I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART F: PREPARING BASIC FINANCIAL STATEMENTS 

 

292

 

 

Study Guide 

Intellectual level 

 

 

F 

Preparing basic financial statements 

 

 

 

6 Incomplete 

records 

 

 

 

(a)  Understand and apply techniques used in incomplete record 

situations. 

S 

 

 

(i) 

Use of accounting equation 

 

 

 

(ii) 

Use of ledger accounts to calculate missing figures  

 

 

 

(iii) 

Use of cash and/or bank summaries 

 

 

 

(iv) 

Use of profit percentages to calculate missing figures 

 

 

 

 

 

 

 

1

   Incomplete records questions 

Incomplete records questions may test your ability to prepare accounts in the following situations. 

 

A trader does not maintain a ledger and therefore has no continuous double entry record of 

transactions. 

 

Accounting records are destroyed by accident, such as fire. 

 

Some essential figure is unknown and must be calculated as a balancing figure. This may occur as 

a result of inventory being damaged or destroyed, or because of misappropriation of assets. 

Incomplete records problems occur when a business does not have a full set of accounting records for 

one of the following reasons. 

 

The proprietor of the business does not keep a full set of accounts. 

 

Some of the business accounts are accidentally lost or destroyed. 

The problem for the accountant is to prepare a set of year-end accounts for the business; ie a statement 

of profit or loss and a statement of financial position. Since the business does not have a full set of 

accounts, preparing the final accounts is not a simple matter of closing off accounts and transferring 

balances to the profit or loss account, or showing outstanding balances in the statement of financial 

position. The task of preparing the final accounts involves the following. 

(a) Establishing 

the