Free Incomplete Records MCQs with Answers
34 Incomplete Records MCQs from Accounting, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
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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- A. Only cash transactions are recorded
- B. Every transaction has two recorded entries
- C. Only credit transactions are recorded
- D. Some transactions lack complete double entries
Explanation: Incomplete records means that accounting information is maintained without recording every transaction according to the double-entry…
Correct answer: Some transactions lack complete double entries- A. Bank reconciliation statement
- B. Statement of affairs
- C. Manufacturing account
- D. Funds flow statement
Explanation: A statement of affairs lists assets and liabilities, and the difference is treated as capital.
Correct answer: Statement of affairs- A. Rs. 275,000
- B. Rs. 1,125,000
- C. Rs. 575,000
- D. Rs. 850,000
Explanation: Capital is calculated as assets minus liabilities. Therefore, Rs. 850,000 minus Rs. 275,000 equals Rs. 575,000.
Correct answer: Rs. 575,000- A. Opening capital minus closing capital plus drawings plus additional capital
- B. Opening capital plus closing capital minus drawings plus additional capital
- C. Closing capital plus opening capital minus drawings minus additional capital
- D. Closing capital minus opening capital plus drawings minus additional capital
Explanation: Profit equals closing capital plus drawings, less additional capital introduced, less opening capital.
Correct answer: Closing capital minus opening capital plus drawings minus additional capital- A. Rs. 50,000
- B. Rs. 70,000
- C. Rs. 90,000
- D. Rs. 110,000
Explanation: Profit equals closing capital plus drawings minus additional capital minus opening capital. Thus, Rs. 470,000 + Rs. 60,000 - Rs.
Correct answer: Rs. 70,000- A. Rs. 70,000
- B. Rs. 75,000
- C. Rs. 80,000
- D. Rs. 85,000
Explanation: Credit sales are found by adding closing debtors, cash received, returns inward, and bad debts, then subtracting opening debtors.
Correct answer: Rs. 80,000- A. Rs. 62,000
- B. Rs. 66,000
- C. Rs. 76,000
- D. Rs. 70,000
Explanation: Credit purchases are calculated as closing creditors plus cash paid and returns outward, minus opening creditors. Therefore, Rs.
Correct answer: Rs. 70,000- A. Cash balance
- B. Credit sales
- C. Gross profit
- D. Closing inventory
Explanation: A complete cash book provides a record of cash receipts, cash payments, and the resulting cash balance.
Correct answer: Cash balance- A. Profit of Rs. 30,000
- B. Loss of Rs. 30,000
- C. Profit of Rs. 90,000
- D. Loss of Rs. 90,000
Explanation: The result is calculated as closing capital plus drawings minus additional capital minus opening capital. Thus, Rs. 360,000 + Rs.
Correct answer: Profit of Rs. 90,000- A. It always excludes cash transactions
- B. It cannot use any information about assets
- C. It automatically records every business expense
- D. It may be affected by inaccurate asset and liability values
Explanation: Profit under incomplete records depends on the accuracy of opening and closing assets and liabilities.
Correct answer: It may be affected by inaccurate asset and liability values- A. Rs. 30,000
- B. Rs. 25,000
- C. Rs. 20,000
- D. Rs. 35,000
Explanation: Cash sales are found by deducting other identified receipts from total cash receipts. Thus, Rs. 260,000 minus Rs. 190,000, Rs.
Correct answer: Rs. 30,000- A. Rs. 350,000
- B. Rs. 320,000
- C. Rs. 375,000
- D. Rs. 400,000
Explanation: If gross profit is 20% of sales, cost of goods sold represents 80% of sales. Therefore, sales equal Rs. 280,000 divided by 0.80, or Rs.
Correct answer: Rs. 350,000- A. Rs. 84,000
- B. Rs. 96,000
- C. Rs. 90,000
- D. Rs. 120,000
Explanation: Expense incurred equals cash paid plus closing outstanding expense minus opening outstanding expense. The calculation is Rs.
Correct answer: Rs. 96,000- A. Outstanding rent
- B. Bank loan
- C. Trade creditors
- D. Prepaid insurance
Explanation: Prepaid insurance represents a future economic benefit and is therefore treated as an asset.
Correct answer: Prepaid insurance- A. As a current liability
- B. As a current asset
- C. As a fixed asset
- D. As a capital receipt
Explanation: A bank overdraft is an amount owed by the business to the bank, so it is a liability.
Correct answer: As a current liability- A. A personal drawing
- B. A business expense
- C. An increase in capital
- D. A cash receipt
Explanation: Depreciation represents the use of an asset during the accounting period and reduces business profit.
Correct answer: A business expense- A. Profit is overstated
- B. Profit is unchanged
- C. Profit is understated
- D. Capital is overstated
Explanation: A machine is a capital asset, so its full cost should not normally be charged as a current expense.
Correct answer: Profit is understated- A. Add them to sales
- B. Treat them as an expense
- C. Add them to creditors
- D. Treat them as drawings
Explanation: Goods taken by the owner are not business sales and represent drawings in kind.
Correct answer: Treat them as drawings- A. Rs. 110,000
- B. Rs. 100,000
- C. Rs. 90,000
- D. Rs. 130,000
Explanation: Total purchases are Rs. 400,000, and cost of goods sold is Rs. 40,000 plus Rs. 400,000 minus Rs. 50,000, or Rs. 390,000.
Correct answer: Rs. 110,000- A. Gross profit is overstated
- B. Liabilities are overstated
- C. Gross profit is understated
- D. Sales are understated
Explanation: Closing stock is deducted when calculating cost of goods sold. If it is omitted, cost of goods sold is overstated and the resulting gross…
Correct answer: Gross profit is understatedIncomplete Records MCQs: common questions
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