Answer:
1. Cash balance will decrease
2. Cash-basis net income will decrease
3. Accrual-basis net income will decrease
Explanation:
$900 was paid to the workers by the company in May for $600 work performed in April and $300 in May. If the company follows cash basis, then cash balance will reduce by $900. If the company follows accrual-basis, then cash balance will reduce by $300.
Cash basis net income will decrease by $900 while accrual basis net income will reduce by $300 as $600 would have been accounted in April.