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Accounts from Incomplete Records 11

e have so far studied accounting records of
Wfirms, which follow the double entry system of
book keeping. This gives us an impression that all
business units follow this system. However, in practice,
all firms do not maintain accounting records strictly as
per the double entry system. Many small size enterprises
keep incomplete records of their transactions. But, they
also have to ascertain the profit or loss for the year
and the financial position of the firm as at the end of
the year. This chapter deals with the ascertainment of
profit or loss and financial position of the firm that have
not been maintaining records as per double entry book-
LEARNING OBJECTIVES
keeping or whose records are otherwise incomplete.
After studying this
chapter, you will be able 11.1 Meaning of Incomplete Records
to :
• state the meaning and Accounting records, which are not strictly kept
features of incomplete according to double entry system are known as
records; incomplete records. Many authors describe it as single
• calculate profit or loss
using the statement of entry system. However, single entry system is a
affairs method; misnomer because there is no such system of
• distinguish between maintaining accounting records. It is also not a ‘short
balance sheet and cut’ method as an alternative to double entry system.
statement of affairs; It is rather a mechanism of maintaining records
• prepare trading and whereby some transactions are recorded with proper
profit and loss account
and balance sheet from debits and credits while in case of others, either one
incomplete records; sided or no entry is made. Normally, under this system
and records of cash and personal accounts of debtors and
• detect the missing creditors are properly maintained, while the
figures/information by information relating to assets, liabilities, expenses
preparing relevant and revenues is partially recorded. Hence, these are
accounts.
usually referred as incomplete records.

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