Which of the following is not consistent with the changes in financial results reported by Momentum Clothing Distributors?
A)Momentum obtained additional debt and equity financing in 2005,which the company used to acquire additional assets.
B)Assets acquired in 2006 did not improve Momentum's ability to generate sales from each dollar invested in assets.
C)The total dollar amount of shareholders' equity has increased in each of the three years.
D)Momentum's financing strategy has shifted toward greater relative reliance on investors for funding the company's growth.

Question

Quizplus · Accepted Answer

Momentum's financing strategy shifting toward greater reliance on investors would typically mean an increase in equity financing, which is consistent with an increase in shareholders' equity. Therefore, this choice is not inconsistent with the changes reported.

Which of the Following Is Not Consistent with the Changes