Question

Requirement 1. Indicate whether each of the following statements is true or false. For each false statement, explain why it is false. Use Tor 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. Requirement 1. Indicate whether each of the following statements is true or false. For each false statement, explain why it is false. (Abbreviations used: SE = Stockholders' equity, RE = Retained earnings) Begin by analyzing statements 1. through 3. in this step, and then analyze statements 4. through 6. in the next step. 2.

Answer 1

Cordova Leuming Series - Maths Lab Manuel..... shown 2). False Reagon = Because Account Receivables are under current assets at Assets side.. false Reason = Machinery used in the business should not be recorded at replacement cost, - it should be recorded at written clown Jabre Ч. Тэтче Reason Changes in the condition of business from single balance sheed is not possible - because to recould the change we require - a Balance sheet of two clates for comparision - + Analysis purpose. False Reason from a single Balance x heet, we find stockholder's Equity at specific day. but not for a period of time 5) Tolue Reason = Retoined Earning is just one Part of share holders Equity Retained Earning is made therough the profits of the Company. 4 Share Premium eapital Reserve is also part of Equity.