Response to the following problem:
eBay Conquers the Online Marketplace Cleaning out your closet and finding things you don't need? Don't trash it, eBay it! From its beginning in 1995, eBay has become an integral part of today's society, boasting 222 million registered users as of December 31, 2006. Innovative thinking has fueled eBay's dynamic growth of its online marketplace, where individuals and businesses bought and sold a staggering $52 billion worth of goods during 2006. eBay is more than just an online marketplace. The company has been quick to identify and purchase companies that have developed services that take advantage of the Internet. PayPal, purchased in 2002, provides a platform for the online payment of eBay transactions. Purchased in 2005, Skype provides voice and video communications. Shopping.com provides comparison shopping for new products, and Rent.com lists apartments from more than 20,000 properties. With every change in its business, eBay must change its accounting system. New accounts and different methods for combining those accounts are required to create financial statements.
Critical Thinking:
1. Many businesses begin as a sole proprietorship and later transform into a corporation. What changes might occur in the chart of accounts when a business changes from being a sole proprietorship to a corporation?
2. Identify another business that has experienced changes in its corporate structure. What motivated the change(s)?