INCOMPLETE RECORDS

In order to construct the final accounts, reconstruction of the sales account, purchases account and

bank account will be necessary.

 

It does not use the double entry principle.

 

It has limited accounting records and no trial balance.

 

 

 

Statement Of Affairs

 

Refers to a list of assets and liabilities held by a company as at a certain date.

 

It is for the purpose of calculating the opening capital, closing capital, net profit, increase in capital and

decrease in capital.

 

It is not similar to Balance Sheet as it is not the result of a double entry system.

 

Therefore, understanding the following is vital to obtain the missing figures necessary to prepare

the final accounts.

 

 

Opening / Closing Capital

 

Assets – Liabilities   =   Capital

Net Profit / Loss

 

Closing Capital    -   Opening Capital     =     Net Profit / (Net Loss)

 

 

 

 

Total Purchases

 

(Payments (Creditors/Cash)   +   Contra   +   Discount Received   +

Amount still owing at the end of the accounting year)    -  

Amount still owing at the beginning of the accounting year

 

 

 

 

 

Total Sales

 

(Receipts (Debtors / Cash)   +   Contra   +   Discount Allowed    +    Bad Debts written off   +

Amount still owing by the trade debtors at the end of the accounting year)    -

Amount still owing by the trade debtors at the beginning of the accounting year

 

 

 

 

 

Operating Expenses

This can be derived at through the opening and closing prepayments or accruals and the payments

made.

 

The difference or the balancing figure will be transferred to the Profit & Loss Account.

 

 

 

 

 

 

Depreciation

 

For an incomplete records, the book value of the assets at the end of an accounting period is an estimated

value.

 

Any purchase and disposal proceeds of an asset is debited and credited respectively in the ledger.

 

Depreciation is the balancing figure in this case.

 

 

 

 

 

IMPORTANT REMINDER

 

THIS IS TO PROVIDE STUDENTS A COURTESY REMINDER THAT THIS BLOG IS CATERED

TO HELP ACCOUNTANCY STUDENTS AT BASIC LEVEL TO GAIN A QUICK SUMMARY OF

MAJORLY ALL THE BASIC COMPONENTS OF THE BOOK-KEEPING AND ACCOUNTING STUDIES.

 

IT IS NOT MEANT TO PROVIDE A COMPLETE CONTENT OF THE SUBJECT MATTER.

 

THEREFORE, STUDENTS ARE ADVISED TO TAKE THIS INFORMATION RESOURCE AS A SUPPLEMENTARY READING ONLY.

 

THIS READING MATERIAL IS ONLY A SUMMARY OF WHAT IS ESSENTIAL IN GETTING  A GOOD

UNDERSTANDING BUT NOT AN EXHAUSTIVE ONE OF THE RELATED TOPIC.

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