### Accounts from Incomplete Records - Test Papers

CBSE Test Paper 01

Ch-11 Accounts Incomplete Records

1. Can a limited company maintain its accounts under single entry system?

2. Calculate Purchases-

 Rs. Cost of Goods Sold 65,000 Stock in the beginning 4,000 Closing Stock 5,000
3. In the single entry system, state any method which is used to ascertain profit or loss.

4. Explain how opening capital and closing capital be ascertained from incomplete records?

5. Following information is given of an accounting year-
Opening Creditors Rs.15,000; Cash paid to creditors Rs.15,000; Returns Outward Rs.1,000 and Closing creditors Rs.12,000.
Calculate Credit Purchases during the year.

6. Rishant keeps incomplete records of his business. He gives you the following information. Capital at the beginning of the year Rs 8,00,000; capital at the end of the year Rs 6,20,000, Rs 2,50,000 was withdrawn by him for his personal use; as Rishant needed money for expansion of his business, he asked his wife for help, his wife allowed him to sell her ornaments and invest that amount into the business which come to Rs 30,000. Calculate his profit or loss for the year ended.

7. What is meant by single entry system of accounts and give any three salient features.

8. Manveer started his business on 1st January 2013 with a capital of Rs 4,50,000. On 31st December, 2013 his position was under

 Items Amt(Rs) Cash 99,000 Bills Receivable 75,000 Plant 48,000 Land and Building 1,80,000 Furniture 50,000

He owed Rs 45,000 from his friend Susheel on that date. He withdrew Rs 8,000 per month for his household purposes. Ascertain his profit or loss for this year ended 31 st December, 2013.

9. Following information is supplied to you by a shopkeeper:

 1st April 2017 31st March 2018 Cash Rs.6,000 Rs.7,000 Sundry Debtors 68,000 64,000 Stock 59,000 87,000 Furniture 15,000 13,500 Sundry Creditors 20,000 18,000 Bills Payable 15,000 11,000

During the year he withdrew Rs.2,500 per month for domestic purpose. He also borrowed from a friend at 9% a sum of Rs.20,000 on 1st October 2017. He has not yet paid the interest. A provision of 5% on debtors for doubtful debts is to be made. Ascertain the profit or loss made by him during the period.

10. Vijay commenced business as foodgrains merchant on 1st April, 2017 with a capital of Rs.4,00,000. On the same day, he purchases furniture for Rs.80,000. From the following particulars obtained from his books which do not conform to Double Entry principles, you are required to prepare the Trading and Profit and Loss Account for the year ended 31st March, 2018 and the Balance Sheet as on that date :

 Rs. Sales (including Cash Sales Rs.2,00,000) 5,00,000 Purchases (including Cash Purchases Rs.1,20,000) 4,00,000 Vijay's Drawings (in Cash) 40,000 Salaries to Staff 48,000 Bad Debts written off 4,000 Trade Expenses paid 16,000

Vijay used goods of Rs.12,000 for private purpose during the year. On 31st March, 2018, his Debtors amounted to Rs.1,40,000 and Creditors Rs.80,000. Stock-in-Trade on that date was Rs.1,60,000.

CBSE Test Paper 01
Ch-11 Accounts Incomplete Records

1. No, a limited company cannot maintain its books of accounts under single entry system due to legal restrictions.

2. Cost of goods Sold = Purchase + Opening Stock - Closing Stock
65,000 = Purchase + 4,000 - 5,000

Purchase = Rs.66,000

3. Statement of Affairs Method or Net Worth Method is generally used to ascertain Profit /Loss in case of Single Entry System.

4. Opening capital can be obtained by preparing the statement of affairs at the beginning of the financial year and the closing capital can be ascertained with the help of the statement of affairs at the end of the financial year of the firm.

5. The term "Sundry" usually refers Small or infrequent customers/companies that are not assigned individual ledger accounts but are classified as a group. Sundry creditors are such small entities that the company owes money to. In this question the account is to be maintained as follows:-

Sundry Creditors A/c

 Particulars Rs. Particulars Rs. To Cash A/c (Paid) 15,000 By Balance b/d 15,000 To Returns Outward 1,000 By Credit Purchase(Bal. Fig.) 13,000 To Balance c/d 12,000 Total 28,000 Total 28,000
6. Statement of Profit And Loss
for the year ended....

