Question

A company has the following accrual-basis balances at the end of its first year of operation: Un-earned consulting fees $ 2,000, Consulting fees receivable 3,500, Consulting fee revenue 25,000. The company’s cash-basis consulting revenue is what amount?

A. $30,500.
B. $19,500.
C. $26,500.
D. $23,500.

Answer 1

D. $23,500.

Step-by-step explanation:

Company’s cash-basis consulting revenue

= Consulting fee revenue - Consulting fees receivable + Unearned consulting fees

= $25,000 - $3,500 + $2,000

= $23,500

Therefore, The company’s cash-basis consulting revenue is $23,500.