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12th Accountancy - Accounts From Incomplete Records Important Questions

Published on: 21/11/2019

Accounts From Incomplete Records

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Questions:

Generic 2

5 x 2 = 10

What are the possible reasons for keeping incomplete records?

Why is statement of affairs prepared under single entry system not referred to as balance sheet?

Under single entry system is it possible to check the arithmetical accuracy of books of accounts?

From the following particulars ascertain profit or loss:

	Rs.
Capital as on 1^st April 2018	1,60,000
Capital as on 31^st March, 2019	1,50,000
Additional capital introduced during the year	25,000
Drawings made during the year	30,000

From the following particulars ascertain profit or loss:

	Rs.
Capital at the beginning of the year (1^st April, 2016)	2,00,000
Capital at the end of the year (31^st March, 2017)	3,50,000
Additional capital introduced during the year	70,000
Drawings during the year	40,000

Generic 3

5 x 3 = 15

Which values are affected, when accounts are maintained on single entry system basis.

Radhika started a small bakery for providing healthy and good quality bakery product at reasonable prices on 1^st January, 2019 with a capital of Rs. 1,80,000. She appointed a ten year old boy as a sweeper. She withdrew Rs. 60,000 for household expenses. She introduced Rs. 20,000as fresh capital. Her position of assets and liabilities as at 31^st December, 2019 stood as follows.

	Rs.
Cash in hand	70,000
Stock	80,000
Bills receivable	1,00,000
Debtors	1,50,000
Creditors	60,000
Bills payable	10,000

From the following details find out total sales made during the year

Particulars	Rs.
Debtors on 1st January 2018	1,30,000
Cash received from debtors during the year	4,20,000
Sales returns	35,000
Bad debts	15,000
Debtors on 31st December 2018	2,00,000
Cash Sales	4,60,000

On 1^st April 2018 Subha started her business with a capital of Rs. 1,20,000. She did not maintain proper book of accounts. Following particulars are available from her books as on 31.3.2019.

Particulars	Rs.	Particulars	Rs.
Bank overdraft	50,000	Stock-in-trade	1,60,000
Debtors	1,80,000	Creditors	90,000
Bills receivable	70,000	Bills payable	2,40,000
Computer	30,000	Cash in hand	60,000
Machinery	3,00,000

During the year she withdrew Rs. 30,000 for her personal use. She introduced further capital of Rs. 40,000 during the year. Calculate her profit or loss.

10.

Following are the balances of Shanthi as on 31^st December 2018.

Particulars	Rs	Particulars	Rs
Bills receivable	6,000	Sundry creditors	25,000
Bills payable	4,000	Stock	45,000
Machinery	60,000	Debtors	70,000
Furniture	10,000	Cash	4,000

Prepare a statement of affairs as on 31^st December 2018 and calculate capital as at that date.

Generic 5

4 x 5 = 20

11.

From the following details of vijay who maintains incomplete records, prepare trading and profit and loss account for the year ended 31^st March 2018 and a Balance sheet as on the date.

Particulars	As on 1.4.2017 Rs.	As on 31.3.2018 Rs.
Sundry Creditors	37,500	43,750
Furniture	2,500	2,500
Cash	6,250	10,000
Sundry debtors	62,500	87,500
Stock	25,000	12,500

Other details:

	Rs.
Drawings	10,000
Discount received	3,750
Discount allowed	2,500
Cash received from sundry debtors	1,35,000
Cash paid to creditors	1,12,500
Sales returns	3,750
Purchase returns	1,250
Sundry expenses paid	8,750

12.

Compute the amount of total purchases and total sales of Mr. Amit from the following information for the year ending on March 31, 2018.

	Rs.
Total debtors as on April 01, 2017	40,000
Total creditors as on April 01,2017	50,000
Bills receivable as on April 01, 2017	30,000
Bills payable as on April 01, 2017	45,000
Discount received	5,000
Bad debts	2,000
Return inwards	4,000
Discount allowed	3,000
Cash sales	10,000
Cash purchases	8,000
Total debtors as on March 31, 2018	80,000
Cash received from debtors	1,00,000
Cash paid to creditors	80,000
Cash received against bills receivable	25,000
Payment made against bills receivable	40,000
Total creditors as on March 31, 2018	40,000
Bills payable as on March 31, 2018	50,000
Bills receivable as on March 31,2018	35,000

13.

