When a firm adopts 'Lean Accounting', it primarily tries to: MCQ with Answer and Explanation

When a firm adopts 'Lean Accounting', it primarily tries to:

A. Under-report profits to save tax

B. Stop issuing balance sheets

C. Reduce the number of accountants

D. Eliminate waste and align accounting processes with lean manufacturing principles

Answer: Option D

Solution (By JKExamLibrary)

Lean accounting supports lean manufacturing by eliminating complex, non-value-adding accounting transactions and focusing on value stream costing.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Practice More Accountancy and Book Keeping Questions

Question #1 Report Error

S1: A Journal Voucher is used for non-cash transactions. S2: A Contra Voucher is used for cash and bank transactions. Which statement(s) is/are correct?

A. Both S1 and S2

B. Neither S1 nor S2

C. S2 only

D. S1 only

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Correct Answer: Option A

Explanation:
A Journal Voucher (or Transfer Voucher) is used for internal adjustments and non-cash transactions like depreciation. A Contra Voucher is used for transactions involving both cash and bank, like depositing cash into the bank. Both are correct.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2 Report Error

The 'Stratified Sampling' in audit is used to:

A. Select a representative sample from sub-populations

B. Audit only large value items

C. Select all items

D. Ignore sampling

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Correct Answer: Option A

Explanation:
Stratification divides population into subgroups with similar characteristics to improve audit efficiency.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3 Report Error

Under the Companies Act 2013, a 'Small Company' is defined based on paid-up share capital and turnover. As per the latest amendments, the paid-up share capital should not exceed:

A. ₹50 Lakhs

B. ₹10 Crores

C. ₹1 Crore

D. ₹4 Crores

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Correct Answer: Option D

Explanation:
The Companies (Specification of Definition Details) Amendment Rules, 2021, increased the paid-up share capital limit for a Small Company to ₹4 Crores (or ₹10 Crores as per turnover, whichever is lower, but the capital limit was raised to ₹4 Cr).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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