Financial Statements from
Incomplete Records
Not every business keeps perfect double-entry books. When records are incomplete, we use two methods to find profit — the Statement of Affairs Method (Capital Comparison) and the Conversion Method (preparing full Trading and P&L Account). Master both methods with fully worked numericals, and understand the key distinctions asked repeatedly in CBSE boards.
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📌 The Core Idea
When Records Are Incomplete — We Estimate Profit from What We Have
Small businesses — kirana shops, local traders, individual professionals — often don't maintain complete double-entry records. They may only have a Cash Book, some receipts, and a few notes. Incomplete Records (Single Entry System) means using whatever partial information is available to reconstruct financial statements. Two methods exist: compare opening and closing capital (Statement of Affairs), or convert partial records into full accounts (Conversion Method).
1. Meaning of Single Entry System
The Single Entry System is a method of recording business transactions where only one aspect (either Dr. or Cr.) of a transaction is recorded, or where some transactions are recorded fully and others partially or not at all. It is NOT a complete system — it is a mixture of incomplete records. Also called Accounts from Incomplete Records.
Important distinction: Single Entry is NOT the opposite of Double Entry. It is simply the absence of a complete, systematic double-entry system. A business using Single Entry may still maintain a Cash Book and some personal accounts — just not all accounts for every transaction.
2. Features of Single Entry System
1
Only Personal Accounts Complete
Debtors and Creditors accounts are usually maintained. Real accounts (assets) and Nominal accounts (income/expense) are mostly absent or incomplete.
2
Cash Book Usually Maintained
Most businesses record cash receipts and payments. But the posting to Ledger accounts may be missing or partial.
3
No Trial Balance Possible
Without complete double-entry, a Trial Balance cannot be prepared. Hence errors cannot be detected through TB agreement.
4
Subjective & Estimates
Many figures need to be estimated or reconstructed. Different accountants may arrive at different profit figures from the same records.
5
Mostly Used by Small Businesses
Small sole proprietors, shopkeepers, and professionals use this for simplicity and cost-saving. Not permitted for companies.
6
Not Legally Accepted
Companies and certain partnerships are legally required to maintain proper double-entry books. Courts and tax authorities do not fully accept single-entry accounts.
3. Advantages of Single Entry System
1
Simple to Maintain
No specialised accounting knowledge required. A shopkeeper can maintain a Cash Book and creditor/debtor records without an accountant.
2
Less Time and Cost
Fewer records to maintain. Saves time and the cost of hiring a trained bookkeeper. Suitable where transaction volume is low.
3
Flexibility
Records can be maintained in whatever format suits the business. No rigid format requirements unlike double-entry where rules must be strictly followed.
4. Limitations of Single Entry System
1
Incomplete and Unreliable
Profit figure is only an estimate. Different methods of reconstruction give different results. The true profit cannot be determined with certainty.
2
Errors Cannot Be Detected
No Trial Balance means arithmetic errors, omissions, and frauds cannot be systematically detected. Manipulation of records is easy.
3
Not Accepted by Tax Authorities
Income Tax Department may not accept single-entry accounts for tax assessment. Businesses may face higher tax assessments.
4
No Comparison Possible
Without proper ledger accounts, comparing performance across years is difficult. No financial analysis possible.
5. Single Entry vs Double Entry System
| Basis | Single Entry System | Double Entry System |
|---|---|---|
| Meaning | Only one aspect of transaction recorded (partial or no records) | Both Dr. and Cr. aspects of every transaction recorded completely |
| Records maintained | Cash Book + Personal accounts (partially) | All books — Journal, Ledger, subsidiary books |
| Trial Balance | Cannot be prepared | Can be prepared (checks arithmetic accuracy) |
| Profit determination | Estimated/approximate only | Exact and verifiable |
| Error detection | Not possible | Possible through Trial Balance |
| Legal acceptance | Not accepted by courts and tax authorities | Fully accepted |
| Suitable for | Very small businesses and sole proprietors | All types and sizes of businesses |
| Cost | Low — no trained bookkeeper needed | Higher — requires trained accountant |
6. Balance Sheet vs Statement of Affairs
| Basis | Balance Sheet | Statement of Affairs |
|---|---|---|
| Based on | Complete double-entry records | Estimated / incomplete records |
| Capital figure | Exactly computed from books | Derived as plug (Assets − Liabilities) |
| Reliability | Completely reliable — verifiable | Approximate — depends on estimates |
| Preparation | From Trial Balance | From estimated asset and liability values |
| Heading | "Balance Sheet as at..." | "Statement of Affairs as at..." |
| Legal status | Legally accepted document | Not legally accepted in courts |
7. Method 1 — Statement of Affairs Method (Capital Comparison Method)
This method calculates profit by comparing opening capital with closing capital. The increase in capital (after adjusting for drawings and fresh capital introduced) is the profit for the year.
