Which preparing accounts from incomplete records, the amount of credit sales is determined by?

Preparing total creditors account.

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Preparing total debtors account.

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Ascertaining the balance in trading account other than closing stock.

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Ascertaining the balance in debtors account and cash book.

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Solution

The correct option is B Preparing total debtors account.
In case of incomplete records the dual concept of accounting is not followed. Therefore, in order to prepare the financial statements for a particular period all the incomplete records should be completed by preparing various accounts. Since the credit sales are recorded in the debtors account, preparation of debtors account is very essential to determine the amount of total credit sales.

Suggest Corrections

Similar questions

Explain how the following may be ascertained from incomplete records

(a) Opening capital and closing capital

(b) Credit sales and credit purchases

(d) Closing balance of cash

Explain how the following may be ascertained from incomplete records:

(a) Opening capital and closing capital

(b) Credit sales and credit purchases

(d) Closing balance of cash.

Q. Question : From the following information prepare the bills receivable account and total debtors account for the year ended December 31, 2005

	(Rs)
Opening balance of debtors	1,80,000

From the following trial balance, prepare trading account, profit and loss account for the year ended 31st December, 2016.

$\begin{matrix} Particulars & Amt. (Rs.) & Particulars & Amt. (Rs.) Opening Stock & 10, 000 & Sales & 5, 20, 000 Purchases & 3, 00, 000 & Purchases Returns & 10, 000 Debtors & 1, 40, 000 & Creditors & 1, 00, 000 Drawings & 20, 000 & Provision for Bad Debts & 4, 000 Sales Returns & 16, 000 & Bills Payable & 30, 000 Wages & 24, 000 & Bank Overdraft & 20, 000 Salaries & 40, 000 & Capital & 7, 20, 000 Repairs & 12, 000 Bad Debts & 8, 000 Carriage & 4, 000 Discount & 6, 000 Land and Building & 4, 00, 000 Plant and Machinery & 3, 00, 000 Furniture and Fixtures & 80, 000 Cash & 4, 000 Goodwill & 40, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 14, 04, 000 - --------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 14, 04, 000 - --------- - \end{matrix}$

Adjustments:

(i) Closing stock Rs. 40,000

(ii) Further bad debts Rs. 6,000.

(iii) Create a provision for doubtful debts @ 5%.

(iv) Create a provision for discount on debtors and creditors @ 2%.

(v) Change depreciation on plant and machinery and furniture and fixtures @ 10% per annum.

Q. From the following balances, prepare Trading and Profit and Loss Account and Balance Sheet:

Debit Balances:	₹	Debit Balances (Contd.):	₹
Machinery	3,50,000	Rent	45,000
Debtors	2,70,000	Sundry Expenses	20,000
Drawings	90,000	Carriage	15,000
Purchases	9,50,000	Credit Balances:
Wages	5,00,000	Capital	10,00,000
Bank	1,50,000	Creditors	1,40,000
Opening Stock	2,00,000	Sales	14,50,000

Closing Stock was valued at ₹ 30,000.

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