Hanker LLC uses the accrual basis to keep his accounting records. During 2018, he collected $374,000 from clients. At December 31, 2017 he had accounts receivable of $139,000. At December 31, 2018 he had accounts receivable of $164,000 and unearned revenue of $41,000. What did Hanker LLC earn in service revenue for 2018 using the accrual basis of accounting?
A) $194,000
B) $308,000
C) $349,000
D) $358,000

Question

Quizplus · Accepted Answer

To calculate the service revenue earned using the accrual basis, start with the cash collected ($374,000), add the increase in accounts receivable ($164,000 - $139,000 = $25,000), and subtract the unearned revenue ($41,000). This results in $374,000 + $25,000 - $41,000 = $358,000.

Hanker LLC Uses the Accrual Basis to Keep His Accounting