Key Formula:
Capital = Total Assets − Total Liabilities (from Statement of Affairs)
Profit = Closing Capital − Opening Capital + Drawings − Fresh Capital Introduced
If result is positive → Profit. If negative → Loss.
Why add back Drawings? Drawings reduce capital but are NOT a loss — so add them back.
Why deduct Fresh Capital? New money brought in increases capital but is NOT profit — so deduct it.
Capital = Total Assets − Total Liabilities (from Statement of Affairs)
Profit = Closing Capital − Opening Capital + Drawings − Fresh Capital Introduced
If result is positive → Profit. If negative → Loss.
Why add back Drawings? Drawings reduce capital but are NOT a loss — so add them back.
Why deduct Fresh Capital? New money brought in increases capital but is NOT profit — so deduct it.
📈 Numerical 1 — Statement of Affairs Method
Question: Ravi does not maintain proper books. From the following information, find his profit/loss for the year 2025-26.
Assets and Liabilities on 1 April 2025 (Opening):
Cash ₹5,000 | Stock ₹30,000 | Debtors ₹25,000 | Furniture ₹15,000 | Creditors ₹18,000 | Bank Loan ₹10,000
Assets and Liabilities on 31 March 2026 (Closing):
Cash ₹8,000 | Stock ₹45,000 | Debtors ₹32,000 | Furniture ₹12,000 | Creditors ₹22,000 | Bank Loan ₹8,000
During the year: Drawings ₹24,000 | Fresh Capital introduced ₹10,000
Assets and Liabilities on 1 April 2025 (Opening):
Cash ₹5,000 | Stock ₹30,000 | Debtors ₹25,000 | Furniture ₹15,000 | Creditors ₹18,000 | Bank Loan ₹10,000
Assets and Liabilities on 31 March 2026 (Closing):
Cash ₹8,000 | Stock ₹45,000 | Debtors ₹32,000 | Furniture ₹12,000 | Creditors ₹22,000 | Bank Loan ₹8,000
During the year: Drawings ₹24,000 | Fresh Capital introduced ₹10,000
Step 1: Opening Statement of Affairs (1 April 2025)
| Statement of Affairs as at 1 April 2025 | |||
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Creditors | 18,000 | Cash | 5,000 |
| Bank Loan | 10,000 | Debtors | 25,000 |
| Opening Capital (balancing figure) | 47,000 | Stock | 30,000 |
| Furniture | 15,000 | ||
| Total | 75,000 | Total | 75,000 |
Opening Capital = Total Assets − Total Liabilities = (₹5,000 + ₹25,000 + ₹30,000 + ₹15,000) − (₹18,000 + ₹10,000) = ₹75,000 − ₹28,000 = ₹47,000
Step 2: Closing Statement of Affairs (31 March 2026)
| Statement of Affairs as at 31 March 2026 | |||
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Creditors | 22,000 | Cash | 8,000 |
| Bank Loan | 8,000 | Debtors | 32,000 |
| Closing Capital (balancing figure) | 67,000 | Stock | 45,000 |
| Furniture | 12,000 | ||
| Total | 97,000 | Total | 97,000 |
Closing Capital = (₹8,000 + ₹32,000 + ₹45,000 + ₹12,000) − (₹22,000 + ₹8,000) = ₹97,000 − ₹30,000 = ₹67,000
Step 3: Calculate Profit
| Statement of Profit and Loss for the Year 2025–26 | |
| Particulars | ₹ |
|---|---|
| Closing Capital (31 March 2026) | 67,000 |
| Add: Drawings during the year | 24,000 |
| Adjusted Closing Capital | 91,000 |
| Less: Opening Capital (1 April 2025) | (47,000) |
| Less: Fresh Capital introduced during year | (10,000) |
| Net Profit for the Year | 34,000 |
Profit = ₹67,000 + ₹24,000 − ₹47,000 − ₹10,000 = ₹34,000 ✓
Ravi earned a net profit of ₹34,000 during 2025-26.
