TOPIC 1

SINGLE ENTRY AND

INCOMPLETE RECORD
Learning outcomes:
⚫ Students should be able to:

⚫ 1.Define and explain single entry and complete record

⚫ 2.Prepare proft and loss statement using comparison method
and analysis method
Introduction
⚫ Incomplete records means:
⚫ A. Businesses do not keep proper accounting record due to:
⚫ i. Lack of knowledge and experience
⚫ Ii.Too expensive for small bussineses to hire accounting staff or to buy accounting software

⚫ Small businesses usually:

⚫ i. Keep cash book
⚫ Ii. Keep cheque butts
⚫ Iii. Treat personal affairs as business affairs and vice versa

⚫ Business keep proper records but they are destroyed due to fire, lost and misplaced.
 Business must prepare

⚫ Income statement/profit or loss, SOCI

Balance Sheet, statement of business affair, SOFP

⚫ Profit/Loss can be estimated using:

⚫ A. Comparison method
⚫ B. Analysis method
 Comparison method
⚫ Steps:

⚫ i. Prepare Balance Sheet/ statement of business affair, SOFP for 2

accounting periods

⚫ ii. Compare the two statements

⚫ iii. The difference is estimated income or loss

 Comparison method
⚫ Example 1
Assets and liabilities belong to Ijae Kedai Runcit
  31/12/18 31/12/19
Fixtures and fittings 6500 5900
Vehicles 25000 32000
Account receivables 8400 10500
Accounts payable 5600 6800
Inventory 4900 3600
Bank 3800 10800
Miscellaneous accrued expenses 900 600
 Comparison method

Ijae Kedai Runcit Ijae Kedai Runcit

Statement of affairs as at 1/1/19 Statement of affairs as at 31/12/19
Non current assets:   Non current assets:  
Fixtures and fittings 6500 Fixtures and fittings 5900
Vehicles 25000 Vehicles 32000
  31500   37900
Current assets   Current assets  
Inventory 4900 Inventory 3600
Account receivables 8400 Account receivables 10500
Bank 3800 Bank 10800
  17100   24900
Total aset 48600 Total aset 62800
       
Owners' equity 42100
Owners' equity 55400
Current liabilities  
Current liabilities  
Account Payables 5600
Account Payables 6800
Misc accrued exp 900
Misc accrued exp 600
Total current liabilities 6500
Total current liabilities 7400
  48600
  62800
 Comparison method

Ijae Kedai Runcit

Statement of profit or loss for the year ended
31/12/19
Ending owners' equity 55400
Ending owners' equity 42100
Net profit for the year 13300
 Comparison method
⚫ Example 2
Assets and liabilities belong to Ijae Kedai Runcit
  31/12/18 31/12/19
Fixtures and fittings 6500 5900
Vehicles 25000 32000
Account receivables 8400 10500
Accounts payable 5600 6800
Inventory 4900 3600
Bank 3800 10800
Miscellaneous accrued expenses 900 600

⚫ Additional info:Ijae the owner introduced additional capital RM 6000, took

cash for personal spending RM1000 during 2019.
⚫ Instruction: calculate profit for the year
 Ijae Kedai Runcit
Statement of profit or loss for the year ended 31/12/19
Ending owners' equity 55400
Add: Drawing 1000
Less: Additional capital 6000
Adjusted owner's equity 50400
Less: Ending owners' equity 42100
Net profit for the year 8300

⚫ Profit = ending equity + Drawing - additional capital –

opening equity
Owners equity
opening Capital 42100
add additional capital 6000
add Net profit 8300
56400
Less Drawing 1000
Ending capital 55400
 ⚫ Analysis method

⚫ Find missing information by re-constructuring ledger

⚫ Example 3: Find credit sales

Trade receivable as at 31/12/2019 10,000

Trade receivable as at 31/12/2018 13,000
Sales return 700
Receipts from trade receivables 18600
Discount allowed 320 Trade Receivable Control A/c
Bad debts written off 460
    Balance b/d 13,000 Receipts 18,600
Credit sales 17,080 Discount allowed 320
  Bad debts 460
  Sales return 700
  Balance c/d 10000
30080 30,080
⚫ Example 4:Find credit purchases

Trade payable as at 31/12/2019 12,700

Trade payable as at 31/12/2018 4,800
Purchases return 360
Payments to trade payables 11900
Discount received 300
Trade Payable Control A/c
Purchases return 360 Balance b/d 4,800
Payments 11,900 Credit purchases 20,460
Discount received 300  
Balance c/d 12700  
25,260 25,260
⚫ Example 5 : Find expense to be charged in income
statement
Salaries accrued as at 31/12/2018 2,500
Salaries accrued as at 31/12/2019 870
Salaries prepaid as at 31/12/2019 300
salaries paid during the year 35000

Salaries A/c
Cash 35,000 Balance b/d 2,500
   
  Income statement 33,070
Balance c/d 870  
  Balance b/d 300
35,870 35,870
⚫ Example 6 : Find income receive to be recorded in
income statement
Commission received accrued as at
31/12/2018 2,000
Commission received accrued as at 31/12/2019 200
Advanced commision received at 31/12/2018 1,300
Advanced commision received at 31/12/2019 400
Commission received during the year 12800

Commission reeived A/c

Balance b/d 2,000 Balance b/d 1,300
Balance c/d 400  
Income statement 11,900 Bank 12,800
   
  Balance c/d 200
14,300 14,300
⚫ Example 7 : Depreciation charged in income statement

Vehicle at 31/12/2018 76,000

Vehicle at 31/12/2019 124000
Purchase vehicle during the year 65,000

Vehicle A/c
Balance b/d 76,000 Depreciation 17,000
Bank 65,000  
  Balance c/d 124000
141,000 141,000
⚫ Comprehensive example
⚫ The following information belongs to TUA OSMAN
Bookstore for the year ended 31 December 2019