Accounts from Incomplete Records
Single Entry System | Class XI - WBCHSE
Introduction to Incomplete Records
📖 What are Incomplete Records?
Incomplete records refer to a system of accounting where complete double entry records are not maintained. This system is also known as Single Entry System. Small businesses often maintain only essential records like cash book, personal accounts of debtors and creditors.
📌 Key Characteristics
- No Trial Balance: Since complete records are not maintained, trial balance cannot be prepared
- Personal Accounts Only: Only personal accounts of debtors and creditors are maintained
- Cash Records: Cash book is maintained but not always systematically
- No Real & Nominal Accounts: Real and nominal accounts are not maintained properly
- Profit Ascertainment: Profit is ascertained by preparing Statement of Affairs
📊 Methods to Ascertain Profit
| Method | Description | When Used |
|---|---|---|
| Statement of Affairs Method | Comparing capital at two dates | When only assets and liabilities are known |
| Conversion Method | Converting single entry to double entry | When detailed records are available |
Statement of Affairs (Opening & Closing)
📚 Concept Overview
Statement of Affairs is similar to a Balance Sheet but prepared from incomplete records. It helps in finding the capital at a particular date. The difference between closing capital and opening capital (after adjustments) gives the profit or loss.
🔢 Formula for Profit Calculation
Profit = Closing Capital - Opening Capital + Drawings - Additional Capital Introduced
📝 Problem 1: Statement of Affairs
Question: Mr. Ramesh does not maintain proper books of accounts. From the following information, prepare Statement of Affairs as on 1st April 2024 and 31st March 2025, and calculate the profit or loss for the year:
| Particulars | 1st April 2024 (₹) | 31st March 2025 (₹) |
|---|---|---|
| Cash in Hand | 15,000 | 22,000 |
| Cash at Bank | 45,000 | 68,000 |
| Stock | 80,000 | 95,000 |
| Sundry Debtors | 60,000 | 75,000 |
| Furniture | 40,000 | 38,000 |
| Machinery | 1,20,000 | 1,10,000 |
| Sundry Creditors | 50,000 | 65,000 |
| Outstanding Expenses | 10,000 | 8,000 |
Additional Information:
- Drawings during the year: ₹48,000
- Additional Capital introduced: ₹30,000
✅ Solution
Statement of Affairs as on 1st April 2024
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Sundry Creditors | 50,000 | Cash in Hand | 15,000 |
| Outstanding Expenses | 10,000 | Cash at Bank | 45,000 |
| Capital (Balancing Figure) | 3,00,000 | Stock | 80,000 |
| Sundry Debtors | 60,000 | ||
| Furniture | 40,000 | ||
| Machinery | 1,20,000 | ||
| Total | 3,60,000 | Total | 3,60,000 |
Statement of Affairs as on 31st March 2025
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Sundry Creditors | 65,000 | Cash in Hand | 22,000 |
| Outstanding Expenses | 8,000 | Cash at Bank | 68,000 |
| Capital (Balancing Figure) | 3,35,000 | Stock | 95,000 |
| Sundry Debtors | 75,000 | ||
| Furniture | 38,000 | ||
| Machinery | 1,10,000 | ||
| Total | 4,08,000 | Total | 4,08,000 |
Calculation of Profit
| Closing Capital (31st March 2025) | ₹3,35,000 |
| Add: Drawings | ₹48,000 |
| ₹3,83,000 | |
| Less: Additional Capital Introduced | ₹30,000 |
| ₹3,53,000 | |
| Less: Opening Capital (1st April 2024) | ₹3,00,000 |
| Profit for the Year | ₹53,000 |
Cash Book Problems
📚 Concept Overview
In incomplete records, the cash book is often maintained partially. To find missing figures like total receipts, payments, or closing balance, we prepare a summarized cash account.
