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JAMB Principles of Accounts 2002 Question 42

Question 42

Incomplete Records

Given an incomplete record without sufficient information to determine profit, the necessary thing to do is to

  1. A.draw up the statement of affairs
  2. B.draw up a T-account to establish the amount
  3. C.compare the journal entries with the cash book
  4. D.cross-check the cash book for further information.
Show the answer and explanation

Answer: A (draw up the statement of affairs)

Explanation

Statements of affairs at the start and end give the capitals, and the change in capital gives the profit.