Which of the Following Descriptions Best Explains the Difference Between

question 41

Multiple Choice

Which of the following descriptions best explains the difference between a billing system and a costing system for a service firm?

• A) A costing system accumulates the amounts that the service costs the firm to provide.
• B) A billing system estimates the fees to be charged to the client for the service based on chargeout rates per billable hour.
• C) A billing system accumulates the amounts that the client is to be charged for the service rather than the costs of the service.
• D) A billing system estimates the fees to be charged to the client for the service based on chargeout rates per billable hour AND a billing system accumulates the amounts that the client is to be charged for the service rather than the costs of the service.

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Definitions:

Consideration

Consideration, an essential element of a valid contract, consists of the exchange of something valuable between parties, which compels them to enter into an agreement.

Statute Of Limitations

Laws that set the maximum time after an event within which legal proceedings may be initiated.

Creditor

A person to whom a debt or legal obligation is owed and who has the right to enforce payment of that debt or obligation.

Consideration

Something of value (such as money, goods, or services) that is exchanged between parties in a contract, making the agreement legally binding.