🔢 Cash Account Format
Opening Balance + Receipts = Payments + Closing Balance
📝 Problem 2: Cash Book Problem
Question: Mr. Suresh maintains incomplete records. From the following information, prepare Cash Account and find out the missing figures:
| Particulars | Amount (₹) |
|---|---|
| Cash in Hand (1st April 2024) | 25,000 |
| Cash Sales during the year | 2,80,000 |
| Cash received from Debtors | 1,85,000 |
| Additional Capital introduced | 50,000 |
| Cash Purchases | 1,60,000 |
| Cash paid to Creditors | 1,45,000 |
| Wages Paid | 48,000 |
| Rent Paid | 36,000 |
| Drawings | 60,000 |
| Sundry Expenses | 28,000 |
| Furniture Purchased | 35,000 |
✅ Solution
Cash Account for the Year ending 31st March 2025
| Receipts (Dr.) | Amount (₹) | Payments (Cr.) | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 25,000 | By Cash Purchases | 1,60,000 |
| To Cash Sales | 2,80,000 | By Creditors | 1,45,000 |
| To Debtors | 1,85,000 | By Wages | 48,000 |
| To Capital (Additional) | 50,000 | By Rent | 36,000 |
| By Drawings | 60,000 | ||
| By Sundry Expenses | 28,000 | ||
| By Furniture | 35,000 | ||
| By Balance c/d (Balancing) | 28,000 | ||
| Total | 5,40,000 | Total | 5,40,000 |
Working Notes
| Total Receipts | ₹5,40,000 |
| Total Payments (excluding closing balance) | ₹5,12,000 |
| Closing Cash Balance (Balancing Figure) | ₹28,000 |
Debtors Account Problems
📚 Concept Overview
Total Debtors Account is prepared to find missing figures like credit sales, cash received from debtors, bad debts, discount allowed, or closing balance of debtors.
🔢 Debtors Account Format
Opening Debtors + Credit Sales = Cash Received + Discount Allowed + Bad Debts + Returns Inward + Closing Debtors
📝 Problem 3: Debtors Account
Question: From the following particulars, prepare Total Debtors Account and find out the Credit Sales:
| Particulars | Amount (₹) |
|---|---|
| Debtors on 1st April 2024 | 85,000 |
| Debtors on 31st March 2025 | 1,05,000 |
| Cash received from Debtors | 3,20,000 |
| Discount Allowed | 8,000 |
| Bad Debts written off | 5,000 |
| Returns Inward | 12,000 |
| Bills Receivable received from Debtors | 25,000 |
✅ Solution
Total Debtors Account
| Particulars (Dr.) | Amount (₹) | Particulars (Cr.) | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 85,000 | By Cash/Bank | 3,20,000 |
| To Credit Sales (Balancing Figure) | 3,90,000 | By Discount Allowed | 8,000 |
| By Bad Debts | 5,000 | ||
| By Returns Inward | 12,000 | ||
| By Bills Receivable | 25,000 | ||
| By Balance c/d | 1,05,000 | ||
| Total | 4,75,000 | Total | 4,75,000 |
Calculation of Credit Sales
| Cash received from Debtors | ₹3,20,000 |
| Add: Discount Allowed | ₹8,000 |
| Add: Bad Debts | ₹5,000 |
| Add: Returns Inward | ₹12,000 |
| Add: Bills Receivable | ₹25,000 |
| Add: Closing Debtors | ₹1,05,000 |
| ₹4,75,000 | |
| Less: Opening Debtors | ₹85,000 |
| Credit Sales | ₹3,90,000 |
Creditors Account Problems
📚 Concept Overview
Total Creditors Account is prepared to find missing figures like credit purchases, cash paid to creditors, discount received, or closing balance of creditors.
🔢 Creditors Account Format
Opening Creditors + Credit Purchases = Cash Paid + Discount Received + Returns Outward + Closing Creditors
📝 Problem 4: Creditors Account
Question: From the following information, prepare Total Creditors Account and find the closing balance of Creditors:
| Particulars | Amount (₹) |
|---|---|
| Creditors on 1st April 2024 | 72,000 |
| Credit Purchases during the year | 2,85,000 |
| Cash paid to Creditors | 2,50,000 |
| Discount Received | 6,000 |
| Returns Outward | 9,000 |
| Bills Payable issued to Creditors | 18,000 |
✅ Solution
Total Creditors Account
| Particulars (Dr.) | Amount (₹) | Particulars (Cr.) | Amount (₹) |
|---|---|---|---|
| To Cash/Bank | 2,50,000 | By Balance b/d | 72,000 |
| To Discount Received | 6,000 | By Credit Purchases | 2,85,000 |
| To Returns Outward | 9,000 | ||
| To Bills Payable | 18,000 | ||
| To Balance c/d (Balancing) | 74,000 | ||
| Total | 3,57,000 | Total | 3,57,000 |
Calculation of Closing Creditors
| Opening Creditors | ₹72,000 |
| Add: Credit Purchases | ₹2,85,000 |
| ₹3,57,000 | |
| Less: Cash Paid | ₹2,50,000 |
| Less: Discount Received | ₹6,000 |
| Less: Returns Outward | ₹9,000 |
| Less: Bills Payable | ₹18,000 |
| Closing Creditors | ₹74,000 |
Cash + Debtors + Creditors Combined Problem
📚 Concept Overview
Combined problems require preparation of multiple accounts (Cash, Debtors, Creditors) to find various missing figures. These problems test comprehensive understanding of incomplete records.
