(a) Compare the adjustments necessary on the accounts (income or expense only) of Peter Burrows to reflect: 

(1) A cash-based; and 

(2) An accrual-based accounting system (assume the accounting period is for 12 months ending on 31 December 2018).

(i) Accrued wages and salaries of $1200 are due to be paid on 1 January 2019.
(ii) Peter depreciates his business computer purchased on 1 January 2017 over three years at $800 per annum.
(iii) Insurance premium of $12000 for one year was paid on 1 December 2018.
(iv) A client paid Peter $4000 on 1 September 2018 for work not yet done.
(v) A client owes $2000 for work started and completed in October 2018.
(vi) Peter tendered for work totalling $3600 on 4 December 2018. He has not heard whether or not he has been successful by 31 December 2018.
(vii) Peter paid his quarterly electricity bill of $350 on 30 September 2018.

(b) Discuss why the profit for the period is different depending on whether a cash- or accrual-based accounting system is used. Justify the preference to use accrual-based accounting.