Write any three defects of Incomplete Records.

Question

✓

Answer

Single Entry System is an incomplete and insufficient system of information, hence it has the following disadvantages:

Arithmetical Accuracy cannot be Proved: Trial Balance cannot be prepared hence, arithmetical accuracy of books cannot be proved or tested. Chances of error mischief or fraud remaining undetected are high.
No Control on Assets: Since assets accounts are not maintained, it is difficult to keep full control, in order to avoid misappropriations of assets.
Correct Profit or Loss cannot be Determined: Trading and Profit and Loss Account cannot be prepared hence, correct profit earned or loss incurred during the accounting period cannot be determined.

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	₹
Capital at the end of the year.	5,00,000
Capital in the beginning of the year.	7,50,000
Drawings made during the period.	3,75,000
Additional Capital introduced.	50,000

	₹
Capital at the beginning of the year,	70,000
Additional capital introduced during the year,	17,500
Stock,	59,500
Sundry debtors,	25,900
Business premises,	8,600
Machinery,	2,100
Sundry creditors,	33,400
Drawings made during the year,	26,400

	₹
Opening balance of bills receivable.	75,000
Bill dishonoured.	25,000
Bills collected (honoured)	1,30,000
Bills receivable endorsed to creditors.	15,000
Closing balance of bills receivable.	65,000

	₹
Bills payable dishonoured,	37,000
Closing balance of Bills payable,	85,000
Opening balance of Bills payable,	70,000
Bills payable accepted,	90,000
Cheque dishonoured,	23,000