Which of the following is listed on the pro forma balance sheet?

• A. Cost of Goods Sold
• B. Accounts Receivable
• C. Dividends Declared
• D. Sales Revenue

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the purpose of a pro forma balance sheet. A pro forma balance sheet is a financial statement that projects the financial position of a company at a future date, based on assumptions and estimates. It includes assets, liabilities, and equity accounts.
2. Step 2: Review the components of a balance sheet. A balance sheet is divided into three main sections: assets, liabilities, and equity. Accounts Receivable is classified as a current asset, while Cost of Goods Sold, Dividends Declared, and Sales Revenue are not part of the balance sheet but are part of the income statement or statement of retained earnings.
3. Step 3: Identify the correct classification for each option provided. Accounts Receivable is listed under current assets on the balance sheet. Cost of Goods Sold and Sales Revenue are part of the income statement, and Dividends Declared is part of the statement of retained earnings.
4. Step 4: Confirm that Accounts Receivable is the correct answer. Since it is a current asset, it is listed on the pro forma balance sheet, while the other options are not.
5. Step 5: Conclude that understanding the distinction between financial statements (balance sheet, income statement, and statement of retained earnings) is essential for correctly identifying where each account is reported.