TRUE OR FALSE QUESTIONS.

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1. A corporation is a separate legal entity from its owners.

2. In a corporation, authorized stock can be defined as the total number of shares outstanding.

3. Common stock always carries a preference for receiving dividends over preferred stock.

4. A privately held corporation usually has only a few stockholders, and does not offer its stock for sale to the general public.

5. Earnings per share is calculated by dividing the total number of common shares outstanding by net income.

6. The financial term P & E refers to a share of stocks profit-to-earnings ratio.

7. The price-earnings ratio reveals information about the stock market's expectations for a company's future growth in earnings, dividends and economic opportunities.

8. A debit balance in the Retained Earnings account is identified as a deficit.