accounts from incomplete records Test - 3

calculation of profit/loss during the year:-

           capital at the end                                   ****

     Add: drawing during the year                       ****

                                                                            ****

     Less: capital introduced                                **** 

    adjusted capital at the end                            ****

    Less: capital at the beginning                         ****  

   profit\loss for the year                                    ****

if credit purchase isn't given in any question and it is required to be calculated then it can be calculated by preparing creditors A/C.

a balance sheet is based on the balances of different ledger accounts.

a statement of affairs is a statement of all assets and liabilities. The difference between the amount of the two sides is taken as capital. A statement of affairs is just like the balance sheet.

single entry system also known as 'accounts from incomplete records' under this system sometimes for certain transaction both aspects are recorded, for others one aspects are recorded and some transactions are not even recorded. this is an incomplete and an unscientific system.

 sometimes for certain transactions, both aspects are recorded, for others one aspects are recorded and some transactions are not even recorded. that's why it is called as un-scientific system of accounting.

under single entry system, trial balance can not be prepared due to the incomplete system of accounting. therefore, the arithmetic accuracy of the accounting can't be verified.

single entry system is mostly used by the small businesses who can not afford heavy book keeping expenditure also it is a very easy method of recording business transactions because no specific knowledge is required for it.

if credit sale is not given in any question, it can be ascertained by preparing debtor A/C. the balancing figure in the debtor A/C WOULD be considered as credit sale.

the closing balance in the cash book at the end of the year shall be the cash in hand at the end of the year.