Accounts from Incomplete Record Test - 3

the profit/loss in case of single entry system can be ascertained by the following two methods:-

1. statement of affairs method and

2. conversion method

as per money measurement principle, only those transactions and events shall be recorded that can be measured in monetary terms.

under accounts from incomplete records system usually only cash and personal accounts of creditors and debtors are maintained, real and nominal accounts are avoided.

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                               ****

balance sheet consists only real and personal accounts and nominal accounts are dealt in Trading A/C and Profit & Loss A/C.

the trial balance is prepared just to check the arithmetic accuracy of accounting information. statement of affairs is prepared under accounts from incomplete records where arithmetic accuracy can't be checked since all information aren't available. hence when Statement of affairs is prepared trial balance is not prepared.

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

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.

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.