The correct answer option is 3: "All matter is composed of large particles such as atoms and molecules." This statement is incorrect because matter can be composed of particles that are much smaller than atoms and molecules.

Option 1: "Matter is anything that occupies space" is correct. Matter can exist in various forms and occupies physical space, such as solids, liquids, and gases.

Option 2: "At high temperatures, matter becomes plasma" is also correct. Plasma is a state of matter that is formed when gas is heated to extremely high temperatures, causing the atoms to become highly ionized.

Option 4: "Colloids are made up of larger particles of matter" is also correct. Colloids are a type of mixture where larger particles of one substance are dispersed throughout another substance, such as milk or fog.

It is important to note that matter can be composed of particles that are much smaller than atoms and molecules, such as subatomic particles like protons, neutrons, and electrons. These smaller particles make up atoms, which in turn make up molecules. Therefore, option 3 is not correct.