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.

---

Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting its liquidity.

Financial Statements

Summarized records of a company's financial activities over a specific period, including income statement, balance sheet, statement of cash flows, and statement of changes in equity.

Operating Activities

Operating activities involve the day-to-day functions of a business related to producing and selling its goods or services, reflected in the cash flows from operating activities in financial statements.

Investing Activities

Financial transactions involving the acquisition or disposal of long-term assets and investments not related to the company's primary business operations.