Mrs. Geetha started business with Rs. 1,20,000 as capital on 1.4.2018. During the year she has withdrawn at the rate of Rs. 1,000 per month. She introduced Rs. 20,000 as additional capital. Her position on 31.3.2019 was as follows.

Particulars	Rs.
Bank balance	8,000
Stock	80,000
Sundry debtors	50,000
Furniture	2,500
Cash in hand	2,000
Sundry creditors	25,000
Expenses outstanding	1,000

She keeps her books under single entry system, determine for profit or loss for the year 2003-04.

14.

Arjun carries on grocery business and does not keep his books on double entry basis. The following particulars have been extracted from his books:

Particulars	1-4-2018 Rs.	31-3-2019 Rs.
Plant and machinery	20,000	20,000
Stock	9,000	16,000
Sundry debtors	2,000	5,300
Sundry creditors	5,000	4,000
Cash at bank	4,000	6,000

Other information for the year ending 31-3-2019 showed the following

	Rs.
Advertising	4,700
Carriage inwards	8,000
Cash paid to creditors	64,000
Drawings	2,000

Total sales during the year were Rs. 85,000. Purchases returns during the year were Rs. 2,000 and sales returns were Rs.1,000. Depreciate plant and machinery by 5%. Provide Rs. 300 for doubtful debts. Prepare trading and profit and loss account for the year ending 31st March, 2019 and a balance sheet as on the date.

Multiple Choice Question

5 x 1 = 5

15.

A firm has assets worth Rs. 60,000 and capital Rs. 45,000.Then it's liabilities is _________

(a)

Rs. 45,000

(b)

Rs. 1,05,000

(c)

Rs. 60,000

(d)

Rs. 15,000

16.

The total assets of a proprietor are Rs. 5,00,000. His liabilities Rs. 3,50,000. Then his capital in the business is ____________

(a)

Rs. 8,50,000

(b)

Rs. 1,50,000

(c)

Rs. 3,50,000

(d)

Rs. 4,25,000

17.

When capital in the beginning is Rs. 10,000, drawings during the year is Rs. 6,000, profit made during the year is Rs. 2,000 and the additional capital introduced is 3,000, find out the amount of capital at the end

(a)

Rs. 9,000

(b)

Rs. 11,000

(c)

Rs. 21,000

(d)

Rs. 3,000

18.

What is the amount of capital of the proprietor, if his assets are Rs. 85,000 and liabilities are Rs. 21,000?

(a)

Rs. 85,000

(b)

Rs. 1,06,000

(c)

Rs. 21,000

(d)

Rs. 64,000

19.

Incomplete records are generally maintained by

(a)

A company

(b)

Government

(c)

Small sized sole trader business

(d)

Multinational enterprises

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Answers Key:

Generic 2

5 x 2 = 10

(i) Simple method: Proprietors, who do not have the proper knowledge of accounting principles. Find it much convenient and easier to maintain their business records under this system.
(ii) Less expensive: It is an economical mode of maintaining records as there is no need to appoint specialised accountant.
(iii) Flexible: Owner may record transactions as particular own needs. It can be easily adjusted or changed whenever needed.
(iv) Less time consuming: Maintaining books according to the single entry system is less time consuming, as only few books are to be maintained. Further the books are not as comprehensive as they are under double entry system.

Statement of affairs prepared under single entry system is not called a balance sheet because statement of affairs is not prepared with the list of ledger balances kept on the basis of double entry system. Also value of assets and liabilities shown in statement of affairs are only the estimates and not the actual values.

No, as arithmetical accuracy is checked by preparing a trial balance and in case of single entry system a trial balance cannot be prepared as it does not record both aspects of a transaction.

