Theory question 103
Incomplete Records3. State five steps of converting incomplete records and single entry accounts to double entry accounts.
Show the model answer
Model answer
Any five steps: prepare an opening statement of affairs to find opening capital; prepare a cash and bank account summary to find missing figures (e.g. drawings); prepare total debtors and creditors accounts to find credit sales and purchases; prepare expense accounts adjusting for accruals and prepayments; prepare the trading and profit and loss account; prepare the closing balance sheet (capital + profit − drawings).
Explanation
Follow the order: statement of affairs, cash/bank, control accounts, expenses, final accounts.