A. This question is essentially a statement of cash flows question working backwards from cash collected from customers to revenue. The cash collected was $200,000. However, the beginning receivables of $40,000 were collected in 2005, but the revenue was from 2004 so this is not included in the revenue for 2005. The ending receivables of $60,000 were not collected in 2005, but were earned in 2005, so this needs to be added to the cash collected. This gives Jessica $220,000 of revenue before adjusting for unearned fees. This unearned revenue was collected in 2005, but was not earned in 2005 so it needs to be subtracted. This gives a revenue for 2005 of $215,000.

B. This answer treats the unearned revenue incorrectly. See the correct answer for a complete explanation.

C. This answer results from reversing the signs on the beginning and ending accounts receivable balances. See the correct answer for a complete explanation.

D. This answer is incorrect. See the correct answer for a complete explanation.