Multiple Choice
Which of the following aspects relate to the information provided in an income statement?
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1. Introduction to Accounting
The Financial Statements
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Which of the following items would be found on a company's balance sheet?
A
Cost of Goods Sold
B
Dividends Declared
C
Accounts Receivable
D
Sales Revenue
Verified step by step guidance1
Step 1: Understand the purpose of a balance sheet. A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It includes assets, liabilities, and equity.
Step 2: Identify the categories of items typically found on a balance sheet. Assets (e.g., cash, accounts receivable, inventory), liabilities (e.g., accounts payable, loans), and equity (e.g., retained earnings, common stock) are included.
Step 3: Analyze the given items to determine which belong on the balance sheet. Cost of Goods Sold and Sales Revenue are part of the income statement, as they relate to the company's performance over a period of time. Dividends Declared are part of the statement of retained earnings, not the balance sheet.
Step 4: Recognize that Accounts Receivable is an asset. It represents money owed to the company by customers for goods or services provided on credit, and it is listed under the 'Assets' section of the balance sheet.
Step 5: Conclude that Accounts Receivable is the correct answer because it is the only item among the options that appears on the balance sheet.
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