Payment based on the amount of hours worked; must keep track of hours and charge the agreed-upon hourly fee.

Payment based on the amount of hours worked; must keep track of hours and charge the agreed-upon hourly fee.

• A. Net 30
• B. Watermark
• C. Hourly
• D. Fixed fee

Answer: (C)

Time-based billing is used when what you pay depends on how many hours you actually work. In this approach, you track every hour spent on the project and apply the agreed hourly rate to determine the total charge. This fits the description of keeping track of hours and charging the hourly fee you and the client agreed to, and it works well when the amount of work can vary. It’s different from a fixed-fee arrangement, which sets one price regardless of time, and from terms like Net 30, which concern when payment is due rather than how the price is calculated. Watermark has to do with branding or ownership, not how the billing is structured.

Time-based billing is used when what you pay depends on how many hours you actually work. In this approach, you track every hour spent on the project and apply the agreed hourly rate to determine the total charge. This fits the description of keeping track of hours and charging the hourly fee you and the client agreed to, and it works well when the amount of work can vary. It’s different from a fixed-fee arrangement, which sets one price regardless of time, and from terms like Net 30, which concern when payment is due rather than how the price is calculated. Watermark has to do with branding or ownership, not how the billing is structured.