Ravi earned a net profit of ₹34,000 during 2025-26.
8. Method 2 — Conversion Method
Under the Conversion Method, the incomplete records are converted into complete double-entry records by preparing various memorandum accounts. The key tools are:
1
Total Debtors Account
Used to find either Credit Sales or Cash received from Debtors — whichever is missing. Dr. side: Opening Debtors + Credit Sales. Cr. side: Cash received + Returns + Bad Debts + Closing Debtors.
2
Total Creditors Account
Used to find either Credit Purchases or Cash paid to Creditors — whichever is missing. Dr. side: Cash paid + Returns + Closing Creditors. Cr. side: Opening Creditors + Credit Purchases.
3
Cash / Bank Account
Reconstructed from all available cash receipts and payments. Used to find missing figures like cash sales, cash purchases, or expenses paid.
4
Bills Receivable / Bills Payable A/c
To find discounted bills, bills collected, or bills outstanding if bills are involved in transactions.
Total Debtors Account Format:
Dr. side: Opening Debtors (b/d) | Credit Sales (missing figure)
Cr. side: Cash received from Debtors | Sales Returns | Bad Debts | Closing Debtors (c/d)
Total Creditors Account Format:
Dr. side: Cash paid to Creditors | Purchase Returns | Closing Creditors (c/d)
Cr. side: Opening Creditors (b/d) | Credit Purchases (missing figure)
Dr. side: Opening Debtors (b/d) | Credit Sales (missing figure)
Cr. side: Cash received from Debtors | Sales Returns | Bad Debts | Closing Debtors (c/d)
Total Creditors Account Format:
Dr. side: Cash paid to Creditors | Purchase Returns | Closing Creditors (c/d)
Cr. side: Opening Creditors (b/d) | Credit Purchases (missing figure)
📈 Numerical 2 — Conversion Method (Finding Credit Sales and Purchases)
Question: Meena does not maintain proper books. From incomplete records, find her Total Sales, Total Purchases, and prepare financial statements for the year ended 31 March 2026.
Given: Opening Debtors ₹20,000 | Closing Debtors ₹28,000 | Cash received from debtors ₹1,60,000 | Sales Returns ₹4,000 | Bad Debts ₹1,000
Opening Creditors ₹15,000 | Closing Creditors ₹18,000 | Cash paid to creditors ₹85,000 | Purchase Returns ₹2,000
Cash Sales ₹40,000 | Cash Purchases ₹20,000 | Opening Stock ₹12,000 | Closing Stock ₹15,000
Wages ₹8,000 | Salaries ₹18,000 | Rent ₹6,000 | Depreciation ₹4,000 | Discount Received ₹1,500
Given: Opening Debtors ₹20,000 | Closing Debtors ₹28,000 | Cash received from debtors ₹1,60,000 | Sales Returns ₹4,000 | Bad Debts ₹1,000
Opening Creditors ₹15,000 | Closing Creditors ₹18,000 | Cash paid to creditors ₹85,000 | Purchase Returns ₹2,000
Cash Sales ₹40,000 | Cash Purchases ₹20,000 | Opening Stock ₹12,000 | Closing Stock ₹15,000
Wages ₹8,000 | Salaries ₹18,000 | Rent ₹6,000 | Depreciation ₹4,000 | Discount Received ₹1,500
Step 1: Total Debtors Account (to find Credit Sales)
| Dr. Total Debtors Account Cr. | |||
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Balance b/d (Opening) | 20,000 | By Cash received from debtors | 1,60,000 |
| To Credit Sales (balancing figure) | 1,73,000 | By Sales Returns | 4,000 |
| By Bad Debts | 1,000 | ||
| By Balance c/d (Closing) | 28,000 | ||
| Total | 1,93,000 | Total | 1,93,000 |
Credit Sales = ₹1,73,000 | Total Sales = Cash Sales ₹40,000 + Credit Sales ₹1,73,000 = ₹2,13,000 (before returns)
Net Sales = ₹2,13,000 − ₹4,000 (returns) = ₹2,09,000
Net Sales = ₹2,13,000 − ₹4,000 (returns) = ₹2,09,000
Step 2: Total Creditors Account (to find Credit Purchases)
| Dr. Total Creditors Account Cr. | |||
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| By Cash paid to creditors | 85,000 | To Balance b/d (Opening) | 15,000 |
| By Purchase Returns | 2,000 | ||
| By Balance c/d (Closing) | 18,000 | ||
| By Credit Purchases (balancing) | 90,000 | ||
| Total | 1,05,000 | Total | 1,05,000 |
Credit Purchases = ₹90,000 | Total Purchases = Cash Purchases ₹20,000 + Credit Purchases ₹90,000 = ₹1,10,000
