Which of the Following Statements Is Incorrect

question 37

Multiple Choice

Which of the following statements is incorrect?

• A)A company implementing a cost advantage strategy is attempting to reduce investment in assets thereby improving the asset turnover ratio.
• B)A company implementing a product differentiation strategy is attempting to improve its profit margin through charging higher prices.
• C)A company will attract a higher volume of customers and revenue by following a product differentiation strategy versus a cost advantage strategy.
• D)Financial leverage is a function of both total assets and stockholders' equity.

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Definitions:

Electronic Components

Basic discrete devices or physical entities in an electronic system used to affect electrons or their associated fields.

Percent of Sales Method

A forecasting approach where future amounts are estimated as a fixed percentage of sales.

Bad Debts Expense

An expense account that represents accounts receivable that a company does not expect to collect.

Unadjusted Trial Balance

A listing of all the accounts and their balances from the ledger, before any adjustments, used to check the arithmetic accuracy of bookkeeping.