Question

"Incomplete records system is unscientific,incomplete,inaccurate and unsystematic".
Explain

Answer 1

Reasons of Incomplete records:

Accounting records may be incomplete due to any one or more of the following reasons:

1.The businessman be ignorant of the seperate legal entity assumption.

2.The businessman may be ignorant of the double entry accounting principles.

3. The businessman may not intentionally maintain proper accounts to evade taxation.

4)Destruction of the books of accounts due to fire,floods etc.

Explanation of why Incomplete records system is unscientific,incomplete,inaccurate and unsystematic :

Single entry system depicts,

1) No checking of arithmetical accuracy

2)No true financial performance

3) No true Financial Position

4) No recognition under Tax Laws.