Net Purchases = ₹1,10,000 − ₹2,000 (returns) = ₹1,08,000
Net Purchases = ₹1,10,000 − ₹2,000 (returns) = ₹1,08,000
Step 3: Trading and P&L Account
| Dr. Trading and P&L Account for Year Ended 31 March 2026 Cr. | |||
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Opening Stock | 12,000 | By Net Sales (2,13,000−4,000) | 2,09,000 |
| To Net Purchases (1,10,000−2,000) | 1,08,000 | By Closing Stock | 15,000 |
| To Wages | 8,000 | ||
| To Gross Profit c/d | 96,000 | ||
| Total | 2,24,000 | Total | 2,24,000 |
| To Salaries | 18,000 | By Gross Profit b/d | 96,000 |
| To Rent | 6,000 | By Discount Received | 1,500 |
| To Bad Debts | 1,000 | ||
| To Depreciation | 4,000 | ||
| To Net Profit c/d | 68,500 | ||
| Total | 97,500 | Total | 97,500 |
Gross Profit = ₹96,000 | Net Profit = ₹68,500 ✓
⚡ Quick Recall — Chapter 19 Key Points
Single Entry = incomplete records. Only personal accounts (debtors/creditors) maintained fully. Real and nominal accounts missing or partial.
Difference: Balance Sheet prepared from complete records. Statement of Affairs prepared from incomplete/estimated records. Capital in SoA = Assets − Liabilities (balancing figure).
Method 1 (Statement of Affairs): Profit = Closing Capital + Drawings − Opening Capital − Fresh Capital Introduced.
Drawings are ADDED back (reduce capital but are not a loss). Fresh Capital is DEDUCTED (increases capital but is not profit).
Method 2 (Conversion): Convert incomplete records to complete T&P&L using Total Debtors A/c (find Credit Sales) and Total Creditors A/c (find Credit Purchases).
Total Debtors A/c: Dr. = Opening Debtors + Credit Sales. Cr. = Cash received + Returns + Bad Debts + Closing Debtors.
Total Creditors A/c: Dr. = Cash paid + Returns + Closing Creditors. Cr. = Opening Creditors + Credit Purchases.
Total Sales = Cash Sales + Credit Sales (from Debtors A/c). Total Purchases = Cash Purchases + Credit Purchases (from Creditors A/c).
Single Entry NOT accepted by tax authorities, courts, or for company accounts. Companies Act requires double-entry system mandatorily.
Conversion Method is more accurate than Statement of Affairs Method because it gives a full Trading and P&L Account showing Gross Profit separately.
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20 MCQs — Financial Statements from Incomplete Records
Mixed difficulty — Single Entry features, distinctions, both methods, and CUET-level numericals in Q17–Q20.
📚 Questions 1 to 20
1
Single Entry System is also known as:
ADouble Account System
BAccounts from Incomplete Records
CCash Basis Accounting
DFund Flow System
Answer: B — Accounts from Incomplete Records. The Single Entry System is commonly called Accounts from Incomplete Records because it does not maintain complete double-entry records. It is a mixed system — some transactions recorded fully, some partially, some not at all.
2
Under Single Entry System, which accounts are usually maintained COMPLETELY?
AAll nominal accounts (income and expenses)
BAll real accounts (assets)
CPersonal accounts (Debtors and Creditors)
DAll accounts equally
Answer: C — Personal accounts (Debtors and Creditors). In Single Entry, businesses maintain debtors and creditors accounts to track who owes them money and whom they owe. Real accounts (assets) and Nominal accounts (income/expenses) are usually absent or incomplete.
3
A Trial Balance CANNOT be prepared under Single Entry System because:
AThe business is too small
BThere are no debtors
CBoth aspects of transactions are not recorded — so Dr. and Cr. totals will not agree
DThere are too many transactions
Answer: C. Trial Balance requires that all transactions are recorded with both Dr. and Cr. aspects. Since Single Entry records only one or partial aspects of transactions, there is no way to balance Dr. and Cr. totals. Hence TB cannot be prepared and errors cannot be detected.