**Statement of profit or loss for the year ended 31st March, 2019**
Particulars	Rs.
Closing capital (as on 31.3.2019)	1,50,000
Add: Drawings during the year	30,000
Less: Additional capital introduced during the year	1,80,000
Less: Additional capital introduced during the year	25,000
Adjusted closing capital	1,55,000
Less: Opening capital (as on 1.4.2018)	1,60,000
Loss incurred during the year	(-) 5,000

**Statement of profit or loss for the year ended 31^st March, 2017**
Particulars	Rs.
Closing capital (as on 31.3.2017)	3,50,000 40,000
Add: Drawings during the year	3,50,000 40,000
	3,90,000
Less: Additional capital introduced during the year	70,000
Adjusted closing capital	3,20,000 2,00,000
Less: Opening capital (as on 1.4.2016)	3,20,000 2,00,000
Profit made during the year	1,20,000

Generic 3

5 x 3 = 15

Values being affected are
(i) Reliablility: Value of reliability is affected as accounts maintained on single entry system are less reliable as they are prepared from incomplete records.
(ii) Accuracy: Value of arithmetical accuracy is affected, as in single entry system, trial balance cannot be prepared which proves arithmetical accuracy of accounts.

Statement of affairs as on 31.12.2019
Liabilities	Rs.	Assets	Rs
Creditors	60,000	Cash in hand	70,000
Bills payables	10,000	Stock	80,000
Capital	3,30,000	Bills receivables	1,00,000
(Balancing figure)		Debtors	1,50,000
	4,00,000		4,00,000

Calculation of Profit

Particulars	Rs.
Capital at the end	3,30,000
Add: Drawings	60,000
	3,90,000
Less: Additional capital	20,000
	3,70,000
Less: Opening capital	1,80,000
Profit for the year	1,90,000

Values involved are
(i) Violating child labour act by employing 10 year old boy.
(ii) By providing good quality product she is promoting the welfare and health of society
(iii) By charging reasonable prices she is not indulged in profiteering.

Dr Total Debtors account Cr
Particulars	Rs.	Particulars	Rs
To Balance b/d	1,30,000	By Cash	4,20,000
To Credit sales	5,40,000	By Sales return	35,000
(Balancing figure)		By Bad debits	15,000
		By Balance c/d	2,00,000
	6,70,000		6,70,000

Total sales =Cash sales + Credit sales
=4,60,000 + 5,40,000
=Rs.10,00,000

**Statement of affairs of Subha as on 31.03.2019**
Liabilities	Rs.	Assets	Rs.
Creditors	90,000	Stock in trade	1,60,000
Bills payable	2,40,000	Cash in hand	60,000
Bank overdraft	50,000	Debtors	1,80,000
Capital (Balancing figure)	4,20,000	Bills receiveble	70,000
		Computer	30,000
		Machinery	3,00,000
	8,00,000		8,00,000

Statement of profit or loss for the year ending
31^st March 2019
Particulars	Rs.
Closing capital as on 31.03.2019	4,20,000
Add: Drawings during the year	30,000
	4,50,000
Less: Additional capital introduced during the year	40,000
Adjusted closing capital	4,10,000
Less: Opening capital as on 01.04.2018	1,20,000
Profit made during the year ending 31.03.2019	2,90,000

10.

In the books of Shanthi Statement of affairs as on
31^st December, 2018
Liabilities	Rs	Assets	Rs
Sundry creditors	25,000	Cash	4,000
Bills payable	4,000	Stock	45,000
Capital (balancing figure)	1,66,000	Debtors	70,000
		Bills receivable	6,000
		Machinery	60,000
		Furniture	10,000
	1,95,000		1,95,000

Generic 5

4 x 5 = 20

11.

Calculation of opening capital

Statement of affairs as on 1.4.2017
Liabilities	Rs.	Assets	Rs.
Sundry creditors	37,500	Furniture	2,500
Opening capital (B/F)	58,750	Cash	6,250
		Sundry Debtors	62,500
		Stock	25,000
	96,250		96,250

Dr. Total Debtors account Cr.
Liabilities	Rs.	Particulars	Rs.
To Balance b/d	62,500	By Cash received	1,35,000
To Credit Sales (B/F)	1,66,250	By Discount allowed	2,500
		By Sales returns	3,750
		By Balance c/d	87,500
	2,28,750		2,28,750

Dr. Total Creditors account Cr.
Liabilities	Rs.	Particulars	Rs.
To Cash paid	1,12,500	By Balance b/d	37,500
To Discount received	3,750	By Credit purchases (B/F)	1,23,750
To Purchase returns	1,250
To Balance c/d	43,750
	1,61,250		1,61,250