📝 Problem 5: Combined Problem
Question: Mr. Anand maintains incomplete records. From the following information, prepare Cash Account, Total Debtors Account, and Total Creditors Account to find: (a) Total Sales, (b) Total Purchases, (c) Closing Cash Balance:
| Particulars | 1st April 2024 (₹) | 31st March 2025 (₹) |
|---|---|---|
| Debtors | 65,000 | 78,000 |
| Creditors | 48,000 | 55,000 |
| Cash in Hand | 18,000 | ? |
During the Year:
| Cash Sales | ₹1,80,000 |
| Cash Purchases | ₹95,000 |
| Cash received from Debtors | ₹2,45,000 |
| Cash paid to Creditors | ₹1,78,000 |
| Discount Allowed | ₹7,000 |
| Discount Received | ₹4,000 |
| Bad Debts | ₹3,000 |
| Returns Inward | ₹5,000 |
| Returns Outward | ₹4,000 |
| Wages Paid | ₹35,000 |
| Rent Paid | ₹24,000 |
| Drawings | ₹30,000 |
✅ Solution
Step 1: Total Debtors Account (To find Credit Sales)
| Particulars (Dr.) | Amount (₹) | Particulars (Cr.) | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 65,000 | By Cash | 2,45,000 |
| To Credit Sales (Balancing) | 2,73,000 | By Discount Allowed | 7,000 |
| By Bad Debts | 3,000 | ||
| By Returns Inward | 5,000 | ||
| By Balance c/d | 78,000 | ||
| Total | 3,38,000 | Total | 3,38,000 |
Credit Sales = ₹2,73,000
Total Sales = Cash Sales + Credit Sales = ₹1,80,000 + ₹2,73,000 = ₹4,53,000
Step 2: Total Creditors Account (To find Credit Purchases)
| Particulars (Dr.) | Amount (₹) | Particulars (Cr.) | Amount (₹) |
|---|---|---|---|
| To Cash | 1,78,000 | By Balance b/d | 48,000 |
| To Discount Received | 4,000 | By Credit Purchases (Balancing) | 1,93,000 |
| To Returns Outward | 4,000 | ||
| To Balance c/d | 55,000 | ||
| Total | 2,41,000 | Total | 2,41,000 |
Credit Purchases = ₹1,93,000
Total Purchases = Cash Purchases + Credit Purchases = ₹95,000 + ₹1,93,000 = ₹2,88,000
Step 3: Cash Account (To find Closing Cash Balance)
| Receipts (Dr.) | Amount (₹) | Payments (Cr.) | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 18,000 | By Cash Purchases | 95,000 |
| To Cash Sales | 1,80,000 | By Creditors | 1,78,000 |
| To Debtors | 2,45,000 | By Wages | 35,000 |
| By Rent | 24,000 | ||
| By Drawings | 30,000 | ||
| By Balance c/d (Balancing) | 81,000 | ||
| Total | 4,43,000 | Total | 4,43,000 |
Closing Cash Balance = ₹81,000
Creditors & Credit Purchases Problem
📚 Concept Overview
This type of problem focuses on finding credit purchases when information about creditors, payments, and other related items are given.
📝 Problem 6: Credit Purchases
Question: From the following information, calculate Credit Purchases for the year:
| Particulars | Amount (₹) |
|---|---|
| Creditors on 1st April 2024 | 92,000 |
| Creditors on 31st March 2025 | 1,08,000 |
| Cash paid to Creditors | 3,85,000 |
| Discount Received from Creditors | 12,000 |
| Returns Outward | 15,000 |
| Bills Payable accepted | 28,000 |
| Creditors written off | 4,000 |
✅ Solution
Total Creditors Account
| Particulars (Dr.) | Amount (₹) | Particulars (Cr.) | Amount (₹) |
|---|---|---|---|
| To Cash/Bank | 3,85,000 | By Balance b/d | 92,000 |
| To Discount Received | 12,000 | By Credit Purchases (Balancing) | 4,60,000 |
| To Returns Outward | 15,000 | ||
| To Bills Payable | 28,000 | ||
| To Creditors Written Off | 4,000 | ||
| To Balance c/d | 1,08,000 | ||
| Total | 5,52,000 | Total | 5,52,000 |
Calculation of Credit Purchases
| Cash paid to Creditors | ₹3,85,000 |
| Add: Discount Received | ₹12,000 |
| Add: Returns Outward | ₹15,000 |
| Add: Bills Payable | ₹28,000 |
| Add: Creditors Written Off | ₹4,000 |
| Add: Closing Creditors | ₹1,08,000 |
| ₹5,52,000 | |
| Less: Opening Creditors | ₹92,000 |
| Credit Purchases | ₹4,60,000 |
Profit by Conversion Method
📚 Concept Overview
The Conversion Method involves converting incomplete records into complete double entry system. This method prepares Trading and Profit & Loss Account to find the profit or loss.
