

Sherlock Holmes was quite a fan of it. It is the formulation of a theory, the gathering of evidence (via observation), and the confirmation or dismissal of the theory.

If a co-worker were to walk by your desk just after lunch break and say "Too bad you missed lunch, today", without having any way of knowing this, you would likely be puzzled.

Their deductive line of thought, however, might be as such:

Theory: John Doe didn't go to lunch today.

Evidence:
Bank slip on John Doe's desk is dated today.
John Doe was at his desk until lunch.
It is Friday, and the banks would be jammed.
John would not have had time to eat at a restaurant.
There is no litter around the desk to indicate take-away food.
John is not currently eating.

Confirmation:
John Doe did not go to lunch.

The leap from submittal of evidence to confirmation of theory is called a "deductive leap". This manner of decoding events is most often used in science and law.

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