Which of the Following Statements Is Incorrect

question 73

Multiple Choice

Which of the following statements is incorrect?

• A)If selling and administrative expenses as a percentage of sales increases, then gross margin percentage will decrease.
• B)If the cost of goods sold percentage decreases and other expenses do not change, then profit margin will increase as a percentage of sales.
• C)If sales dollars decrease, a company might still report a higher gross profit percentage if cost of goods sold decreases at a faster rate than the decrease in sales.
• D)It is possible for selling and administrative expense in dollars to decrease, while selling and administrative expenses as a percentage of sales to increase.

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Definitions:

Annual Dividend

The total amount of dividend payments made to shareholders over the course of a year, often used as an indicator of a company's financial health.

Rate of Return

The accrual or depletion in value of an investment across a chosen period, quantified as a percentage of the investment’s initial expense.

Constant Dividend

A policy in which a firm aims to pay out a fixed dividend amount to shareholders regularly.

Constant Dividend

A Constant Dividend refers to a fixed amount of money paid out to shareholders of a corporation's profits on a regular basis.