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Lesson Posted on 20 Mar CBSE/Class 11/Commerce/Accountancy

GOLDEN RULES OF ACCOUNTING

Dr. Sanjay Hiran

I want to give my students academic as well as professional knowledge about related subjects (Accounts,...

Golden Rules of debit and credit 1. Personal accounts : Debit the receiver & Credit the giver (supplier).2. Real accounts : Debit what comes in & Credit what goes out.3. Nominal accounts : Debit expenses and losses & Credit incomes and gains. read more

Golden Rules of debit and credit

1. Personal accounts : Debit the receiver & Credit the giver (supplier).
2. Real accounts : Debit what comes in & Credit what goes out.
3. Nominal accounts : Debit expenses and losses & Credit incomes and gains.

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Lesson Posted on 20 Mar CBSE/Class 11/Commerce/Accountancy

GOLDEN RULES OF ACCOUNTING

Dr. Sanjay Hiran

I want to give my students academic as well as professional knowledge about related subjects (Accounts,...

Rules of debit and credit 1. Personal accounts : Debit the receiver & Credit the giver (supplier)2. Real accounts : Debit what comes in & Credit what goes out3. Nominal accounts : Debit expenses and losses & Credit incomes and gains read more

Rules of debit and credit 
1. Personal accounts : Debit the receiver & Credit the giver (supplier)
2. Real accounts : Debit what comes in & Credit what goes out
3. Nominal accounts : Debit expenses and losses & Credit incomes and gains

read less
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Answered on 28 Feb CBSE/Class 11/Commerce/Accountancy

What is gift card redeemed? And what is entry posting. 

Anand

Tutor

Alternative to cash to buyback or purchase something in a particular store.Entry posting is the next step of journalizing in accounting.
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Answered on 18 Mar CBSE/Class 11/Commerce/Accountancy Tuition/Class XI-XII Tuition (PUC)

Abhinav Anand

Tutor

Profitability of a business entity can be estimated through trading p&l account. Where trading account states the gross profit and p&l account states the net profit earned by the entity.
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Answered on 17 Feb CBSE/Class 11/Commerce/Accountancy Tuition/Class XI-XII Tuition (PUC)

Gajender Vats

Tutor

In simple terms any thing bring by the owner of business to start the business activity or for investing
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Answered on 14 Feb CBSE/Class 11/Commerce/Accountancy Tuition/Class XI-XII Tuition (PUC)

What is meant by Pay-in-slip?

Priyanka Vijayananth

I am Searching for new authors ??

Pay-in-slip is a form available in banks and is used to deposit money into a bank account.
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Answered on 23 Feb CBSE/Class 11/Commerce/Accountancy Tuition/Class XI-XII Tuition (PUC)

Name the process of transferring entries from a journal to their respective accounts in the ledger.

Ramya

Primary Teacher

The Process of transfering journal entries to the ledger is called :- POSTING , once journal gets posted it can be viewed in the ledger, and after posting the entries only it will be hitting in the P & L and Balnce sheet schedules.
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Answered on 27 Feb CBSE/Class 11/Commerce/Accountancy Tuition/Class XI-XII Tuition (PUC)

According to which concept, each accounting transaction has at least two effects?

Amit Mukherjee

double entry system
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Answered on 06 Feb CBSE/Class 11/Commerce/Accountancy Tuition/Class XI-XII Tuition (PUC)

Under which basis of accounting only cash transactions are recorded in the books?

Ashok Mahajan

No.1 in Accounts coaching

Cash Basis method
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Answered on 05 Mar CBSE/Class 11/Commerce/Accountancy Tuition/Class XI-XII Tuition (PUC)

What is meant by Incomplete records?

Ramya

Primary Teacher

Accounting records not strictly based on principles of double entry system but based on incomplete records and mere memory is known as accounting from incomplete records. Single entry is a misnomer, as no such system exists for recording transaction in accounting. Actually, accounting from incomplete... read more

Accounting records not strictly based on principles of double entry system but based on incomplete records and mere memory is known as accounting from incomplete records. Single entry is a misnomer, as no such system exists for recording transaction in accounting. Actually, accounting from incomplete records is a mixed system of recording business transactions in which some transactions are recorded as per double entry system and for certain transactions only a single entry is made in the books of accounts.is worth mentioning that for certain transactions no recording is made in the books of accounts. Under this system, records related to cash account and personal accounts of debtors and creditors are maintained as per double entry system. Information relating to cash sales, cash purchases are recorded partially and information related to depreciation etc. are not recorded at all. In other words, we can say that accounting from incomplete records is just an attempt to record business transactions on the lines of double entry system.

