TLR Consulting Keep Their Accounting Records Using the Accrual Basis

question 181

Multiple Choice

TLR Consulting keep their accounting records using the accrual basis. During 2018, they collected $425,000 from clients. On December 31, 2017 they had accounts receivable of $61,000 and on December 31, 2018 they had accounts receivable of $46,000. Additionally, they had unearned revenues of $7,000. Using the accrual basis of accounting, what did TLR Consulting earn in service fees for 2018?

• A) $403,000
• B) $417,000
• C) $433,000
• D) $447,000

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Definitions:

Direct Labour Hours

The hours worked by employees directly involved in the manufacturing process, used to allocate labor costs to products.

Hotel Industry

A segment of the hospitality sector that focuses on providing lodging facilities and other related services to travelers and guests.

Activity-Based Costing (ABC)

A method of allocating overhead and indirect costs based on the activities that drive these costs, with the aim of providing more accurate product costing.

Common Costs

Expenses incurred in the production of multiple products or delivery of multiple services that cannot be directly attributed to any individual product or service.