Multiple Choice
Which type of business organization is easy to create but comes with unlimited liability for its owner?
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1. Introduction to Accounting
Business Organization
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which term best describes a company's purpose, its reason for being, and the problem it is solving?
A
Balance sheet
B
Mission statement
C
Organizational chart
D
Dividend policy
Verified step by step guidance1
Understand the concept of a 'Mission Statement': A mission statement defines a company's purpose, its reason for existence, and the problem it aims to solve. It provides clarity on the organization's goals and values.
Review the other options provided: A balance sheet is a financial statement showing a company's assets, liabilities, and equity at a specific point in time. An organizational chart outlines the structure of a company, showing roles and relationships. Dividend policy refers to the company's approach to distributing profits to shareholders.
Compare the options: None of the other options (balance sheet, organizational chart, dividend policy) describe the company's purpose or reason for being. They are more focused on financial or structural aspects.
Identify the correct term: The mission statement is the only option that aligns with the definition of a company's purpose and the problem it is solving.
Conclude that the correct answer is 'Mission Statement' based on the explanation and comparison of the options.
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