Which of the following statements is TRUE about the activities for Maverick Law Firm for 2010?
A) If Accounts receivable prior to February 1, 2010 was $25,000, the amount of Accounts Receivable to be reported on the Balance Sheet at December 31, 2010 will be $24,000.
B) The $2,000 received from clients for law services to be performed next year will be reported as revenue on the Income Statement this year since cash was received.
C) The $4,000 billed to clients for services rendered this year and unpaid as of December 31 will be reported on the Balance Sheet at December 31 as Accounts Payable.
D) The $5,000 received this year from clients in payment of their accounts will be reported on the Income

Question

Quizplus · Accepted Answer

Option A is true because accounts receivable at the beginning of the year ($25,000) will decrease due to collections, but some new accounts may have been added. Therefore, the ending balance of accounts receivable may not be $25,000. The actual ending balance would be dependent on various transactions affecting accounts receivable during the year.

Which of the Following Statements Is TRUE About the Activities