Your friend from Tampa, Florida, Cletus Bumpkin, decided to visit you over the weekend. As you two are talking over dinner, Cletus expresses concern for his upcoming financial accounting exam. Cletus states that the test will mostly cover basic, business 101 topics, but, unfortunately, he attends the University of South Florida (USF) and has received a substandard education thus far. You tell Cletus that you will help him prepare for his exam.

Required: Explain the following to Cletus in simple language (remember, he attends USF):

The various types of businesses and formations.

The three types of business activities.

The difference between public and private companies.

The important positions within a corporate structure.

What financial accounting is about and the purpose of each financial statement (e.g., the Balance Sheet, Income Statement, Statement of Retained Earnings, and the Statement of Cash Flows).