Accounts from incomplete records

Accounts from incomplete records

• 1.
  N.Srinivas Rao Academy ofCommerce Education, Cuttack [email protected]
• 2.
   High costof record keeping  Lack of knowledge  Time  Lack of awareness for the need of financial records Found in Small Businesses and hence can be termed as Micro Business Accounting(MBA).
• 3.
   Cash transactions  Credit transactions of revenue goods and capital goods in the personal accounts of Suppliers and Customers.  Double entry completed for cash receipts and payments on account of Customers and Suppliers.  Non recurring transactions like purchase of fixed assets, borrowings etc.
• 4.
   No, ifonly approximate profit is to be determined.  Yes, if the results of operations and financial position are to be determined which is required • for filing Income Tax Returns; • to obtain loans from financial institutions; • to analyse the financial statements in a meaningful manner and understand for making rational decisions.
• 6.
  Put the figuresof assets and liabilities of two different points of time in accounting equation Reconcile the resultant figures of Equities of the two points of time to determine the profit. The assets and liabilities may be put in a statement form like Balance sheet and such statement is called ‘Statement of Affairs’.
• 7.
  Name of Statement- Statement of Profit Capital on the Closing date 15000 Add: Drawings 6000 Less: Capital introduced between the two dates -5000 Less: Capital at the opening date -10000 Profit for the year(Bal. Fig.) 6000 Figures are in the unit of currency and are illustrative.
• 9.
  Determine all majoritems of incomes and expenses, as nominal accounts are not maintained.
• 10.
  Items Accounts to be referred Credit Sales Accounts Receivables (Debtors, Bills Receivables) Cash Sales Cash and Bank Transactions Credit Purchases Accounts Payables (Creditors, Bills Payables) Cash Purchases Cash and Bank Transactions Other recurring expenses(Salary, Rent Cash and Bank Transactions, etc.) Information collected on Outstanding and Prepaid
• 11.
   Credit sales  CreditPurchases  Collection from  Payment to Creditors Customers  Opening and Closing  Opening and Closing Balances of Creditors Balances of Debtors  Acceptance given  Bills Accepted  Cash Purchases  Cash Sales
• 12.
   Profitability Ratios Liquidity Ratios  Average Collection Period/ Debtors Turnover Ratio  Average Payment Period/ Creditors Turnover Ratio  Average Holding period/Inventory Turnover Ratio