Which of the following descriptions best explains the difference between a billing system and a costing system for a service firm?
A) A costing system accumulates the amounts that the service costs the firm to provide.
B) A billing system estimates the fees to be charged to the client for the service based on chargeout rates per billable hour.
C) A billing system accumulates the amounts that the client is to be charged for the service rather than the costs of the service.
D) A billing system estimates the fees to be charged to the client for the service based on chargeout rates per billable hour AND a billing system accumulates the amounts that the client is to be charged for the service rather than the costs of the service.

Question

Quizplus · Accepted Answer

A billing system is focused on determining and tracking what to charge clients, often based on billable hours or other chargeout rates, while a costing system is concerned with tracking the actual costs incurred by the firm in providing its services. Option D combines both key aspects of a billing system, making it the most comprehensive choice.

Which of the Following Descriptions Best Explains the Difference Between