Year 19A Year 198 Year 19C Cash collections on sales On 19A Sales On 19B Sales 80,000 15,000 90,000 5,000 30,000 Cash payments for expenses On 19A expenses On 198 expenses 50,000 6,000 7,000 50,000 3,000 14,000 Note: 6,000 payment in 19A was a prepayment on 19B Expenses Year 19A Year 190 Cash basis: Revenue Expenses Net Income cash basis 5 5 Accrual basis: Revenue 3. Expenses 9 Net income accural basis