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JAMB Principles of Accounts 1997 Question 27

Question 27

Incomplete Records

In analyzing incomplete records, which of the following should be investigated?

  1. A.The general ledger
  2. B.The purchases day book and sales day book
  3. C.The nature of trading activities and the basis on which goods are sold
  4. D.The asset register together with the depreciation schedule.
Show the answer and explanation

Answer: C (The nature of trading activities and the basis on which goods are sold)

Explanation

With incomplete records there may be no proper books, so one first finds out the nature of the trade and how goods are sold (cash or credit, mark-up).