Use T or F to indicate whether each of the following statements is true or false. Change each false statement into one that is true.
1. A large cash balance is the best evidence of previous profitable operations.
2. Accounts receivable should be classified as a liability.
3. Machinery used in the business should be recorded at replacement cost.
4. It is not possible to determine changes in the condition of a business from a single balance sheet.
5. From a single balance sheet, you can find stockholders’ equity for a period of time but not for a specific day.
6. Retained earnings is just one part of stockholders’ equity.