Question 2 : Suppose that a neighbour leaves town for the months of December 2014 and January 2015 and asks you to collect his mail and newspapers. Before he leaves, he pays you 150. Suppose further that you agree to pay a friend 60 to do the work, but you pay him the end of January 2015 after the work is completed.

Task: Explain the difference between the cash and accrual bases of accounting by measuring your performance.