Time: About 10 minutes.

Exhibit H shows Harbor Oak’s July 2025 results twice: once on the cash basis and once on the accrual basis.

1. Compare the Total Income and Net lines in the two columns.
2. Find the three lines with the largest differences.
3. For each, decide whether the difference comes from timing (when cash moved) or from something that never appears on one of the two reports.

Keep Exhibit H open for the Lesson 2 Quiz.