Question

Which of the following statements is wrong?

• A. Depreciation expense is the lowest for food industry
• B. Power and fuel expenses are 5th largest item in the expenditure of diversified industries.
• C. Electricity industry earns more of other income as a percentage of total income compared to other industries.
• D. Raw material cost is the largest item of expense in all industry sectors

Hint:

Watch for overgeneralizations in data interpretation — “all” or “always” are red flags to verify.

Answer 1

The Correct Option is D

The statement in option (d) is overly broad. In the Electricity sector, for example, the “Power and fuel” cost and “Salary and wages” are significant contributors, while raw material cost is either absent or not the largest in some service-based industries.
Thus, it is incorrect to say raw material is the largest expense in all industry sectors. \[ {\text{(d)}} \]