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.