b)To do a bank reconciliation you would match the cash balances on the balance sheet to the corresponding amount on your bank statement, determining the differences between the two in order to make changes to the accounting records, resolve any discrepancies and identify fraudulent transactions.

1. COMPARE THE DEPOSITS

Match the deposits in the business records with those in the bank statement. Compare the amount of each deposit recorded in the debit side of the bank column of the cashbook with credit side of the bank statement and credit side of the bank column with the debit side of the bank statement. Mark the items appearing in both the records.

2. ADJUST THE BANK STATEMENTS

Adjust the balance on the bank statements to the corrected balance. For doing this, you must add deposits in transit, deduct outstanding checks and add/deduct bank errors.

Deposits in transit are amounts that are received and recorded by the business but are not yet recorded by the bank. They must be added to the bank statement.

Outstanding checks are those that have been written and recorded in cash account of the business but have not yet cleared the bank account. They need to be deducted from the bank balance. This often happens when the checks are written in the last few days of the month.

Bank errors are mistakes made by the bank while creating the bank statement. Common errors include entering an incorrect amount or omitting an amount from the bank statement. Compare the cash account’s general ledger to the bank statement to spot the errors.

3. ADJUST THE CASH ACCOUNT

The next step is to adjust the cash balance in the business account.

Adjust the cash balances in the business account by adding interest or deducting monthly charges and overdraft fees.

To do this, businesses need to take into account the bank charges, NSF checks and errors in accounting.

• Bank charges are service charges and fees deducted for the bank’s processing of the business’ checking account activity. This can include monthly charges or charges from overdrawing your account. They must be deducted from your cash account. If you’ve earned any interest on your bank account balance, they must be added to the cash account.
• An NSF (not sufficient funds) check is a check that has not been honored by the bank due to insufficient funds in the entity’s bank accounts. This means that the check amount has not been deposited in your bank account and hence needs to be deducted from your cash account records.
• Errors in the cash account result in an incorrect amount being entered or an amount being omitted from the records. The correction of the error will increase or decrease the cash account in the books.

4. COMPARE THE BALANCES

After adjusting the balances as per the bank and as per the books, the adjusted amounts should be the same. If they are still not equal, you will have to repeat the process of reconciliation again.

Once the balances are equal, businesses need to prepare journal entries for the adjustments to the balance per books.

C)

Buying shares is a financial engineering tool. It can be defined as a process allowing a company to return to its shareholders and offer to buy the shares they own.

Buyback helps an organization make better use of its funds than by reinvesting those funds at a lower average rate into the same company or by needless divergence or purchasing growth through expensive acquisitions.

Benefits

1. Companies that are below their average industry profitability enjoy better share price appreciation after purchasing shares than companies with profitability above their industry average.

2. Companies whose sales growth was below their industry average had a higher share price rise after the repurchase of shares than those whose sales growth was above their industry average.

3. Rentable and development businesses that repurchase shares are a direct indicator to investors of the company’s strengths.

4. Repurchasing businesses with lower debt ratios but sales growth rates above their average industry report significantly higher share price growth following repurchase than firms with above-average debt ratios but sales growth below their industry average.

5. Repurchasing companies with returns and debt ratios below their industry average display better share price growth after repurchasing than companies with income and debt ratios above their industry average.

Drawbacks

For the following reasons, the repurchase of shares is criticised:

1. This might encourage unscrupulous promoters to use the money of the company to increase their stakes.

2. It opens up opportunities to control share prices.

3. It could distract the funds of the organisation from productive investments.

D)Accounting profit, also referred to as income before taxes, is reported on a company's income statement in accordance with the prevailing accounting standards. Taxable income is the portion of a company's income that is subject to income taxes in accordance with the tax laws of the jurisdiction.

Differences between accounting profit and taxable income can occur in several ways, inclusive of the following:

• Revenues and expenses may be recognized in one reporting period for tax purposes and in another period for accounting purposes;
• Specific revenue and expense items may be either not recognized for accounting purposes but recognized for tax purposes, or alternatively, recognized for accounting purposes but not recognized for tax purposes;
• The tax base and carrying amount of assets and/or liabilities may differ;
• The deductibility of gains and losses of assets and liabilities may vary for income tax and accounting purposes;
• The tax losses of prior years may be used to reduce the taxable income in later years, subject to tax rules. This will result in differences between the accounting and taxable income (tax loss carryforward); and
• The adjustments of reported financial data from prior years may not be recognized equally for accounting and tax purposes or may be recognized in different periods.