Choice "C" is correct. Cash-basis consulting revenue is $23,500. This amount includes the $2,000 in cash received recorded as unearned consulting fees plus $21,500 in cash received from consulting services provided during the period. The cash received from consulting services provided during the period can be calculated by analyzing the changes in the consulting fees receivable account during the period:
Beginning consulting fees receivable | $0 |
Plus: Accrual basis consulting fee revenue | 25,000 |
Less: Cash collections | ??? | ← $21,500 |
Ending consulting fees receivable | $3,500 |
Choices "d", "b", and "a" are incorrect, per the above.
