Multiple Choice
The Cook Corporation has two divisions. Which of the following statements best describes how the financial performance of each division should be evaluated for internal reporting purposes?
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1. Introduction to Accounting
Business Organization
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Which of the following best describes the purpose of a mission statement in a business organization?
A
It provides a list of the company's financial objectives.
B
It outlines the overall purpose and core values of the organization.
C
It details the specific actions a firm will take to achieve its goals.
D
It specifies the organizational chart and reporting structure.
Verified step by step guidance1
Understand the concept of a mission statement: A mission statement is a concise declaration of an organization's purpose, core values, and overarching goals. It serves as a guiding principle for decision-making and strategy development.
Analyze the options provided in the question: Review each option to determine which aligns with the definition and purpose of a mission statement.
Option 1: 'It provides a list of the company's financial objectives.' Evaluate this option and recognize that financial objectives are specific goals, not the overarching purpose or values of the organization.
Option 3: 'It details the specific actions a firm will take to achieve its goals.' Understand that this describes a strategic plan or operational plan, not a mission statement.
Option 4: 'It specifies the organizational chart and reporting structure.' Note that this pertains to organizational design, not the purpose or values outlined in a mission statement. Therefore, the correct answer is Option 2: 'It outlines the overall purpose and core values of the organization.'
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