Which statement is false?
A)Shortening the estimated useful lives of our assets will increase the fixed asset turnover.
B)Using an accelerated depreciation method instead of straight-line will lead to reporting a higher fixed asset turnover.
C)Acquiring more operational assets when a company is growing will lead to a lower fixed asset turnover.
D)Selling off operational assets while maintaining sales will cause fixed asset turnover to decrease.

Question

Quizplus · Accepted Answer

Selling off operational assets while maintaining sales will actually cause fixed asset turnover to increase, not decrease, because the denominator (average fixed assets) decreases while the numerator (sales) remains constant.

Which Statement Is False