Which of the following statements regarding net margin is incorrect?
A) Net margin refers to the average amount of each sales dollar remaining after all expenses are subtracted.
B) Net margin may be calculated in several ways.
C) The amount of net margin is affected by a company's choices of accounting principles.
D) The smaller the net margin the better.

Question

Quizplus · Accepted Answer

This statement is incorrect as the larger the net margin, the better it is for a company. It indicates that the company is generating more profits from each sales dollar, which is a positive sign.

Which of the Following Statements Regarding Net Margin Is Incorrect