Which feature best describes an incomplete records system?
Correct answer: C. Some transactions lack complete double entries
- A. Only cash transactions are recorded
- B. Every transaction has two recorded entries
- C. Some transactions lack complete double entries
- D. Only credit transactions are recorded
Explanation
Incomplete records means that accounting information is maintained without recording every transaction according to the double-entry system. It may include cash records, personal accounts, or selected ledger accounts, but the records are not complete.
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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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More Incomplete Records questions
Which statement is commonly prepared to find the capital under incomplete records?
A business has assets of Rs. 850,000 and liabilities of Rs. 275,000. What is its capital according to the statement of affairs?
Under the capital comparison method, which formula determines profit when drawings and additional capital are known?
A trader’s opening capital is Rs. 400,000, closing capital is Rs. 470,000, drawings are Rs. 60,000, and additional capital introduced is Rs. 20,000. What is the profit?