🔢 Steps in Conversion Method
- Prepare Opening Statement of Affairs to find Opening Capital
- Prepare Total Debtors Account to find Credit Sales
- Prepare Total Creditors Account to find Credit Purchases
- Prepare Cash/Bank Account if required
- Prepare Trading Account to find Gross Profit
- Prepare Profit & Loss Account to find Net Profit
- Prepare Closing Balance Sheet
📝 Problem 7: Conversion Method
Question: Mrs. Priya does not maintain complete books of accounts. From the following information, prepare Trading and Profit & Loss Account for the year ending 31st March 2025 and Balance Sheet as on that date:
Balances as on:
| Particulars | 1st April 2024 (₹) | 31st March 2025 (₹) |
|---|---|---|
| Cash in Hand | 12,000 | 18,000 |
| Cash at Bank | 35,000 | 48,000 |
| Stock | 55,000 | 68,000 |
| Debtors | 42,000 | 52,000 |
| Creditors | 38,000 | 45,000 |
| Furniture | 25,000 | 23,000 |
| Building | 1,50,000 | 1,45,000 |
Additional Information:
| Cash Sales | ₹1,85,000 |
| Cash received from Debtors | ₹1,65,000 |
| Cash Purchases | ₹78,000 |
| Cash paid to Creditors | ₹1,42,000 |
| Discount Allowed | ₹5,000 |
| Discount Received | ₹3,000 |
| Bad Debts | ₹2,000 |
| Wages | ₹28,000 |
| Salaries | ₹36,000 |
| Rent | ₹18,000 |
| Drawings | ₹24,000 |
| Depreciation: Furniture | ₹2,000 |
| Depreciation: Building | ₹5,000 |
✅ Solution
Step 1: Opening Statement of Affairs (as on 1st April 2024)
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Creditors | 38,000 | Cash in Hand | 12,000 |
| Capital (Balancing) | 2,81,000 | Cash at Bank | 35,000 |
| Stock | 55,000 | ||
| Debtors | 42,000 | ||
| Furniture | 25,000 | ||
| Building | 1,50,000 | ||
| Total | 3,19,000 | Total | 3,19,000 |
Step 2: Total Debtors Account (Credit Sales)
| Dr. | Amount (₹) | Cr. | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 42,000 | By Cash | 1,65,000 |
| To Credit Sales (Bal.) | 1,82,000 | By Discount Allowed | 5,000 |
| By Bad Debts | 2,000 | ||
| By Balance c/d | 52,000 | ||
| Total | 2,24,000 | Total | 2,24,000 |
Credit Sales = ₹1,82,000
Total Sales = ₹1,85,000 + ₹1,82,000 = ₹3,67,000
Step 3: Total Creditors Account (Credit Purchases)
| Dr. | Amount (₹) | Cr. | Amount (₹) |
|---|---|---|---|
| To Cash | 1,42,000 | By Balance b/d | 38,000 |
| To Discount Received | 3,000 | By Credit Purchases (Bal.) | 1,52,000 |
| To Balance c/d | 45,000 | ||
| Total | 1,90,000 | Total | 1,90,000 |
Credit Purchases = ₹1,52,000
Total Purchases = ₹78,000 + ₹1,52,000 = ₹2,30,000
Step 4: Trading and Profit & Loss Account for the year ending 31st March 2025
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| Trading Account | |||
| To Opening Stock | 55,000 | By Sales | 3,67,000 |
| To Purchases | 2,30,000 | By Closing Stock | 68,000 |
| To Wages | 28,000 | ||
| To Gross Profit c/d | 1,22,000 | ||
| Total | 4,35,000 | Total | 4,35,000 |
| Profit & Loss Account | |||
| To Salaries | 36,000 | By Gross Profit b/d | 1,22,000 |
| To Rent | 18,000 | By Discount Received | 3,000 |
| To Discount Allowed | 5,000 | ||
| To Bad Debts | 2,000 | ||
| To Depreciation: | |||
| Furniture | 2,000 | ||
| Building | 5,000 | ||
| To Net Profit (transferred to Capital) | 57,000 | ||
| Total | 1,25,000 | Total | 1,25,000 |
Step 5: Balance Sheet as on 31st March 2025
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Creditors | 45,000 | Cash in Hand | 18,000 |
| Capital: | Cash at Bank | 48,000 | |
| Opening Capital | 2,81,000 | Stock | 68,000 |
| Add: Net Profit | 57,000 | Debtors | 52,000 |
| 3,38,000 | Furniture | 23,000 | |
| Less: Drawings | 24,000 | Building | 1,45,000 |
| 3,14,000 | |||
| Total | 3,59,000 | Total | 3,59,000 |
Bills Receivable / Bills Payable Problems
📚 Concept Overview
Bills Receivable (B/R) is received from debtors, while Bills Payable (B/P) is issued to creditors. These affect the Debtors and Creditors accounts respectively.
