In a total debtors account prepared under incomplete records, which item is not recorded?
Correct answer: D. Cash sales
- A. Credit sales
- B. Returns inward
- C. Bad debts
- D. Cash sales
Explanation
A total debtors account records transactions involving credit customers, including credit sales, returns, receipts and bad debts. Cash sales do not create a debtor balance, so they are excluded.
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About Incomplete Records
Incomplete records require profit and financial position to be reconstructed when a complete double-entry system is unavailable. Methods include statements of affairs, capital comparisons, control accounts, cash summaries and margin calculations to find missing sales, purchases, expenses, assets, liabilities and drawings, while distinguishing business profit from changes in capital.
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