Do any of you experience your loved one recalling things not true?

I don't mean, like full conversations or events...but more like..."Oh, that guy was here last time we were here."...or "we saw that same car yesterday"...

I am curious about this. My little Mom started doing this a couple years ago and it's gotten a lot worse. She will adamantly say, "I already saw this." When I only just printed it off for the first time. It's confusing to me.

I saw a wonderful post from someone in this site, stating that we caregivers should not: Correct, Argue, Reason or Explain. I wrote this down and fully intend to implement this ASAP.

But what causes these fake recollections? Is is just a complication of age? or something more scary? I believe she has dementia. She is 84 years old and lives with me. I love her and worry that she's totally losing it sometimes. :0(