Tag: preparation of final accounts from incomplete records

Questions Related to preparation of final accounts from incomplete records

Loss of stock is said to be normal loss when such loss is not due to inherent characteristics of the commodities.

elements of book keeping and accountancy accounting from incomplete records ascertaining profit or loss from incomplete records meaning and preparation of statement of profit meaning of incomplete records, reasons for incompleteness and its limitations preparation of final accounts from incomplete records preparation of statement of affairs introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

  1. True

  2. False

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Correct Option: B

Capital on 1 January Rs.65,000, Interest on drawing Rs.5,000, Interest on Capital Rs.2,000, Drawings Rs.14,000, Profit for the year Rs.15,000. His capital as on 31 December will be _____________.

elements of book keeping and accountancy accounting from incomplete records ascertaining profit or loss from incomplete records meaning and preparation of statement of profit meaning of incomplete records, reasons for incompleteness and its limitations preparation of final accounts from incomplete records preparation of statement of affairs introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

  1. Rs. 67,000

  2. Rs.63,000

  3. Rs.77,000

  4. Rs.89,000

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Correct Option: B
Explanation:
 PARTICULARS  AMT RS.
 Capital at the beginning of the year  65,000
 less: drawings  14,000
 less: int. on drawings   5,000
 add: int.on capital   2,000
 add: profit for the year  15,000
   
 Capital at the end of the year  63,000

Profit = Capital at the end+______- Capital introduced - Capital in the beginning.

elements of book keeping and accountancy accounting from incomplete records ascertaining profit or loss from incomplete records meaning and preparation of statement of profit meaning of incomplete records, reasons for incompleteness and its limitations preparation of final accounts from incomplete records preparation of statement of affairs introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

  1. Sales

  2. Drawings

  3. Loan

  4. Net Purchases

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Correct Option: B
Explanation:

Profit is calculated by the taking into account the fluctuations of the capital at the beginning and at the end of the year, by adding the drawings, and deducting the capital introduced to the capital at the end of the year.  

Trading and Profit and Loss Account cannot be prepared from books maintained on single entry basis because :

elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

  1. Nominal accounts are not maintained in the ledger.

  2. Real accounts are not maintained in the ledger.

  3. Personal accounts are not maintained in the ledger.

  4. All of the above

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Correct Option: A

Difference between the opening and closing capital after adjusting drwaings and capitals introduced during the year is profit for the year.

elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

  1. True

  2. False

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Correct Option: A

Profit, under Single Entry System is ascertained ____________ .

elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

  1. by preparing Profit and Loss Account.

  2. by preparing Statement of Affairs

  3. by preparing Cash Account

  4. all of the above

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Correct Option: B

A statement of affairs is a summarised statement of an estimated _____________.

elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

  1. Financial position

  2. Profit

  3. Income

  4. Loss

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Correct Option: A
Explanation:

To ascertain the Capital, Statements of affairs are prepared.
Capital = Assets - Liabilities
The above equation under which statement of affairs are prepared reflects the financial position of the business.

The capital at the end of the accounting year is ascertained by preparing _______.

elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

  1. Cash Account

  2. Closing statement of affairs

  3. Total debtors account

  4. Opening statement of affairs

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Correct Option: B
Explanation:

Statement of Affairs is Based under Accounting Equation " Assets = Capital + Liabilities"
thus to ascertain the Closing Capital at the end of the year  Closing Liabilities are deducted from closing assets.

The difference between assets and liabilities is called as ___________.

elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

  1. Capital

  2. Drawings

  3. Incomes

  4. Expenses

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Correct Option: A
Explanation:

As assets represents the total funds applied in the business from capital (owners fund) and liabilities(external funds e.g bank loan, creditors etc).
therefore the difference between Assets and Liabilities will represent Capital.

Find the total assets at the end of the year if net profit, drawing during the year and assets at the of beginning of the year were 12,000, 7000 and 20,000 respectively. 

elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

  1. 25,000

  2. 15,000

  3. 9,000

  4. 8,000

Show answer
Correct Option: A
Explanation:

Calculation of total assets at the end of the year :- 

 Assets in the beginning of the year =Rs 20000
Less : Drawing made during the year (7000)
Add : Net profit for the year                  12000
                                                            = Rs 25000