What are incomplete records and how is it distinguished from the double-entry system?

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Solution

The difference between incomplete records and double-entry systems are as follows:

INCOMPLETE RECORDS

DOUBLE-ENTRY SYSTEM

Trading, profit and loss account, and

the balance sheet cannot be prepared.

Trading, profit and loss accounts, and balance sheets can be prepared.

This method is suitable for small-scale business units where the owners can directly control the affairs of the business.

This method is suitable for large-scale business units where the owners cannot directly control the affairs of the business.

Personal transactions of the owner get mixed up with business transactions

Personal transactions of the owner are kept separate from business transactions.

Both aspects of each transaction are not recorded.

Both aspects of each transaction are recorded.

Only personal accounts are kept and in some cases, a cash account is maintained.

Personal, real, and nominal accounts are kept fully.

Also see: Accounts From Incomplete Records

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Similar questions

The accountant of a small firm feels that incomplete records system should not be followed. In spite of that it is easy to maintain accounts on single entry basis. The accountant suggest that double entry accounting system should be followed. Is the suggestion correct? Give reasons.

In both, single entry system and a double entry system, accounting records are maintained due to a common objective. State the objective.

Q. Under double entry system both aspects of transaction are recorded, while Under single entry system, both aspects of transaction are not recorded.

Q. Profit can be ascertained from the incomplete records under single entry by using ________.

Q. Company accounting conforms more to dual aspect concept than to incomplete recording system because.
I. Companies Act insists upon the adoption of double entry systems of book keeping.
II. Balance sheet could not be prepared under sec.

211

of Company's Act according to the incomplete recording system
III. To show true and fair view of the affairs of the company
IV. To ensure adequate disclosure.
Select the correct answer from the codes given and mark your answer sheet accordingly.

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INCOMPLETE RECORDS	DOUBLE-ENTRY SYSTEM
Trading, profit and loss account, and the balance sheet cannot be prepared.	Trading, profit and loss accounts, and balance sheets can be prepared.
This method is suitable for small-scale business units where the owners can directly control the affairs of the business.	This method is suitable for large-scale business units where the owners cannot directly control the affairs of the business.
Personal transactions of the owner get mixed up with business transactions	Personal transactions of the owner are kept separate from business transactions.
Both aspects of each transaction are not recorded.	Both aspects of each transaction are recorded.
Only personal accounts are kept and in some cases, a cash account is maintained.	Personal, real, and nominal accounts are kept fully.