Question

Explain how the following may be ascertained from incomplete records:
(a) Opening capital and closing capital
(b) Credit sales and credit purchases
(c) Payments to creditors and collection from debtors
(d) Closing balance of cash.

Answer 1

The answer is stated below:

Explanation:

a.

Closing and the Opening Capital - Opening or the beginning capital could be ascertained through preparing or making the beginning statement of affairs at the beginning of the accounting year. Whereas the closing capital could be ascertained through preparing or making the closing statement of affairs at the end of the accounting year or the period.

b.

Credit Purchase and Credit Sales - The credit purchases could be ascertained from the balancing figure of the aggregate creditors account. Whereas the credit sales are attained from balancing figure of the aggregate debtors account.

c.

Creditors payment and  collection from debtors - It could be ascertain from preparing or making the  total account of debtors and total account of creditors respectively.

d.

Closing balance of the cash - This could be attain from preparing or making the cash account.

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d. Closing balance of cash may be ascertained by preparing cash account.