Which of the Following Statements Best Defines Lean Accounting

question 95

Multiple Choice

Which of the following statements best defines lean accounting?

• A) an accounting system that comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities
• B) a costing method that supports creating value for the customer by costing the entire value stream thereby eliminating waste in the accounting process
• C) an accounting system that omits recording some of the journal entries relating to the stages from the purchase of direct materials to the sale of finished goods
• D) an integrated costing system covering a company's accounting, distribution, manufacturing, purchasing, human resources, and other functions

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Definitions:

Opportunity Cost

The potential benefit that is missed out on when choosing one alternative over another.

Production Possibilities

Production possibilities refer to the different combinations of goods and services that an economy can produce given its available resources and technology, illustrated by the production possibilities frontier (PPF).

Consumer Goods

Products and services that are consumed by individuals or households to satisfy their immediate needs and wants.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing an action.