Which statement is false?
A)Shortening the estimated useful lives of depreciable assets will lead to a higher fixed asset turnover.
B)Using an accelerated depreciation method instead of the straight-line depreciation method will lead to reporting a higher fixed asset turnover during the earlier years of an asset's life.
C)Acquiring more long-lived,productive assets when a company is growing will lead to a lower fixed asset turnover.
D)Selling off long-lived,productive assets while maintaining sales will lead to a lower fixed asset turnover.

Question

Quizplus · Accepted Answer

Selling off long-lived, productive assets while maintaining sales will actually lead to a higher fixed asset turnover because the denominator of the turnover ratio (average fixed assets) decreases, assuming sales remain constant. This increases the turnover ratio, contrary to what option D suggests.

Which Statement Is False