Trading and Profit and loss account for the year ended 31.3.2018
Particulars	Rs.	Rs.	Particulars	Rs.	Rs.
To Opening stock		25,000	By Sales	1,66,250
To Purchases	1,23,750		Less: Sales returns	3,750	1,62,500
Less: Purchase returns	1,250	1,22,500
			By Closing stock		12,500
To Gross profit c/d		27,500
		1,75,000			1,75,000
To Discount allowed		2,500	By Gross profits b/d		27,500
To Sundry expenses		8,750	By Discount received		3,750
To Depreciation		125
To Net profit		19,875
(Transferred to capital a/c)		31,250			31,250

Balance sheet as on 31.3.2018
Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital	58,750		Furniture	2,500
Add: Net profit	19,875		Less: Depreciation	125	2,375
	78,625		Cash		10,000
Less: Drawings	10,000	68,625	Sundry debtors		87,500
Sundry creditors		43,750	Closing stock		12,500
		1,12,375			1,12,375

12.

Dr. Total Bills receivable account Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	30,000	By Cash	25,000
To Total Debtors	30,000	By Balance c/d	35,000
(Balancing figure)	60,000		60,000

Dr. Total Bills payable account Cr.
Particulars	Rs.	Particulars	Rs.
To Cash	40,000	By Balance b/d	45,000
To Balance c/d	50,000	By Total creditors	45,000
		(Balancing figure)
	90,000		90,000

Dr. Total Debtors account Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	40,000	By Bad debts	2,000
To Sales	1,79,000	By Return inwards	4,000
(balancing figure)		By Discount allowed	3,000
		By Cash	1,00,000
		By Bills receivable	30,000
		(Transfer from bills receivable account)
		By Balance c/d	80,000
	2,19,000		2,19,000

Dr. Total Creditors account Cr.
Particulars	Rs.	Particulars	Rs.
To Discount received	5,000	By Balance b/d	50,000
To Cash	80,000	By Purchases	1,20,000
To Bills payable	45,000	(credit)
(transfer from bills		(Balancing figure)
payable account)
To Balance c/d	40,000
	1,70,000		1,70,000

13.

Statement of affairs as on 31^st March 2019
Liabilities	Rs.	Assets	Rs.
Sundry creditors	25,000	Bank balance	8,000
Expenses outstanding	1,000	Stock	80,000
Closing capital (B/F)	1,16,500	Sundry debtors	50,000
		Furniture	2,500
		Cash in hand	2,000
	1,42,500		1,42,500

Statement of profit or loss
Particulars	Rs.
Closing capital	1,16,500
Add: Drawings (1000 x 12)	12,000
	1,28,500
Less: Additional capital	20,000
Adjusted closing capital	1,08,500
Less: Opening capital	1,20,000
Loss for the year	11,500

14.

**In the books of Arjun Statement of affairs as on 1^st April, 2018**
Liabilities	Rs.	Assets	Rs.
Creditors	5,000	Cash at bank	4,000
Opening capital	30,000	Stock	9,000
(balancing figure)		Sundry debtors	2,000
		Plant and machinery	20,000
	35,000		35,000

**Dr. Total creditors account Cr.**
Particulars	Rs.	Particulars	Rs.
To Cash A/c (paid)	64,000	By Balance b/d	5,000
To Purchases returns	2,000	By Purchases A/c (credit)	65,000
To Balance c/d	4,000	(balancing figure)
	70,000		70,000

**Dr. Trading and Profit and Loss Account for the year ended 31^st March, 2019 Cr.**
Particulars		Rs.	Particulars		Rs.
To Opening stock		9,000	By Sales	85,000
To Purchases			Less Returns	1,000	84,000
Credit	65,000		By Closing stock		16,000
Less Returns	2,000	63,000
To Carriage inwards		8,000
To Gross profit c/d		20,000
		1,00,000			1,00,000
To Advertising		4,700	By Gross Profit b/d		20,000
To Depreciation on machinery		1,000
To Provision for doubtful debts		300
To Net profit transferred to capital a/c		14,000
		20,000			20,000

**Balance Sheet as on 31^st March, 2019**
Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital	30,000		Cash at bank		6,000
Add: Net profit	14,000		Stock		16,000
	44,000		Sundry debtors	5,300
Less: Drawings	2,000	42,000	Less: Provision	300	5,000
Sundry creditors		4,000	Plant and Machinery	20,000
			Less: Depreciation	1,000	19,000
		46,000			46,000