Which of the Following Statements Is CORRECT

question 32

Multiple Choice

Which of the following statements is CORRECT?

• A) A firm's corporate purpose states the general philosophy of the business and provides managers with specific operational objectives.
• B) Operating plans provide management with detailed implementation guidance, consistent with the corporate strategy, to help meet the corporate objectives. These operating plans can be developed for any time horizon, but many companies use a 5-year horizon.
• C) A firm's mission statement defines its lines of business and geographic area of operations.
• D) The corporate scope is a condensed version of the entire set of strategic plans.
• E) Once a firm has defined its purpose, scope, and objectives, it must develop a strategy or strategies for achieving its goals. The statement of corporate strategies sets forth detailed plans rather than broad approaches for achieving a firm's goals.

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Definitions:

Indirect Method

An accounting practice used to prepare the cash flow statement, where net income is adjusted for non-cash transactions and changes in working capital to calculate cash flow from operating activities.

Net Income

The total revenue minus total expenses, representing the company's profit.

Operating Activities

These are the primary day-to-day activities of a business that relate to its production, sales, and deliveries of its products and services.

Prepaid Insurance

An asset account that represents the amount paid for insurance coverage in advance of the service period.