If all of Gaylord Corporation's sales are on account, which type of receivable will most likely be reported on its balance sheet?

• A. Dividends Receivable
• B. Interest Receivable
• C. Notes Receivable
• D. Accounts Receivable

Answer: (D)

Verified step by step guidance

1. Understand the nature of the problem: The question is asking which type of receivable is most likely to be reported on the balance sheet if all sales are on account. This requires knowledge of the different types of receivables and their definitions.
2. Define 'Accounts Receivable': Accounts Receivable represents amounts owed to the company by customers for goods or services sold on credit. It is the most common type of receivable for sales made on account.
3. Clarify the other types of receivables: Dividends Receivable refers to dividends declared by another company but not yet received. Interest Receivable refers to interest earned but not yet collected. Notes Receivable refers to amounts owed under formal written agreements, often including interest.
4. Analyze the scenario: Since the problem states that all sales are on account, this means customers are purchasing goods or services on credit, which directly corresponds to Accounts Receivable.
5. Conclude the reasoning: Based on the definitions and the scenario provided, the receivable most likely to be reported on the balance sheet is Accounts Receivable, as it directly relates to credit sales.