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
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
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.