What Is the Primary Difference Between a Policy and a Procedure

question 7

Multiple Choice

What is the primary difference between a policy and a procedure?

• A) A policy focuses on the organization as a whole, but a procedure focuses only on a single department.
• B) A policy sets a broad guideline, but a procedure defines precise actions to be taken.
• C) A policy is a single-use plan, but a procedure is a standing plan.
• D) A policy identifies short-term directions for the organization, but a procedure identifies long-term directions.
• E) A policy guides fair employment, but a procedure guides ethical principles.

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Definitions:

Common Stock

A type of security that represents ownership in a corporation, granting holders voting rights and a share in the company's profits via dividends.

Organization Expenses

Costs incurred in the formation of a corporation, partnership, or other business entity, typically including legal and registration fees.

Paid-in Capital

The amount of money that a company has received from shareholders in exchange for shares of stock, beyond the par value of the shares.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders, often used for reinvestment in the business or to pay off debt.