3.14 Accounting for organisations with incomplete records


Additional information

The calculation of profit of an organisation where there are insufficient records to prepare income statements.

Calculations could include the use of statements of affairs.

How accounting techniques are applied in the preparation and analysis of financial statements for a business with incomplete records.

Techniques to find missing information are:

  • control/total accounts
  • cash accounts
  • bank accounts
  • ratios (mark up, gross profit margin, inventory turnover, profit in relation to revenue)
  • depreciation of non-current assets
  • calculation of profit or loss on disposal of non-current assets
  • the use of financial statements to find missing figures.

The benefits and limitations of maintaining accounting records using different systems including single and double entry records.