What Is the Difference Between Mechanisms and Policies

question 18

Multiple Choice

What is the difference between mechanisms and policies?

• A) Mechanisms determine what will be done, while policies decide when it will be done
• B) Mechanisms determine how something will be done, while policies decide what will be done
• C) Mechanisms determine how something will be done, while policies decide why something will be done
• D) Mechanisms determine what will be done, while policies decide how it will be done

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Definitions:

Common Stock

It represents shares of ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and adjusted thereafter for the investor's share of the investee's profits or losses.

Operating Cycle

The operating cycle is the duration of time it takes for a company to purchase inventory, sell it to customers, and collect the cash from the sales, reflecting how quickly a company can convert its products into cash.

Readily Marketable

Assets that are considered readily marketable are those that can easily be converted into cash because there is a high demand and an active market for them.