Important Questions for CBSE Class 11 Accountancy Chapter 11 - Accounts From Incomplete Records

Very Short Answer Questions – 1 Marks

1. Define the term incomplete record.

Ans: Incomplete records refer to transactions that are not recorded using the double entry system. This is also called as single entry system where only cash account and the account of the creditor and debtor are maintained properly.

2. Why incomplete records are kept?

Ans: To keep proper track of the cash account, debtors account, and creditors account, incomplete accounts are kept.

3. Fill in the blanks

i. Incomplete entry system has ____ sided effect.

Ans: Incomplete entry system has one sided effect.

ii. A _____ cannot be prepared in single entry system.

Ans: A Trial balance cannot be prepared in single entry system. 

iii. ______ is the statement of assets and liability under single entry system.

Ans: Statement of affairs is the statement of assets and liability under single entry system. 

iv. Advance commission received is mentioned on_____side in statement of affairs. 

Ans: Advance commission received is mentioned on liability side in statement of affairs. 

4. True- false

i. Cash in hand can be obtained by preparing cash book.

Ans: The above sentence is True. Cash in hand can be achieved by preparing a cash book as cash books record all types of cash transactions.

ii. Trial balance can be prepared of incomplete record.

Ans: The above sentence is False. It is impossible to prepare a Trial Balance under this system since incomplete records are kept as it does not record the accounts of expenses, income, assets and liabilities.

iii. Bad-debts written off will affect the debtors.

Ans: The above sentence is True. The bad debts expenses offset and reduce the value of the debtors in the balance sheet.

iv. Statement of affairs is prepared under single entry system.

Ans: The above sentence is True. A statement of affairs is prepared to determine capital under a single entry system.

5. How loss during the period can be ascertained.

Ans:  The difference between opening and closing capital shows the loss incurred throughout the time period.

Short Answer Questions – 2 Marks

1. What do you understand by statement of affairs?

Ans:  The statement of affairs is a summary of a company's assets and liabilities. The statement of affairs determines the net book value and the amount expected to be realised at the time of the company's insolvency.

2. Explain how payment to creditors may be ascertained through incomplete record.

Ans:  Payments to creditors are frequently missing due to insufficient records. To figure it out, create a total creditors' account and subtract the whole purchase return from it.

3. Explain how collection from debtors may be ascertained through incomplete record.

Ans: Incomplete records make it difficult to recover from debts. To figure it out, create a total debtors' account and subtract the total sales return.

4. What are the similarity of balance sheet and statement of affairs?

Ans:  Both the balance sheet and the statement of affairs present the company's assets and liabilities at a specific date, and they aid in establishing the company's liquidity and stability.

5. How closing balance of cash can be ascertain from incomplete records.

Ans:  Incomplete records frequently overlook the cash closing balance. To assess it, a cash book summary is created, which contains all of the payments made and all of the receipts received throughout the year. The closing cash balance will be determined by the balancing figures.

Short Answer Questions – 3 Marks

1. Explain how credit sale and credit purchase may be ascertained through incomplete record.

Ans: In the incomplete records, Credit sales are determined by the preparing total debtor's accounts, from which the balancing figure will be the total credit sales. The total sales return is deducted from the total debtors account (If any).

Credit purchases are determined by the preparing total creditors accounts, from which the balancing figure will be the total credit purchase. The total sales return is deducted from the total Creditors account (If any).

2. Determine the format of credit account.

Ans:  The format of credit account is given below:

3. Why incomplete records are maintained?

Ans:  For the following reasons, businesses may keep incomplete records.

1. Due to a lack of accounting knowledge.

2. Keeping two accounts demands experience.

3. Keeping two sets of books is costly and time-consuming.

4. A single accounting system only necessitates the keeping of a few books.

5. It is more convenient to record the important transactions and ignore the rest.

4. What are the difficulties encountered by companies due to incomplete records?

Ans: Companies have issues as a result of inadequate record keeping.

1. Because a trial balance cannot be calculated, the accuracy of the accounts cannot be determined.

2.  Income tax authorities are difficult to persuade in terms of the accuracy of the record's computation

3.  Incomplete records make it impossible to determine a financial statement.

4. Insurance claims are not permitted to be filed with incomplete records.

5. How statement of affairs helps in ascertaining the profit or loss?

Ans: The capital will be provided by the statement of affairs at the beginning and conclusion of the accounting period. From which a profit and loss statement is derived determined to determine whether there was a profit or loss during the period of accounting The formula for calculating profit and the loss is calculated as follows:

Capital at the start – Capital at the end – Drawings over the year + During the Profit year, capital was introduced.

Long Answer Questions- 5 Marks

1. Explain how opening and closing capital may be ascertained through incomplete record.

Ans: By drafting the statement of affairs, you can determine the opening capital based on inadequate records. The start of the accounting period and the preparation of the financial statements asset and liability statements at the start of the year the period of accounting this statement will be similar to the one below.

It is possible to calculate the balance sheet and the opening capital due to the disparity between the two sides of the statement of facts while the closing balance is determined at the conclusion of the accounting period, the assets and liabilities statements are prepared at the end of the accounting period. 

The difference between the two sides of the statement of affairs can be used to calculate closing capital.

2. Differentiate between statement of affairs and balance sheet.

Ans:  The following is a list of the differences between a statement of affairs and a balance sheet:

3. Write down the Performa for ascertaining profit and loss of a company by statement of affairs.

Ans:  The following is the Performa for determining a company's profit and loss using a statement of affairs:

4. Calculate value of profit earned during the period if opening capital is ₹ 50,000, drawings is ₹ 5,000, additional capital introduced during the period is ₹ 20,000, closing capital ₹ 1,00,000.

Ans: Determine the profit value.

Thus profit during the year is ₹ 35,000. 

5. Calculate Capital at the beginning from the following information:

Ans: At the start, the capital formula is,

Capital at beginning = Ending Capital + Drawings during the year-

Additional Capital introduced during the year – Profit

= 5,00,000 + 70,000 - 2,00,000 - 80,000

= 2,90,000

As a result, the initial capital is Rs. 2,90,000.