Acca financial Accounting (FA) Study Text ac ca (FA)

What was the profit/loss (before tax) made by Andy Carp Co for the 

year ended 31 December 20X8? 

A $2,250 

B $2,450 

C $2,050 

D $9,400 

---

 

Incomplete records 

328

 

KAPLAN PUBLISHING

 

4 

The ledger account (balancing figure) approach 

The balancing figure approach, using ledger accounts, is commonly used in the 

following way: 

Ledger account  

Missing figure 

Receivables  

Credit sales, Money received from receivables 

Payables  

Credit purchases, Money paid to payables 

Cash at bank  

Drawings, Money stolen 

Cash in hand  

Cash sales, Cash stolen 

 

Cash at bank 

 $ 

 $ 

Cash received from 

customers 

X 

Cash paid to suppliers 

X 

Banking’s from cash in hand 

X 

Expenses 

X 

Sundry income 

X 

Drawings 

X 

  

Money 

stolen 

X 

  

Balance 

c/f 

X 

 –––– 

 –––– 

Balance b/f 

X 

 

X 

 –––– 

 –––– 

 

Cash in hand 

 $ 

 $ 

Cash sales 

X 

Cash purchases 

X 

Sundry income 

X 

Sundry Expenses 

X 

  

Bankings 

X 

  

Money 

stolen 

X 

  

Balance 

c/f 

X 

 –––– 

 –––– 

Balance b/f 

X 

 

X 

 –––– 

 –––– 

 

 

 

---

 

Chapter 18 

KAPLAN PUBLISHING

 

329 

In the case of receivables and payables, you may need to use total receivables 

and total payables accounts where information given cannot be split between 

cash and credit sales and purchases: 

Total receivables 

 $ 

 $ 

Balance b/f 

X 

Total cash received in 

respect of sales (from cash 

and credit customers) 

X 

Total sales (cash and credit) 

X 

 

 

 X 

Balance 

c/f 

X 

 –––– 

 –––– 

Balance b/f 

X 

 

X 

 –––– 

 –––– 

 

Total payables 

 $ 

 $ 

  

Balance 

b/f 

X 

Total cash paid in respect of 

purchases (cash purchases 

and payments to credit 

suppliers) 

X 

Total purchases (cash and 

credit) 

X 

 –––– 

 –––– 

Balance c/f 

X 

Balance b/f 

X 

 –––– 

 –––– 

 

 

Test your understanding 2 

 

Receivables at the start of the accounting period for B Rubble’s business 

were $30,000. There were total receipts from customers of $55,000 of 

which $15,000 related to cash sales and $40,000 related to receipts 

from receivables. Contras with payables in the year totalled $3,000 and 

closing receivables were $37,000. 

What were total sales for the year? 

A $65,000 

B $50,000 

C $47,000 

D $62,000 

 

 

 

---

 

Incomplete records 

330

 

KAPLAN PUBLISHING

 

 

Test your understanding 3 

 

The opening payables of Dick Dastard-Lee’s business were $15,000. 

Total payments made to suppliers during the year were $14,000. 

Discounts received were $500 and closing payables were $13,000. 

What were total purchases for the year? 

A $16,500 

B $18,000 

C $12,000 

D $12,500 

Questions may require you to calculate ‘missing’ figures from the statement of 

profit or loss, for example rent and rates values, from a list of information 

including payments and opening/closing accruals and prepayments. 

To calculate the missing value for each expense use either: 

•

 T-accounts, 

or 

•

 Equations 

 

Test your understanding 4 

 

The following information relates to Ivor Big-Head’s business: 

On 1 January 

Electricity accrued 

$250 

 Rent 

prepaid 

$300 

Cash paid in the year  Electricity 

$1,000 

 Rent 

$2,000 

On 31 December 

Electricity accrued 

$300 

 Rent 

prepaid 

$400 

What are the charges for electricity and rent in the statement of 

profit or loss for the year? 

 

Electricity Rent 

 $  $ 

A 1,050 2,100 

B 1,050 1,900 

C 950 

1,900 

D 950 

2,100 

 

 

 

 

---

 

Chapter 18 

KAPLAN PUBLISHING

 

331 

 

Test your understanding 5 

 

On 1 January Elma Fudd’s bank account is overdrawn by $1,367. 

Payments in the year totalled $8,536 and on 31 December the closing 

balance is $2,227 (positive). 

What are total receipts for the year? 

A $4,942 

B $7,676 

C $9,396 

D $12,130 

 

 

Test your understanding 6 

 

On 1 January, Daisee Chain's business had a cash float of $900. During 

the year cash of $10,000 was banked, $1,000 was paid out as drawings 

and wages of $2,000 were paid. On 31 December the float was $1,000. 

How much cash was received from customers for the year? 

A $12,900 

B $14,900 

C $13,100 

D $6,900 

5 

Using cash/bank summaries 

The use of bank summaries is similar to the ledger account approach. This 

method assumes that, whilst data may be missing from the ledger accounts, a 

company can always reconstruct their cash inflows and outflows using either 

the cash book or bank statements, or both. 

 

 

Illustration 1 

 

During the year ended 31 July 20X9 Collins Co lost some of its 

accounting data due to a computer virus. Whilst it managed to 

reconstruct elements of its financial statements it needs some help 

determining sales revenue for the year. 

The closing trade receivables figure at 31 July 20X8, taken from the 

prior year's statement of financial position, was $98,425. You have 

reviewed the list of receivables (the memorandum) and calculated that 

the receivables outstanding at 31 July 20X9 total $107,550. After 

discussions with management you also determine that shortly prior to 

the year-end $1,500 of trade receivables were written off as 

irrecoverable. 

 

---