 Particulars Amt.(Rs) Capital at the End(ie.closing capital) 6,20,000 Add: Drawings 2,50,000 8,70,000 Less: Additional Capital Introduced 30,000 Adjusted capital at the end 8,40,000 Less: Capital in the Beginning(ie.opening capital) 8,00,000 Profit Made During the year 40,000

7. Meaning of Single Entry System: A single entry system records a transaction with a single entry and only maintains one side of every transaction. It is the oldest method of recording financial transactions and is less popular than the double-entry system and is mainly used for entries recorded in the income statement. This term is used to describe the problems associated with the accounts from an incomplete transaction and is popularly called as ‘Preparation of accounts from incomplete records’

Three Salient features of Single Entry System :

• Under this method, only one Cash Book is maintained which mixes up both the private and business transaction.
• Under this system, Profit or Loss can be ascertained but not the financial position as a whole.
• Arithmetical accuracy of the account is not possible since Trial Balance can't be prepared.
8. Books of Manveer

Statement of Affairs
as 31st December, 2013

 Liabilities Amt(Rs) Assets Amt(Rs) Loan from Sushil 45,000 Cash 99,000 Capital(Balancing figures) 4,07,000 Bills Receivable 75,000 Plant 48,000 Land and Building 1,80,000 Furniture 50,000 4,52,000 4,52,000

Statement of Profit or Loss
for the year ended 31st December, 2013

 Particulars Amt(Rs) Capital at the End i.e, 31st December, 2013 4,07,000 (+) Drawings Made During in the year(8000 ×$×$12) 96,000 Adjusted capital at the end 5,03,000 (-) Capital in the Beginning i.e, 1st January, 2013 4,50,000 Profit Made During the year 2013 53,000

Note: 1. Statement of Profit and loss is made to ascertain the Profit or Loss during the period in place of Profit/Loss Account.

2.   Statement of Affairs is made to ascertain the Closing Capital.

9. Incomplete records refer to a situation in which an organization is not using double-entry bookkeeping. Instead, it is using a more informal accounting system, such as a single-entry system, to maintain a reduced amount of information about its financial results. So, as per this, the question is to be solved as follows:-

STATEMENT OF AFFAIRS

 Liabilities 1.4,17 31.3.18 Assets 1.4.17 31.3.18 Creditors 20,000 18,000 Cash 6,000 7,000 B/P 15,000 11,000 Debtors 68,000 64,000 Capital (Balancing figure) 1,13,000 1,22,500 Furniture 15,000 13,500 Friend's loan - 20,000 Stock 59,000 87,000 1,48,000 1,71,500 1,48,000 1,71,500

STATEMENT OF PROFIT

 Particulars Amount (Rs.) Closing Capital 1,22,500 Add : Drawings (12×$×$2,500) 30,000 Total 1,52,500 Less : Opening Capital 1,13,000 1,13,000 Gross Profit 39,500 Less : Interest on Borrowings = 20,000×$×$9%1/2= 900 Less : Provision for B/D = 64,000×$×$5%= 3,200 4,100 Net Profit 35,400
10. Cash A/c

 Particulars AmountRs. Particulars AmountRs. To Capital A/c 4,00,000 By Furniture A/c 80,000 To Cash Sales A/c 2,00,000 By Cash Purchase A/c 1,20,000 To Sundry Debtors A/c 1,56,000 By Sundry Creditors A/c 2,00,000 By Drawings A/c 40,000 By Salaries A/c 48,000 By Trade Expenses A/c 16,000 By Balance c/d (Bal. Fig) 2,52,000 7,56,000====== 7,56,000======

Sundry Debtors A/c

 Particulars AmountRs. Particulars AmountRs. To Credit Sales A/c 3,00,000 By Bad Debts A/c 4,000 By Cash A/c (Bal. Fig.) 1,56,000 By Balance c/d 1,40,000 3,00,000======= 3,00,000========

Sundry Creditors A/c

 Particulars AmountRs. Particulars AmountRs. To Cash A/c (Bal. Fig.) 2,00,000 By Credit Purchase A/c 2,80,000 To Balance c/d 80,000 2,80,000======== 2,80,000=======

Trading and Profit & Loss A/c
as
at March 31, 2018

 Particulars AmountRs. Particulars AmountRs. To Purchases A/c                    4,00,000 By Sales A/c 5,00,000 Less: Drawings A/c                                                            12,000 3,88,000 By Closing Stock A/c 1,60,000 To Gross Profit c/d 2,72,000 6,60,000======== 6,60,000======= To Salaries A/c 48,000 By Gross Profit b/d 2,72,000 To Bad Debts A/c 4,000 To Trade Expenses A/c 16,000 To Net Profit c/d 2,04,000 2,72,000======= 2,72,000========

Balance Sheet
as
at March 31, 2018

 Liabilities AmountRs. Assets AmountRs. Sundry Creditors 80,000 Cash 2,52,000 Capital 4,00,000 Sundry Debtors 1,40,000 Add: Net Profit 2,04,000 Closing Stock 1,60,000 6,04,000 Furniture 80,000 Less : Drawings [40,000+12,000]       52,000 5,52,000 6,32,000======== 6,32,000========

Final Accounts of sole trader consists of: