State some of the differences between adjusting entries and rectifying entries.

Indentify each of the following statement is true or false.

(1) Profitability ratios measures the short term ability of the company to pay its obligations and to meet unexpected needs for cash.
(2) An account is an accounting record of either a specific assets or a specific liability.
(3) Adjusting entries are required by the cost principle of accounting.
(4) Recognizing depreciation on an asset results in an accumulation of cash for the replacement of the assets.
(5) The historical cost principle dictates that companies record assets at their cost and report them at fair market value over the time the assets are held.