Class 11 Accountancy - Chapter Accounts from Incomplete Records NCERT Solutions | What practical difficulties are encounte
What practical difficulties are encountered by a trader due to incompleteness of accounting records?
The following are the difficulties that are encountered by a trader due to incompleteness of accounting records.
(i) Accuracy of Accounts : When incomplete records are maintained Arithmetical accuracy of accounts cannot be ensured.
(ii) Encourages Fraud : Incomplete records encourages fraud and provides sufficient scope for bluffing and carelessness.
(iii) Difficult to Analyse the True Financial Position : As profit or loss cannot be ascertained easily, so the Balance Sheet cannot be easily prepared. Hence, the absence of Balance Sheet will not reflect the true financial position of the business.
(iv) Difficulty in Comparison : Due to the incomplete records and non - availability of previous years date, comparison is not possible. Comparisons with other firms is also not possible.
(v) Unacceptable to Tax Authorities : Since they do not reflect the true and acceptable presentation of expenses and revenues. These are not acceptable by the tax authorities. Many other problems such as inconvenience in getting the profitability and liquidity of business, difficulty in getting fund from outside etc are encountered.
More Questions From Class 11 Accountancy - Chapter Accounts from Incomplete Records
- Q:-
Credit purchase, during the year is ascertained by preparing :
(a) Total creditors account (b) Total debtors account
(c) Cash account (d) Opening statement of affairs - Q:-
What are the possible reasons for keeping incomplete records?
- Q:-
Explain how the following may be ascertained from incomplete records:
(a) Opening capital and closing capital
(b) Credit sales and credit purchases
(c) Payments to creditors and collection from debtors
(d) Closing balance of cash. - Q:-
State the meaning of incomplete records?
- Q:-
Tick the correct answer :
Incomplete record mechanism of book keeping is :
(a) Scientific (b) Unscientific
(c) Unsystematic (d) both (b) and (c) - Q:-
Distinguish between statement of affairs and balance sheet.
- Q:-
Opening capital is ascertained by preparing :
(a) Total debtors account (b) Total creditors account
(c) Cash account (d) Opening statement of affairs - Q:-
Write the correct word(s) :
1. Credit sales can be ascertained as the balancing figure in the .......... account.
2. Excess of .......... over ......... represents loss sustained during the period.
3. To ascertain the profit, closing capital is to be adjusted by deducting .......... and adding ..........
4. Incomplete records are generally used by .......... - Q:-
If opening capital is Rs. 60,000, drawings Rs. 5,000, capital introduced during the period Rs. 10,000, closing capital Rs. 90,000. The value of profit earned during the period will be :
(a) Rs. 20,000 (b) Rs. 25,000
(c) Rs. 30,000 (d) Rs. 40,000 - Q:-
What is meant by a ‘statement of affairs’? How can the profit or loss of a trader be ascertained with the help of a statement of affairs?
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Record the rectification entry for the following transactions:
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