Incomplete Records

Question 1

Define the term single entry

Answer 1

Where transactions are recorded on either the debit or the credit side instead of both
Single entry accounting is a method of bookkeeping relying on a one sided accounting entry to maintain financial information.

Question 2

Define the term incomplete records

Answer 2

Not recording every transaction, only partly done

Question 3

Name the disadvantages of single entry and incomplete records

Answer 3

• unable to calculate correct profit/ loss
• lack of arithmetical accuracy
• unacceptable for tax purposes

Question 4

What is a statement of affairs used for and how is it calculated?

Answer 4

Used for the calculation of opening/ closing capital
Assets - liabilities = capital

Calculating profit when opening and closing capital are known: end of year capital - opening capital - capital introduced + drawings = profit

Question 5

How are purchases and sales calculated?

Answer 5

Credit purchases and sales can be calculated by using control accounts

Total purchases and sales are calculated by adding the credit purchases and sales to the cash purchases and sales

Question 6

How is mark up changed to margin?

Answer 6

Question 7

How is margin changed to mark up?

Answer 7