Chapter 16 - Incomplete Records Accounting

Question 1

What are incomplete records

Answer 1

Incomplete records is the term used where some aspect of the accounting system is missing. This can be from a result from a disaster eg a fire, missing accounting records, differences between ledger accounts, timing differences

Question 2

Opening capital

Answer 2

Opening capital is needed because a year end statement of financial position is to be prepared. To calculate opening capital: assets - liabilities = capital

Question 3

Cash book summary

Answer 3

A cash book summary enables us to find out the cash and bank balances at the end of the year.

At the end of the cash book summary, a credit balance brought down is an overdraft

Question 4

Calculating purchases and sales

Answer 4

Purchases for year = payments in year less trade payables at beginning of the year plus trade payables at the end of the year

Sales for year = receipts in year, less trade receivables at the beginning of the year plus trade receivables at the end of the year

Question 5

Use of control accounts

Answer 5

The use of control accounts is recommended for calculating purchases and sales in incomplete records.

Minus the balancing figure from the balance b/d amount at the start of the year to give you the missing amount.