Incomplete Records
Understand What Is Incomplete Records: | |
|Incomplete records – is the term used for any system of bookkeeping which does not use full double entry.|
| |
|Generally applies to small business whether incorporated as Sole Proprietorship or Partnership. For them,|
|generally a simple cash book to record receipts and payments may be enough instead of the proper |
|accounting system complete with day books and ledgers. |
|Using incomplete records cannot give an accurate  period end financial statements as they do not tell |
|the whole story. There is no record of outstanding debtors or creditors, nor of stock, nor, without |
|analysis, of for what receipts and payments have been received and paid, or, in some cases, of the split |
|between revenue and capital items. As a result, in an incomplete record system:- |
|€the figures must be calculated, extrapolated, or extracted in the case of creditors and debtors |
|to arrive at the year-end profit and loss account and balance sheet will rely heavily on application of |
|the concept of the accounting equation which is Assets = Proprietors capital + liabilities. Thus the |
|value of capital can be determined at any point in time. |
|However, questions on Incomplete records are quite popular with examiners to test the understanding of |
|candidates on Double Entry Methodology. |
|Learn to master Incomplete Record By: |
|Ensuring you have a SOUND knowledge of DOUBLE ENTRY for Sales (Cash & Credit),Purchase (Cash & Credit), |
|Cash transactions for expenses & other cash received ( usually capital being introduced)
|Incomplete records – is the term used for any system of bookkeeping which does not use full double entry.|
| |
|Generally applies to small business whether incorporated as Sole Proprietorship or Partnership. For them,|
|generally a simple cash book to record receipts and payments may be enough instead of the proper |
|accounting system complete with day books and ledgers. |
|Using incomplete records cannot give an accurate  period end financial statements as they do not tell |
|the whole story. There is no record of outstanding debtors or creditors, nor of stock, nor, without |
|analysis, of for what receipts and payments have been received and paid, or, in some cases, of the split |
|between revenue and capital items. As a result, in an incomplete record system:- |
|€the figures must be calculated, extrapolated, or extracted in the case of creditors and debtors |
|to arrive at the year-end profit and loss account and balance sheet will rely heavily on application of |
|the concept of the accounting equation which is Assets = Proprietors capital + liabilities. Thus the |
|value of capital can be determined at any point in time. |
|However, questions on Incomplete records are quite popular with examiners to test the understanding of |
|candidates on Double Entry Methodology. |
|Learn to master Incomplete Record By: |
|Ensuring you have a SOUND knowledge of DOUBLE ENTRY for Sales (Cash & Credit),Purchase (Cash & Credit), |
|Cash transactions for expenses & other cash received ( usually capital being introduced)