• i.Explain the role of accruals and prepayments in order to determine the profit for a period on an accrual accounting basis. Use an example of an accrual and an example of a prepayment to demonstrate the difference between profit on an accrual basis and profit on a cash basis.
• ii.Mick is a greengrocer sole trader. At his recent year-end of 31 March 2020, he wishes to include all relevant insurance charges in his business expenses. On 5 March 2020 he paid the quarterly bill of 360 for the months February, March, and April 2020.

  What is the amount of the insurance expense to be included in the income statement for each of the two accounting periods, ending 31 March 2020 and 31 March 2021, with respect to this bill? Show and explain your workings