According to Lean accounting, the way we increase profit is by:

Creating more cushion in the budgets

Lean Training Quiz On Finance Module! Trivia

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Quizzes Created: 5 | Total Attempts: 837

Questions: 10 | Attempts: 112 | Updated: Mar 17, 2023

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Lean Training Quiz On Finance Module! Trivia - Quiz

Lean training quiz on finance module! Lean accounting is a way in which the business changes its accounting module so that it can fit the lean manufacturing method. There are different changes that are evident when traditional accounting systems are compared to lean accounting techniques such as using less time and money associated with the tradition method. See how well you understand lean accounting by taking the quiz. All the best!

Questions and Answers

1.

According to Lean accounting, the price is determined by the _______________.
- A.
  
  Accounting Department
- B.
  
  Customer
- C.
  
  Marketing Department
- D.
  
  Government
Correct Answer
B. Customer

Explanation
The customer determines value, so the customer sets the price.

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2.

According to Lean accounting, the way we increase profit is by:
- A.
  
  Raising the price
- B.
  
  Decreasing pay
- C.
  
  Lowering costs
- D.
  
  Creating more cushion in the budgets
Correct Answer
C. Lowering costs

Explanation
Since we do not touch price (since the price is determined by the customer), we increase profit by lowering costs through the elimination of waste.

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3.

As a company implements Lean, it’s financial statements often show a temporary hit to the bottom line as inventory moves to the expense section of the income statement, lowering profits.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
This is one reason Lean accounting has evolved – to more accurately show the benefits of Lean improvements in companies.

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4.

Taiichi Ohno said: “Costs do not exist to be calculated. Costs exist to be ________.”
- A.
  
  Defined
- B.
  
  Measured
- C.
  
  Analysed
- D.
  
  Reduced
Correct Answer
D. Reduced

Explanation
While we do need to quantify waste to remove it and to be able to measure the benefits, a lot of accounting practices are processing and overproduction waste. Lean accounting seeks to simplify accounting to ensure that metrics are visible and transparent to ALL.

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5.

As a product or service moves through the production system, the cost of correcting an error multiplies by 10. This is known as the _______ rule.
- A.
  
  DMARIC
- B.
  
  1-10-100
- C.
  
  Pareto
- D.
  
  80 / 20
Correct Answer
B. 1-10-100

Explanation
The 1-10-100 rule states that rework waste gets more and more expensive to fix as it moves downstream.

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6.

Space can be maximised by reducing what kind of waste(s)?
- A.
  
  Motion
- B.
  
  Inventory
- C.
  
  Waiting
- D.
  
  Re-work
Correct Answer(s)
A. Motion
B. Inventory

Explanation
Motion & inventory are the two wastes that most lead to wasted space. Inventory just simply takes up space. And, if you can reduce motion waste and place people and their machines in locations to ensure flow, you simply need less space! Maximizing space can save a lot of money.

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7.

A more detailed and thorough version of the Plan, Do, Check Act / Kaizen cycle that we use for quantifying and implementing process improvement activities is:
- A.
  
  1-10-100
- B.
  
  DMARIC
- C.
  
  Pareto
- D.
  
  Six Sigma
Correct Answer
B. DMARIC

Explanation
Define, Measure, Analyse, Recommend, Improve (or Implement), Control. It is important to set a scope, measure the processes within it, and analyze the work (including root cause analysis) before recommending process improvement activities. We need to be able to demonstrate ROI and to measure the future state based on the as-is benchmark.

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8.

Another term for “the law of the vital few” is _______.
- A.
  
  The Pareto principle
- B.
  
  Lean Accounting
- C.
  
  The 1-10-100 Rule
- D.
  
  The Customer Service Iceberg
Correct Answer
A. The Pareto principle

Explanation
The Pareto principle, also known as the 80 / 20 rule, asserts that 80% of the effects come from 20% of the causes. Pareto analysis is used to target products, service families or processes for improvement initiatives.

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9.

A dollar saved is a whole dollar just as a dollar earned is a whole dollar.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
A dollar saved IS a whole dollar but a dollar earned is NOT a whole dollar; To make a dollar, we need to spend money (the cost to sell).

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10.

The cost to serve equals the hourly rate an employee is paid.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
The cost to serve includes labor, other compensation, training, management infrastructure, and many other inputs.

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Lean Training Quiz On Finance Module! Trivia

According to Lean accounting, the price is determined by the _______________.

According to Lean accounting, the way we increase profit is by:

As a company implements Lean, it’s financial statements often show a temporary hit to the bottom line as inventory moves to the expense section of the income statement, lowering profits.

Taiichi Ohno said: “Costs do not exist to be calculated. Costs exist to be ________.”

As a product or service moves through the production system, the cost of correcting an error multiplies by 10. This is known as the _______ rule.

Space can be maximised by reducing what kind of waste(s)?

A more detailed and thorough version of the Plan, Do, Check Act / Kaizen cycle that we use for quantifying and implementing process improvement activities is:

Another term for “the law of the vital few” is _______.

A dollar saved is a whole dollar just as a dollar earned is a whole dollar.

The cost to serve equals the hourly rate an employee is paid.