chapter 31: statement of affairs, credit sales, credit purchases

Question 1

explain single entry and incomplete records

Answer 1

where a transaction is recorded either on the credit side or the debit side instead of both. this makes it difficult to draw up other accounting records, such as the ledgers and trial balance, that may be needed in preperation of the final accounts, thereby making the accounting records incomplete

Question 2

list the disadvantages of single and incomplete records

Answer 2

• fraud and errors may not be easily identified
• difficulties in making decisions
• difficult to calculate the profit or loss for the year
• difficult to calculate the tax figures for the government