4
Capital in a Statement of Affairs is calculated as:
ATotal Assets + Total Liabilities
BTotal Liabilities − Total Assets
CTotal Assets − Total Liabilities (balancing figure)
DOpening Stock + Purchases
Answer: C — Total Assets − Total Liabilities. In a Statement of Affairs (incomplete records), Capital is NOT directly known — it is derived as the balancing figure = Total Assets − Total Liabilities. This is why it is called "Statement of Affairs" not "Balance Sheet" — capital is estimated, not exact.
5
The formula for calculating Profit under Statement of Affairs Method is:
AOpening Capital − Closing Capital
BClosing Capital + Fresh Capital − Drawings − Opening Capital
CClosing Capital + Drawings − Opening Capital − Fresh Capital Introduced
DTotal Assets − Total Liabilities
Answer: C — Closing Capital + Drawings − Opening Capital − Fresh Capital. Profit = Closing Capital + Drawings − Opening Capital − Fresh Capital Introduced. Drawings added back (not a loss). Fresh Capital deducted (not profit). If result is positive = Profit. If negative = Loss.
6
Why are Drawings ADDED while calculating profit in Statement of Affairs Method?
ABecause drawings increase profit
BBecause drawings are an income of the business
CBecause drawings reduce capital but are NOT a business loss — must be added back to find true profit
DBecause drawings are shown on the assets side
Answer: C. Drawings reduce capital (owner takes money out) but this reduction is NOT because the business made a loss — it is a personal withdrawal. To find true profit (before drawings), we must add back what was withdrawn. If drawings were not added, profit would be understated.
7
Fresh Capital introduced during the year is DEDUCTED while calculating profit because:
AIt is a liability of the business
BIt increases capital but is NOT profit — must be deducted to avoid overstating profit
CIt reduces the closing capital
DIt is an expense of the business
Answer: B. Fresh Capital (additional money invested by owner) increases closing capital. But this increase is NOT because of profit from business operations — it is a new investment. To find true business profit, we must remove this external injection of funds.
8
The Total Debtors Account is used in Conversion Method to find:
ACredit Purchases
BCash paid to creditors
CCredit Sales (or Cash received from debtors — whichever is missing)
DOpening Stock
Answer: C — Credit Sales. Total Debtors Account is a memorandum account. Dr. side = Opening Debtors + Credit Sales. Cr. side = Cash received + Returns + Bad Debts + Closing Debtors. If Credit Sales is unknown, it becomes the balancing figure. Can also be used to find cash received if sales is known.
9
In Total Creditors Account, Credit Purchases appears on the:
ADebit side
BCredit side (as the balancing figure)
CBoth sides
DNeither — it is found separately
Answer: B — Credit side. In Total Creditors A/c: Cr. side = Opening Creditors + Credit Purchases. Dr. side = Cash paid to creditors + Purchase Returns + Closing Creditors. Credit Purchases is a credit entry (creates a creditor) so it appears on the Cr. side of the Creditors Account.
10
Which method gives a more complete picture of profit — Gross Profit AND Net Profit separately?
AStatement of Affairs Method
BConversion Method
CBoth give same information
DNeither method gives Gross Profit
Answer: B — Conversion Method. Conversion Method prepares a full Trading and P&L Account showing Gross Profit (from Trading) and Net Profit (from P&L) separately. Statement of Affairs Method only gives overall Net Profit (as the increase in capital) — no breakdown of Gross vs Net profit.
11
Single Entry System is NOT permitted for:
ASmall sole proprietorships
BIndividual professionals like doctors
CCompanies (registered under Companies Act)
DPartnership firms
Answer: C — Companies. The Companies Act mandates that all companies maintain proper books of accounts using the double-entry system. Single Entry is not legally acceptable for companies. Sole proprietors and professionals (like doctors, lawyers) may use single entry though it is not recommended.
12
Opening Stock + Credit Purchases − (Cash paid to Creditors + Purchase Returns + Closing Creditors) = ?
ACredit Sales
BOpening Creditors
CThis is a rearrangement to verify the Total Creditors Account balance
DClosing Stock
Answer: C. Total Creditors Account: Cr. total = Opening Creditors + Credit Purchases. Dr. total = Cash paid + Returns + Closing Creditors. When Dr. total = Cr. total, the account balances — confirming Credit Purchases as the missing figure. The question describes the verification process.