 

Reasons of Incomplete Records:

The reasons for incomplete records in the business organizations are as under:

(i) Improper Knowledge:

The mechanism of keeping incomplete records is due to improper knowledge of accounting principles.

(ii) Inexpensive:

This method is less expensive as compared to keeping records as per double entry system. As people having specialized knowledge in accounting are not appointed and the staff engaged in other activities and sometimes the owner himself maintains the records.

(iii) Time Saving:

This method is time saving in the sense that only a few records are maintained under such system. The information related to profit can be immediately ascertained without going with the lengthy process of preparation of trial balance first.

(iv) Convenient and Need Based:

This method is very convenient in the sense that no rules and principles are to be followed. Business entities depending on the need, adapt different techniques for recording business transactions in the books of accounts.

Features of Incomplete Records:

The features of incomplete records are as under:

(i) Unsystematic Method

This is an unsystematic method for recording business transactions in the books of accounts. There are no rules and principles which are applicable for recording business transactions in the case of incomplete records.

(ii) Mixed System for Recording Business Transactions:

Accounting from incomplete records is a mixed system of recording business transactions in which some transactions are recorded as per double entry system and for certain transactions only a single entry is made in the books of accounts. In some cases no recording is made in the books of accounts.

(iii) Lack of Uniformity:

The system of recording business transactions under this mechanism differs from organization to organization as recording is made as per their need and convenience.

(iv) Personal Transactions are Mixed up with Business Transactions:

Personal transactions of the owners are usually mixed up with business transactions. Sometimes it is very difficult to segregate the business expenses and personal expenses of the owners. For example, maintenance expense of a car which is used by the owner for business and domestic purposes both.

 

 

(v) Based on Estimates:

The profit is based on estimation, hence cannot be relied upon. Similarly, the position of assets and liabilities does not show true and fair view of the business concern.

(vi) Highly Flexible:

This mechanism is not based on any set rules, principles and accounting standards, so it can be modified and changed as per the need and availability of time.

(vii) Suitable for very Small Business Entities:

Though the information provided by this system is inaccurate and not authentic yet this system is time and cost saving, hence adapted by those small business entities that are not bound to keep records of business transactions as per double entry system.

(viii) Mainly Personal Accounts are Maintained:

Under this system, mainly personal accounts are maintained and no record of real and personal accounts is maintained.

Advantages of Incomplete Records:

Following are some advantages of incomplete records:

(i) Simple and Time Saving:

This method is time saving in the sense that only a few records are maintained under such system.

(ii) Cost Effective:

This method is less expensive as compared to keeping records as per double entry system.

(iii) Convenient:

This method is very convenient in the sense that no rules and principles are to be followed.

(iv) Highly Flexible:

This mechanism is not based on any set rules, principles and accounting standards, as such it can be modified and changed as per the need and availability of time.

Limitations of Incomplete Records:

The limitations of incomplete records are as under:

(i) Arithmetical Accuracy cannot be Checked:

Under this method all ledger accounts related to real, personal and nominal are not maintained as such trial balance cannot be prepared. Hence, arithmetical accuracy cannot be checked.

(ii) Figures of Profits cannot be Relied Upon:

The profit is based on estimation, hence cannot be relied upon.

(iii) True and Fair View of the Business Concern not Shown:

The position of assets and liabilities does not show true and fair view of the business concern as very often recording is made on the basis of memory and sometimes on the basis of information available.

(iv) Improper Analysis of Profitability and Solvency:

In the absence of complete books of accounts, based on double entry system, proper analysis of profitability and solvency cannot be made. Hence, it may cause a great problem in raising loans from financial institutions.

(v) Errors and Frauds not Detectable:

Under this system it is very difficult to detect errors and frauds because various checks which are imposed by double entry system are not available.

(vi) Users’ Dissatisfaction:

Under this system, legal requirements cannot be complied with. Hence, taxation authorities and other governmental agencies do not satisfy with the incomplete information provided 

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