Which of the Following Statements Is Incorrect

question 148

Multiple Choice

Which of the following statements is incorrect?

• A) Higher financial leverage involves higher risk.
• B) Risk is higher if a company has more liabilities.
• C) Risk is higher if a company has higher assets.
• D) The debt ratio is one measure of financial risk.
• E) Lower financial leverage involves lower risk.

Recognize the broad objectives and needs of management accounting.

Explain the role of objectivity in management accounting and ethical considerations in decision-making.

Identify the influence of external factors and concepts like contingency theory on management accounting systems.

Understand the differences and responsibilities between staff and line management in organizations.

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Definitions:

Customer Needs

The desires or requirements that customers expect from products or services to solve problems or achieve goals.

Promotions

Marketing activities that aim to increase visibility, sales, or the launch of new products through various strategies and media.

Purchase Decision

The final determination or choice made by a consumer to buy a product or service after considering various factors.

Informing

The act of providing useful or necessary information to people.