What you'll learn
How limited companies record and share profit.
Key ideas
- Companies are owned by shareholders with limited liability and run by directors.
- Dividends are paid to shareholders; retained earnings stay in the business.
- Share capital, preference shares and debentures (long-term loans).
Exam tips
- Explain what limited liability means.
- Distinguish shares from debentures.
Common mistakes
- Confusing dividends with drawings.
- Mixing up shares and debentures.