PB 2. LO 4.1 To demonstrate the difference between cash account activity and accrual basis profits (net income), note the amount each transaction affects cash and the amount each transaction affects net income. issued stock for cash $20,000 purchased supplies inventory on account $1,800 paid employee salaries; assume it was current days expenses $950 paid note payment to bank (principal only) $1,200 collected balance on accounts receivable $4,750