Question by C.A.(Dr.) G.S.Grewal – Series 75
- Accounts from Incomplete Records is an unscientific method of accounting as it does not follow Dual Aspect Concept.
- Statement of Affairs shows only the ___________ financial position of the business.
- Capital in the beginning of the accounting year is determined by preparing:
(a) Debtors’ Account.
(b) Cash Account.
(c) Opening Statement of Affairs.
(d) Creditors’ Account.
Answer – Series 75
Reason: This system is incomplete and unscientific as both the aspects of a transaction are not recorded and no set rules are followed for recording them.
Reason: Capital in the beginning of the accounting year is determined by preparing the Opening Statement of Affairs by making adjustments to closing capital for Drawings, Profit for the year and Capital in hand and or withdrawn.
Question – Series 76
- Under Single Entry System of Accounting, one aspect of each transaction is recorded.
- Statement of Affairs in the beginning shows _________________.
- System of preparing Accounts from Incomplete Records can be adopted by
(a) Small Firms
(c) Registered Co-operative Societies
(d) Any enterprise
Answer – Series 76
Reason: Under this system, both aspects of transaction are not recorded. In fact, for some transactions two aspects, for some others one aspect and yet for others no aspect at all are recorded.
- capital in the beginning
Reason: System of preparing Accounts from Incomplete Records can be adopted by small firms only. It is mainly suited to small business concerns with limited number of transactions and very few assets and liabilities.