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
	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

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 Creditors account                           Cr

Particulars	Rs.	Particulars	Rs
To Cash (Bills paid)	30,000	By Balance b/d	25,000
To Balance c/d	20,000	By Sundry creditors	25,000
		(Bills accepted - balancing figure)
	50,000		50,000

Dr                         Total Creditors account                           Cr

Particulars	Rs.	Particulars	Rs
To Cash paid	1,20,000	By Balance b/d	30,000
To Purchases returns	15,000	By Purchases	1,55,000
To Bills payable	25,000	(credit balancing figure)
(Bills accepted)
To Balance c/d	25,000
	1,85,000		1,85,000

Total purchases = Cash purchases + Credit purchases
=Rs.2,25,000 + Rs.1,55,000
=Rs.3,80,000

Statement of profit or loss for the year ending
31^st March 2018

Particulars	Rs.
Closing capital as on (31.03.2018)	80,000
Add : Drawings during the year	15,000
	95,000
Less: Additional capital introduced during the year	30,000
Adjusted closing capital	65,000
Less: Opening capital as on 01.04.2017 (B/F)	90,000
Loss for the year ending 31.03.2018	25,000

Total sales are calculated by adding cash and credit sales. Cash sales are given in cash book. For ascertaining the amount of credit sales, the total debtors account should be prepared. The specimen of total debtors account is given below.

Dr                           Ascertainment of credit sale                     Cr

Particulars	Rs.	Particulars	Rs.
To Balace bid (Op. Bal.)	xxx	By Cash A/c (Received)	xxx
To Sles A/c (Credit sales)	xxx	By Bank (Cheques Received)	xxx
To Bank A/c (Cheque dishonoured)	xxx	By Discount allowed	xxx
To Bills receivable (Bills dishonoured)	xxx	By Sales return A/c	xxx
		By Bad debts A/c	xxx
		By Bills receivable A/c
		(Bills received)	xxx
		By Balance c/d	xxx
	xxxx	Closing balance	xxx

Following are the steps to be followed under the statement of affairs method to find out the profit or loss.
(1) Ascertain the opening capital by preparing a statement of affairs at the beginning of the year by taking the opening balances of assets and liabilities.
(2) Ascertain the closing capital by preparing a statement of affairs at the end of the accounting period after making all adjustments such as depreciation, bad debts, outstanding and prepaid expenses, outstanding income, interest on capital, interest on drawings, etc.
(3) Add the amount of drawings (both in cash and/in kind) to the closing capital.
(4) Deduct the amount of additional capital introduced, to get adjusted closing capital.
(5) Ascertain profit or loss by subtracting opening capital from the adjusted closing capital.
a) If adjusted closing capital is more than the opening capital, it denotes profit
b) If adjusted closing capital is lesser than the opening capital, it denotes loss Following format is used to find out the profit or loss:

Particulars	Rs.
Capital at the end of the year	xxxx
Add: Drawings during the year	xxxx
	xxxx
Less: Additional capital introduced during the year	xxxx
Adjusted closing capital	xxxx
Less: Opening Capital	xxxx
Profit or loss for the year	xxxx

In the books of David 
Calculation of opening capital 
Statement of affairs as on 1^st April, 2018 Liabilities Rs Assets Rs Sundry creditors 1,05,000 Cash 43,000 Loan 25,000 Stock of goods 1,20,000 Capital (balancing figure) 4,00,000 Sundry debtors 84,000  Business premises 2,50,000  Furniture 33,000 5,30,000 5,30,000 Calculation of closing capital 
Statement of affairs as on 31^st March, 2019 Liabilities Rs Assets Rs Sundry creditors 1,02,000 Cash 29,000 Loan 20,000 Stock of goods 1,30,000 Capital (balancing figure) 4,42,000 Sundry debtors 1,10,000  Business premises 2,50,000  Furniture 45,000  5,64,000 5,64,000 Statement of affairs as on 31st March, 2019
ParticularsRs Closing capital as on 31.3.2019 4,42,000 Add: Drawings during the year (2,500 x 12) 30,000 4,72,000 Less: Additional capital introduced during the year 45,000 Adjusted closing capital 4,27,000 Less: Opening capital as on 1.4.2018 4,00,000 Profit made during the year ending 31.3.2019 27,000

Statement of profit or loss for the year ended 31^st March, 2018

Particulars	Rs
Closing capital (as on 31.3.2018)	2,75,000 20,000
Add: Drawings during the year (balancing figure)
	2,95,000 30,000
Less: Additional capital introduced during the year
Adjusted closing capital	2,65,000 2,50,000
Less: Opening capital (as on 1.4.2017)
Profit made during the year	15,000

S.No	Basis of distinction	Double entry system	Incomplete records
1.	Recording of transaction	Both debit and credit aspect of all the transaction are recorded.	Debit and credit aspect of all the transaction are not recorded completely for some transaction. both aspect are entered some transaction are particularly recorded and some transaction are omitted to be.
2.	Type of account maintained	Personal, real and nominal accounts are maintained fully	In General, only personal and cash account are maintained fully real and nominal account are not maintained fully.
3.	Preparation of trial balance	Trial balance can be prepared to check the arithmetical accuracy of the entries made in the books of accounts.	It is difficult to prepared the trial balance to check arithmetical accuracy of entries made in the books of account as the account are incomplete.
4.	Suitability	trading and profit or loss account can be prepared to find out the true profit or loss.	Trading and profit and loss account cannot be prepared with accuracy as complete. information is not available and hence profit or loss found out may not be accurate.
5.	Reliability	Balance sheet can be prepared to know the true financial position.	Balance sheet cannot be prepared with accuracy and true financial position cannot be ascertained. as the asset and liabilities are just estimate and incomplete.