Summary about Incomplete records
Incomplete records accounts is preparing accounts in the following situations,
- A trader does not maintain a ledger and therefore has no continuous double entry record of transactions.
- Accounting records are destroyed by accident, such as fire.
- Some essential figure is unknown and must be calculated as a balancing figure. This may occur as a result of stock being damaged or destroyed, or because of misappropriation of assets.
The approach to incomplete records questions is to build up the information given so as to complete the necessary double entry. This may involve reconstructing control accounts for:
- Cash and bank
- Debtors and creditors
Where stock, sales or purchases is the unknown figure it will be necessary to use information or gross profit percentage so as to construct a trading account in which the unknown figure can be inserted as a balance.
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