Which of the Following Statements Is Not Correct

question 9

Multiple Choice

Which of the following statements is not correct?

• A) Purchasing fixed assets through debt financing decreases the financial leverage ratio.
• B) Accruing an expense will affect the net profit margin ratio.
• C)Return on equity may increase even when the financial leverage ratio decreases.
• D)Purchasing treasury stock results in a decrease in asset turnover.

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Definitions:

Timely Notice

Prompt notification within a designated or reasonable period, often required by law or agreement to uphold rights or fulfill obligations.

Dishonor

The state of being in disgrace or disrepute, often relating to a failure to fulfill an obligation, especially a financial one.

Unauthorized Checks

Checks that are issued and used without the account holder's knowledge or consent, typically an illegal activity.

Liability

The state of being legally responsible or obligated to settle a debt, fulfill a contractual duty, or compensate for harm or loss.