Question

How do you prepare financial statements from incomplete records?

Answer 1

The following steps need to be followed for preparing financial statements from incomplete records:

1. Prepare an opening statement of affairs for determining the opening capital
2. Detect the missing figures from the available data (preparing cash book, total debtors and creditors account, bills payable and bill receivable account).

3. The final step will be the preparation of trading and profit and loss account along with the balance sheet.

Also read:

• Marshalling of Assets and Liabilities
• Accounting MCQs
• What Is the Balance Sheet Equation
• Balance Sheet Vs Consolidated Balance Sheet
• Accounts From Incomplete Records

Learn about more questions and answers on business studies and various other commerce topics from our website.