Which of the Following Statements Is Incorrect in Comparing Activity-Based

question 55

Multiple Choice

Which of the following statements is incorrect in comparing activity-based management (ABM) and lean operations?

• A)Both identify value-adding and nonvalue-adding activities
• B)ABM uses a simpler accounting system
• C)Both are activity-based systems
• D)Lean manufacturing reorganizes production activities into workcells

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Definitions:

Contra-Revenue Account

An account that decreases the gross amount of revenue reported on the financial statements, such as sales returns, discounts, and allowances.

Bad Debts Expense

An expense reported on the income statement, representing the amount of accounts receivable that is not expected to be collected.

Partial Balance Sheet

A partial balance sheet presents only a section of a company's financial statements, typically focusing on either assets, liabilities, or equity at a specific point in time.