13
In Statement of Affairs Method, if Closing Capital < Opening Capital (after adjusting drawings and fresh capital), it means:
ANet Profit has been earned
BDrawings exceeded profits
CNet Loss has been incurred during the year
DFresh capital was introduced
Answer: C — Net Loss. Profit formula: Closing Capital + Drawings − Opening Capital − Fresh Capital. If this result is negative = Net Loss. The business lost value during the year (even after adding back drawings and removing fresh capital injection).
14
Which of these is an ADVANTAGE of Single Entry System?
AErrors can be easily detected
BAccepted by all tax authorities
CSimple to maintain, less time and cost
DGives exact profit figures
Answer: C — Simple, less time and cost. The main advantage of Single Entry is simplicity — no specialised accounting knowledge needed, less time to maintain, and lower cost. The other options are advantages of Double Entry, not Single Entry.
15
Bad Debts written off appear in Total Debtors Account on the:
ADebit side
BCredit side
CBoth sides
DNot in Debtors Account
Answer: B — Credit side. In Total Debtors Account, the Cr. side shows all REDUCTIONS in debtors: Cash received from debtors + Sales Returns + Bad Debts written off + Closing Debtors (c/d). Bad debts reduce the amount receivable, so they appear on the Cr. side (debtors account credit = reducing what debtors owe).
16
The key difference between Balance Sheet and Statement of Affairs is:
ABalance Sheet has more items
BStatement of Affairs has two columns
CBalance Sheet is prepared from complete records; Statement of Affairs from incomplete/estimated data — Capital is a balancing figure
DBalance Sheet does not show capital
Answer: C. Balance Sheet = prepared from complete double-entry records; Capital is exactly computed. Statement of Affairs = prepared from incomplete/estimated records; Capital is the balancing figure (Assets − Liabilities). Both look similar but differ in reliability and legal status.
17
CUET: Opening Capital ₹60,000 | Closing Capital ₹80,000 | Drawings ₹15,000 | Fresh Capital ₹5,000. Net Profit:
A₹20,000
B₹30,000
C₹25,000
D₹35,000
Answer: B — ₹30,000. Profit = Closing Capital + Drawings − Opening Capital − Fresh Capital = ₹80,000 + ₹15,000 − ₹60,000 − ₹5,000 = ₹30,000. Check: ₹80,000 + ₹15,000 = ₹95,000 − ₹60,000 − ₹5,000 = ₹30,000 ✓
18
CUET: Opening Debtors ₹15,000 | Cash received from debtors ₹1,20,000 | Sales Returns ₹3,000 | Bad Debts ₹2,000 | Closing Debtors ₹22,000. Credit Sales:
A₹1,32,000
B₹1,32,000
C₹1,27,000
D₹1,47,000
Answer: B — ₹1,32,000. Total Debtors A/c: Cr. total = ₹1,20,000 + ₹3,000 + ₹2,000 + ₹22,000 = ₹1,47,000. Dr. total must equal Cr. total = ₹1,47,000. Credit Sales = ₹1,47,000 − Opening Debtors ₹15,000 = ₹1,32,000.
19
CUET: Opening Creditors ₹20,000 | Cash paid to creditors ₹75,000 | Purchase Returns ₹3,000 | Closing Creditors ₹25,000. Credit Purchases:
A₹78,000
B₹83,000
C₹73,000
D₹80,000
Answer: B — ₹83,000. Total Creditors A/c: Dr. total = ₹75,000 + ₹3,000 + ₹25,000 = ₹1,03,000. Cr. total must equal ₹1,03,000. Credit Purchases = ₹1,03,000 − Opening Creditors ₹20,000 = ₹83,000.
20
CUET Assertion (A): Statement of Affairs is exactly the same as a Balance Sheet. Reason (R): In both statements, capital is derived from complete and verified books of account.
ABoth A and R are true, R correctly explains A
BA is true, R is false
CBoth A and R are false
DA is false, R is true
Answer: C — Both A and R are false. A is FALSE: Statement of Affairs is NOT the same as Balance Sheet — it is based on estimated/incomplete records, capital is a balancing figure, and it lacks legal status. R is also FALSE: in Statement of Affairs, capital is a balancing figure from estimated data, NOT from verified complete books.
Chapter 19 — Live Quiz
20 questions · Incomplete Records · One at a time · Instant feedback
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