Q.1 Which of the following is another name for Accounting from Incomplete Records?
Double Entry System
Single Entry System
Cash Accounting
Accrual Accounting
Explanation - Accounting from incomplete records is often termed as the Single Entry System because it does not follow the complete double entry mechanism.
Correct answer is: Single Entry System
Q.2 Incomplete records are mostly used by?
Large corporations
Government bodies
Small traders and businesses
Multinational companies
Explanation - Small traders who cannot maintain full accounting systems often use incomplete records for simplicity.
Correct answer is: Small traders and businesses
Q.3 Which important financial statement is difficult to prepare under incomplete records?
Trial Balance
Balance Sheet
Cash Book
Bank Reconciliation Statement
Explanation - Since full double entry is not maintained, preparing a complete Balance Sheet becomes difficult without reconstruction.
Correct answer is: Balance Sheet
Q.4 Under incomplete records, capital at the beginning is usually ascertained by preparing?
Cash Account
Statement of Affairs
Trading Account
Ledger
Explanation - Opening capital is found by comparing assets and liabilities through a Statement of Affairs.
Correct answer is: Statement of Affairs
Q.5 Which of the following is NOT a limitation of incomplete records?
Difficult to detect frauds
No arithmetical check
Requires less time and cost
True profit cannot be ascertained easily
Explanation - Requiring less time and cost is actually an advantage, not a limitation, of incomplete records.
Correct answer is: Requires less time and cost
Q.6 In single entry system, which account is maintained with more reliability?
Cash Account
Purchases Account
Sales Ledger
Debtors Account
Explanation - Cash book or Cash Account is usually maintained more systematically even in incomplete records.
Correct answer is: Cash Account
Q.7 Which method is used to ascertain profit in incomplete records?
Capital Comparison Method
Net Profit Ratio Method
Gross Profit Ratio Method
Operating Profit Method
Explanation - The capital comparison method is commonly used, comparing capital at the beginning and end with adjustments.
Correct answer is: Capital Comparison Method
Q.8 Statement of Affairs is similar to?
Profit and Loss Account
Cash Flow Statement
Balance Sheet
Ledger
Explanation - Statement of Affairs resembles a Balance Sheet but is prepared using available information rather than proper accounts.
Correct answer is: Balance Sheet
Q.9 Which entry is often missing in incomplete records?
Credit Purchases
Cash Purchases
Bank Deposits
Drawings
Explanation - Incomplete records often lack systematic credit transactions like credit purchases and sales.
Correct answer is: Credit Purchases
Q.10 To find closing capital under incomplete records, which of the following is necessary?
Closing Cash Balance
List of Assets and Liabilities
Opening Stock
Debtors only
Explanation - Closing capital is determined from the difference between total assets and total liabilities.
Correct answer is: List of Assets and Liabilities
Q.11 The difference between opening and closing capital is adjusted for?
Cash balance
Drawings and additional capital
Creditors
Purchases
Explanation - To calculate profit, the change in capital is adjusted for drawings and additional capital introduced.
Correct answer is: Drawings and additional capital
Q.12 Which of the following is NOT prepared under incomplete records?
Statement of Affairs
Total Debtors Account
Total Creditors Account
Trial Balance
Explanation - A Trial Balance cannot be prepared as double entry system is not fully maintained.
Correct answer is: Trial Balance
Q.13 Which account is prepared to find missing credit sales?
Debtors Account
Creditors Account
Cash Account
Bank Account
Explanation - By preparing a Total Debtors Account, credit sales can be derived as the balancing figure.
Correct answer is: Debtors Account
Q.14 Which account helps to ascertain credit purchases under incomplete records?
Debtors Account
Cash Account
Creditors Account
Capital Account
Explanation - Credit purchases are obtained as the balancing figure in the Total Creditors Account.
Correct answer is: Creditors Account
Q.15 Why is profit determination less reliable in incomplete records?
Because cash is not recorded
Because adjustments are estimates
Because creditors are ignored
Because no stock is taken
Explanation - Many figures are reconstructed or estimated, making profit less reliable.
Correct answer is: Because adjustments are estimates
Q.16 What is the biggest drawback of incomplete records?
Requires more staff
Cannot provide legal evidence
Too costly to maintain
Complicated method
Explanation - Since double entry is not maintained, records cannot be used as legal evidence.
Correct answer is: Cannot provide legal evidence
Q.17 Which principle of accounting is mostly ignored in incomplete records?
Dual Aspect Principle
Going Concern Principle
Accrual Principle
Consistency Principle
Explanation - Incomplete records do not follow the dual aspect principle, as every transaction is not recorded twice.
Correct answer is: Dual Aspect Principle
Q.18 The single entry system primarily records?
Both debit and credit equally
Only nominal accounts
Only personal and cash accounts
Only real accounts
Explanation - In single entry, usually personal accounts and cash accounts are maintained.
Correct answer is: Only personal and cash accounts
Q.19 When capital at the beginning is not available, it can be ascertained by?
Trial Balance
Statement of Affairs
Cash Flow
Bank Reconciliation
Explanation - The Statement of Affairs provides opening capital by comparing assets and liabilities.
Correct answer is: Statement of Affairs
Q.20 Which type of business usually avoids incomplete records?
Sole traders
Small shops
Large corporations
Partnership firms
Explanation - Large corporations are legally required to maintain complete double entry accounts.
Correct answer is: Large corporations
Q.21 Which of the following is NOT an advantage of incomplete records?
Saves time
Saves money
Easy to maintain
Helps in legal disputes
Explanation - Incomplete records are not reliable enough to be presented in legal disputes.
Correct answer is: Helps in legal disputes
Q.22 Single entry system is most appropriate when?
Transactions are very few
Transactions are very complex
Company is listed
Audits are mandatory
Explanation - Single entry or incomplete records are practical only when the number of transactions is small.
Correct answer is: Transactions are very few
Q.23 What is the main objective of maintaining incomplete records?
To calculate depreciation
To reduce accounting costs
To prepare legal accounts
To comply with law
Explanation - Small businesses adopt incomplete records mainly to save accounting costs.
Correct answer is: To reduce accounting costs
Q.24 Which one is NOT usually reconstructed in incomplete records?
Debtors Account
Creditors Account
Cash Account
Profit and Loss Account
Explanation - P&L is not reconstructed directly but is prepared after estimating missing figures.
Correct answer is: Profit and Loss Account
Q.25 Under single entry system, how is depreciation generally treated?
Charged systematically
Not provided
Added to profit
Transferred to capital
Explanation - Depreciation is usually ignored under incomplete records, reducing accuracy of profit.
Correct answer is: Not provided