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12th Standard English Medium Accountancy Subject Accounts From Incomplete Records Book Back 3 Mark Questions with Solution Part - II updated Book back Questions

Published on: 13/05/2022

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Questions:

Generic 3

5 x 3 = 15

What are the limitations of incomplete records?

From the following particulars calculate total purchases

Particulars	Rs
Sundry creditors on 1^st April, 2017	75,000
Bills payable on 1^st April, 2017	60,000
Paid cash to creditors	3,70,000
Paid for bills payable	1,00,000
Purchases returns	15,000
Cash purchases	3,20,000
Creditors on 31^st March, 2018	50,000
Bills payable on 31^st March, 2018	80,000

David does not keep proper books of accounts. Following details are given from his records
Particulars 1.4.2018
Rs. 31.3.2019
Rs. Cash 43,000 29,000 Stock of goods 1,20,000 1,30,000 Sundry debtors 84,000 1,10,000 Sundry creditors 1,05,000 1,02,000 Loan 25,000 20,000 Business premises 2,50,000 2,50,000 Furniture 33,000 45,000 During the year he introduced further capital of Rs. 45,000 and withdrew Rs. 2,500 per month from the business for his personal use. Prepare statement of profit or loss with the above information.

From the following details, calculate the missing figure:

	Rs
Capital as on 1^st April, 2017	2,50,000
Capital as on 31^st March, 2018	2,75,000
Additional capital introduced during the year	30,000
Profit for the year	15,000
Drawings during the year	?

From the following details, calculate the missing figure

	Rs.
Closing capital as on 31.3.2019	1,90,000
Additional capital introduced during the year	50,000
Drawings during the year	30,000
Opening capital on 1.4.2018	?
Loss for the year ending 31.3.2019	40,000

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Answers Key:

Generic 3

5 x 3 = 15

Limitations of incomplete records:
1) Lack of proper maintenance of records:
It is an unscientific and unsystematic way of maintaining records. Real and nominal account are not maintained properly.
2) Difficulty in preparing trial balance:
As account are not maintained for all items. The accounting record are incomplete. Hence, it is difficult to prepare trial balance to check the arithmetical accuracy of account.
3) Difficulty in ascertaining true profitability of the business:
Profit is found out based on available information and estimate. Hence, it is difficult to prepare ascertain true profit as the trading and profit and loss account cannot be prepared with accuracy.
4) Difficulty in ascertaining financial position:
In general, only the estimated values of asset and liabilities are available from incomplete records. Hence, it is difficult to ascertain true and fair view of state of affairs or financial position as on a particular date.
5) Errors and frauds Cannot be detected easily:
As only partial records are available. It may not be possible to have internal check in maintaining account to defect errors and Frauds.
6) Unacceptable to government and other authorities:
As accounts maintained are incomplete these may not comply with the legal requirement Hence government tax authorities and other. Legal authorities do not accept account prepared from incomplete rewards.

**Dr. Bills payable account Cr.**
Particulars	Rs	Particulars	Rs
To Cash A/c (bills paid)	1,00,000	By Balance b/d	60,000
To Balance c/d	80,000	By Sundry creditors A/c
		(Bills accepted - balancing figure)	1,20,000
	1,80,000		1,80,000

**Dr. Total creditors account Cr.**
Particulars	Rs.	Particulars	Rs.
To Cash A/c (paid)	3,70,000	By Balance b/d	75,000
To Purchases return A/c	15,000	By Purchases A/c (credit)	4,80,000
To Bills payable A/c	1,20,000	(balancing figure)
(bills accepted)
To Balance c/d	50,000
	5,55,000		5,55,000

Total purchases = Cash purchases + Credit purchases
= Rs. 3,20,000 + Rs. 4,80,000 = Rs. 8,00,000

In the books of David
Calculation of opening capital
Statement of affairs as on 1^stApril, 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^stMarch, 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)	2,75,000 20,000
	2,95,000 30,000
Less: Additional capital introduced during the year	2,95,000 30,000
Adjusted closing capital	2,65,000 2,50,000
Less: Opening capital (as on 1.4.2017)	2,65,000 2,50,000
Profit made during the year	15,000

**Statement of profit or loss for the year ended 31st March, 2019**
Particulars	Rs.
Closing capital (as on 31.3.2019)	1,90,000
Add: Drawings during the year	30,000
	2,20,000 50,000
Less: Additional capital introduced during the year	2,20,000 50,000
Adjusted closing capital	1,70,000 2,10,000
Less: Opening capital (as on 1.4.2018) (balancing figure)	1,70,000 2,10,000
Loss for the year ending 31.3.2019	(-) 40,000