1. Why are large corporations often described as publicly owned?

2. Distinguish between corporations and sole proprietorships in the terms of the following charactistics.

a. Owners liability for debts of the business.

b. Transferability of ownership interest

c. Continuity of existence

d. Federal taxation on income

3. Distinguish between paid-in capital and retained earnings of a corporation. Why is such a distinction useful?

4. State the balance sheet or income statement classification (asset, liability, stockholders equity, revenue, or expense) of each of the following accounts.

CLASS STATEMENTS

For eg Cash Asset A/c Balance Sheet

Accounts Payable Liability

Capital .. O/E

Furniture

Rent

Drawings

Supplies

Prepaid or Unexpired Insurance

Depreciation

Accumulated Depreciation

SERVICE REVENUE

5. What is the purpose of a stock split?