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Chapter: 12th Accountancy : Accounts from Incomplete Records

Accounts from Incomplete Records | Accountancy | Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail |

Features of incomplete records

Following are the features of incomplete records:

Features of incomplete records

Following are the features of incomplete records:

Nature: It is an unscientific and unsystematic way of recording transactions. Accounting principles and accounting standards are not followed properly.

Type of accounts maintained: In general, only cash and personal accounts are maintained fully. Real accounts and nominal accounts are not maintained properly. Some transactions are completely omitted.

Lack of uniformity: There is no uniformity in recording the transactions among different organisations. Different organisations record their transactions according to their needs and conveniences.

Financial statements may not represent true and fair view: Due to the incomplete information and inaccurate records of accounts, the profit or loss calculated from these records cannot be relied upon. It may not represent true profitability. Assets and liabilities may not represent a true and fair view of financial position.

Suitability: Only the business concerns which have no legal obligation to maintain books of accounts under double entry system may maintain incomplete records. Hence, it may be maintained by small sized sole traders and partnership firms.

Mixing up of personal and business transactions: Generally, personal transactions of the owners are mixed up with the business transactions. For example, purchase of goods for own use may be mixed up along with business purchases.

 

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