🔢 Bills Receivable Account Format
Opening B/R + B/R Received = B/R Collected + B/R Dishonoured + B/R Endorsed + Closing B/R
🔢 Bills Payable Account Format
Opening B/P + B/P Accepted = B/P Paid + B/P Dishonoured + Closing B/P
📝 Problem 8: Bills Receivable & Bills Payable
Question: From the following information, prepare Total Debtors Account and Bills Receivable Account:
| Particulars | 1st April 2024 (₹) | 31st March 2025 (₹) |
|---|---|---|
| Debtors | 75,000 | 88,000 |
| Bills Receivable | 22,000 | 28,000 |
During the Year:
| Cash received from Debtors | ₹2,85,000 |
| Discount Allowed | ₹8,000 |
| Bad Debts | ₹4,000 |
| Returns Inward | ₹6,000 |
| Bills Receivable received from Debtors | ₹45,000 |
| Bills Receivable collected (realised) | ₹32,000 |
| Bills Receivable endorsed to Creditors | ₹7,000 |
✅ Solution
Bills Receivable Account
| Particulars (Dr.) | Amount (₹) | Particulars (Cr.) | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 22,000 | By Cash/Bank (Collected) | 32,000 |
| To Debtors (B/R Received) | 45,000 | By Creditors (Endorsed) | 7,000 |
| By Balance c/d | 28,000 | ||
| Total | 67,000 | Total | 67,000 |
Total Debtors Account
| Particulars (Dr.) | Amount (₹) | Particulars (Cr.) | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 75,000 | By Cash/Bank | 2,85,000 |
| To Credit Sales (Balancing) | 3,61,000 | By Discount Allowed | 8,000 |
| By Bad Debts | 4,000 | ||
| By Returns Inward | 6,000 | ||
| By Bills Receivable | 45,000 | ||
| By Balance c/d | 88,000 | ||
| Total | 4,36,000 | Total | 4,36,000 |
Calculation of Credit Sales
| Cash received from Debtors | ₹2,85,000 |
| Add: Discount Allowed | ₹8,000 |
| Add: Bad Debts | ₹4,000 |
| Add: Returns Inward | ₹6,000 |
| Add: Bills Receivable | ₹45,000 |
| Add: Closing Debtors | ₹88,000 |
| ₹4,36,000 | |
| Less: Opening Debtors | ₹75,000 |
| Credit Sales | ₹3,61,000 |
Flowchart: Incomplete Records Process
Mind Map: Incomplete Records
Roadmap: Learning Incomplete Records
Foundation Phase
Statement of Affairs Method
Cash Book Analysis
Debtors & Creditors Accounts
Bills of Exchange
Conversion Method
Mastery Level
Important Formulas Summary
Capital Calculation
Capital = Total Assets - Total Liabilities
Profit Calculation
Profit = Closing Capital - Opening Capital + Drawings - Additional Capital
Credit Sales
Credit Sales = Cash from Debtors + Closing Debtors + Discount + Bad Debts + Returns + B/R - Opening Debtors
Credit Purchases
Credit Purchases = Cash to Creditors + Closing Creditors + Discount + Returns + B/P - Opening Creditors
Total Sales
Total Sales = Cash Sales + Credit Sales
Total Purchases
Total Purchases = Cash Purchases + Credit Purchases