The accruals basis, in relation to income, means that income is recognised in each accounting period, not in accordance with the amount received in the period, but in accordance with the amount earned in the accounting period.

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(a) Commission earnings (b) Interest receivable (c) Rent receivable (d) Commission earnings (e) Interest receivable (f) Rent receivable Statement of financial position - 31.12.2009 Asset Liability £50 £100 - £120 £100 £500 £150 I During the year ended 31.12.2010 Receipts £565 £900 £1,300 £1,600 £1,300 Income £1,000 £1,500 £6,000 Statement of financial position - 31.12.2010 Asset Liability £35 £100 £250 £500