TRUE or FALSE:

1. Owners in a sole proprietorship or a partnership can be held personally liable for debts the company has incurred, over and beyond the investment they have made.

2. An S corporation allows a company to enjoy limited liability as a corporation, but tax treatment as a partnership.

3. Treasury stock is the repurchase of a company's own issued stock.

4. If a company purchases shares of another company, it records this transaction as treasury stock.

5. Stock repurchases reduce the number of shares outstanding, thereby increasing earnings per share.

6. Dividends are paid on all shares issued by the company including treasury stock.

7. A stock split has no effect on the total of any account in stockholders' equity.

8. The number of shares outstanding is equal to the number of shares issued minus the number of treasury shares.

9. Earnings per share (EPS) measures the net income earned per share of common stock outstanding.

10. We calculate earnings per share as net income divided by the average shares outstanding during the period.