Multiple Choice
Which of the following is a characteristic of a balance sheet?
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1. Introduction to Accounting
The Financial Statements
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Which of the following accounts would appear on a budgeted balance sheet?
A
Cost of Goods Sold
B
Accounts Receivable
C
Sales Revenue
D
Depreciation Expense
Verified step by step guidance1
Understand the purpose of a budgeted balance sheet: It is a financial statement that projects the financial position of a company at a future date, including assets, liabilities, and equity accounts.
Identify the types of accounts that appear on a balance sheet: Balance sheets include asset accounts (e.g., Accounts Receivable, Cash, Inventory), liability accounts (e.g., Accounts Payable, Loans Payable), and equity accounts (e.g., Retained Earnings, Common Stock).
Analyze the given accounts: Cost of Goods Sold, Sales Revenue, and Depreciation Expense are income statement accounts, not balance sheet accounts. These accounts reflect operational performance rather than financial position.
Recognize that Accounts Receivable is an asset account: It represents money owed to the company by customers for credit sales and is included in the assets section of the balance sheet.
Conclude that Accounts Receivable is the correct answer because it is the only account listed that appears on a budgeted balance sheet.
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