Based on the annual financial statements of Raheem Company, which of the following would most likely be reported on the statement of financial position (balance sheet)?

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

Answer: (C)

Verified step by step guidance

1. Understand the purpose of the statement of financial position (balance sheet). It reports a company's assets, liabilities, and equity at a specific point in time, showing what the company owns and owes.
2. Identify the nature of each item listed in the problem: Sales Revenue, Dividends Declared, Accounts Receivable, and Cost of Goods Sold. Determine whether each item is an asset, liability, or equity, or if it belongs to another financial statement.
3. Recognize that Sales Revenue and Cost of Goods Sold are components of the income statement, as they represent the company's performance over a period of time rather than its financial position at a specific point.
4. Understand that Dividends Declared are typically reported on the statement of changes in equity, as they represent distributions to shareholders and affect retained earnings rather than the balance sheet directly.
5. Identify Accounts Receivable as an asset, representing money owed to the company by customers for goods or services provided. Since assets are reported on the balance sheet, Accounts Receivable would most likely be included in the statement of financial position.