Year 19A Year 19B Year 190 Cash collections on sales On 19 A Sales On 19B Sales 80,000 15,000 90,000 5,000 30,000 Cash payments for expenses On 19A expenses On 19B 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 19B Cash basis: Revenue Expenses Net income cash basis Accrual basis: Revenue Expenses Net income accural basis