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Verb tenses: The verb tense must correspond to the appropriate time upon which that verb is based. The sentence provides the appropriate time, and the verb must match this in tense (such as present simple, present progressive, past simple, etc.)
Subject/verb agreement: There are several manners in which the GMAT can make a test taker trip up in terms of the subject and verb not agreeing such as separating the subject from the verb with many extra words in between or placing the verb before the subject, or even making the subject a pseudo plural noun, therefore confusing the test taker as to whether the subject i s singular or plural. These are just three examples of subject verb agreement issues.
Modifiers: Also known as the “misplaced modifier” or, correctly, the dangling participle. For example, you might see a sentence like “Looking out the window, the trees were seen by her.” The modifier in this sentence is “Looking out the window,” and it needs to be followed by the subject, the doer of the sentence. Since the trees aren’t looking out the window here, the construction is illogical. A correct version would be: “Looking out the window, she saw the trees.” There are several types of modifiers that can be tested such as “Verb-ing” modifiers, V3 modifiers (past participles), clauses or adjectival phrases, and these can be tested in terms of grammar, meaning and logic.
Comparisons: Comparisons must be correct in terms of grammatical structure and must also be logical—that is, the items being compared must be of the same type. Consider this example: “Bob liked the movie better than Jerry.” This sentence would be wrong, as it compares “movie” to “Jerry” and is therefore ambiguous, too: Does Bob like the movie more than Jerry likes the movie or does Bob like the movie more than he likes Jerry? Very different things! Correctly stated, it would read: “Bob liked the movie better than Jerry did.”
Pronouns: Unless you have encountered an “empty pronoun” (it is raining), a pronoun replaces a specific antecedent and must be the same as that antecedent: singular, plural, subject, object, etc. The noun that the pronoun replaces must also be logical meaning-wise, and a pronoun should only grammatically and logically refer to one noun.
Idioms: Common GMAT idioms to be familiar with include “prohibit X from Y”, “not only […] but also […]”, “neither […] nor […]”, and “just as […], so too […]”. The GMAT has been decreasing its testing of these word usage issues, but we still advise being familiar with the most common ones.
Clarity: Is the sentence or any of its elements ambiguous in any way? Does the correct answer convey the intended meaning or is the meaning changed negatively? Is the meaning and sentence structure clear altogether or awkward?

How to work through these answer options using a hierarchy of error types:

1. Scan for grammatical errors

If there are any grammatical or logical/meaning errors in the underlined portion of the passage, immediately eliminate any of the answer options that repeat the error in the original sentence. BUT make sure that the answer choices have not actually made that error a non error by fixing some other portion of the sentence!

2. Check for stylistic issues

Stylistic issues include, but are not limited to, the use of the passive voice, awkwardness in certain word usage such as ‘being’, and redundancies. Important: You will need to distinguish between options that must be eliminated (for example, repetitive redundancies) and options that don’t have to be eliminated (for example, certain ambiguities).

3. Has there been any change in the meaning of the original sentence in remaining answer options?

If so, they’re normally out. If the change is nuanced, such an answer choice can still be correct. More than this an answer choice can change the meaning but actually FIX the intended meaning of the original sentence too!

4. Last step: Consider whether the whole underlined portion fits into the sentence.

A classic amateur mistake on the GMAT is to try this with every single answer option before removing the answer options that clearly won’t work. Make sure you plug in the whole answer option as a last step just to make sure you have not missed anything- too many people concentrate only on the underlined portion.

Let’s apply these rules to the sample question above.

There are many things to note about this question. Look at the difference between A and B. A has “the reason…is that…” while B has “the reason…is because…” This is an example of redundancy. Eliminate B. The correct expression is “the reason is that”.
Your first reaction to A may be there does not seem to be any grammatical error, but that it sounds awkward. If so, you are right. It is awkward. “Sales are alarmingly declining” is not as good as “sales are declining alarmingly”. Look for an option that will resolve this. How about E then? E also has “the reason …is that…” E has another point in its favor. It eliminates the awkwardness of A by placing the adverb after the verb – “sales are declining alarmingly”. If you were in a hurry, you may well have gone for E at this point. However, notice the other subtle difference between A and E. E has “the design departments knows”. This is a clear grammatical error. But unless you were reading very carefully, you may have skipped this error and selected E. This should be immediately eliminated for the grammatical error. So A is still better so far.
D repeats the awkward structure of A, and also replaces “and” with “ as well as”. “As well as” is considered more wordy than “and”. Eliminate D.
We are left with A and C. C is the correct answer, as it removes the awkwardness of A. “The alarming decline in sales” is stylistically better than “sales are alarmingly declining”. Notice that C is actually longer than A by one word. You have often been told to select the shorter option. This is an example of a case in which that strategy would lead you to a wrong answer. It is very important to eliminate awkward options. Conciseness is only better if it improves the sentences and a one word difference is not very substantial.