Incomplete Records (Copy)
Topic 5.6: Incomplete Records – Quiz
O Level and IGCSE Accounting
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
1. What is the main disadvantage of not keeping a complete set of accounting records?
A. Inability to calculate depreciation
B. Difficulty in calculating profit accurately
C. No need for an accountant
D. More use of control accounts
2. The purpose of a statement of affairs is to:
A. Replace a cash book
B. Find total sales
C. Determine capital
D. Calculate profit
3. Capital is found using:
A. Assets + Liabilities
B. Assets – Liabilities
C. Sales – Purchases
D. Expenses – Income
4. Profit can be calculated using:
A. Capital at start + Drawings – Additional capital
B. Capital at end – Capital at start + Drawings – Capital introduced
C. Capital at end – Capital at start + Capital introduced – Drawings
D. Capital at end – Capital introduced + Drawings
5. When preparing opening statement of affairs:
A. All liabilities are ignored
B. All assets and liabilities are included
C. Only fixed assets are shown
D. Only current assets are included
6. Mark-up is calculated on:
A. Cost price
B. Selling price
C. Expenses
D. Purchases
7. Margin is calculated on:
A. Selling price
B. Cost price
C. Profit
D. Inventory
8. Which of the following figures is used to find missing sales?
A. Inventory turnover
B. Opening receivables + Credit sales – Closing receivables
C. Opening payables + Credit purchases – Closing payables
D. Cash + Purchases
9. Incomplete records are most likely to be found in:
A. Large multinational businesses
B. Sole traders
C. Government departments
D. Non-profit organisations
10. A statement of affairs resembles:
A. A trading account
B. A ledger account
C. A balance sheet
D. An income statement
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
11. Which method helps to calculate gross profit when sales and cost of sales are missing?
A. Accrual method
B. Net present value
C. Mark-up or margin formula
D. Reducing balance method
12. Which of the following is used to calculate cost of sales from sales and gross profit?
A. Sales – Gross profit
B. Gross profit + Expenses
C. Sales + Gross profit
D. Net profit – Expenses
13. If gross profit is 25% of cost, what is the selling price of goods that cost $120?
A. $30
B. $150
C. $160
D. $145
14. A profit is indicated when:
A. Capital at end < capital at beginning
B. Drawings > capital introduced
C. Capital at end > capital at beginning
D. Total assets < liabilities
15. A trader had opening capital $5,000, drawings $500, closing capital $7,000, and introduced capital $1,000. What is the profit?
A. $1,000
B. $1,500
C. $500
D. $2,500
16. The formula for inventory turnover (times) is:
A. Average inventory / Cost of sales
B. Cost of sales / Average inventory
C. Sales / Gross profit
D. Average inventory / Gross profit
17. Which of the following is NOT required for a statement of affairs?
A. Assets
B. Liabilities
C. Capital
D. Sales
18. Which of these is NOT used in preparing a cash account from incomplete records?
A. Receipts and payments
B. Depreciation
C. Drawings
D. Capital introduced
19. From incomplete records, purchases can be found using:
A. Sales + Opening inventory – Closing inventory
B. Payments to suppliers + Closing payables – Opening payables
C. Receipts from customers + Opening receivables – Closing receivables
D. Gross profit – Expenses
20. Which of the following may cause an incomplete record situation?
A. Cash system not used
B. Accounting software used
C. Loss of records due to fire
D. Auditor’s report missing
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
21. Drawings affect the calculation of:
A. Gross profit
B. Capital only
C. Net profit
D. Net sales
22. If capital increases despite no drawings or additional capital, the business:
A. Made a loss
B. Broke even
C. Made a profit
D. Has lower liabilities
23. Which of the following is used to find closing trade payables?
A. Payments to suppliers – Opening payables + Purchases
B. Opening payables + Credit purchases – Payments to suppliers
C. Receipts from customers – Opening receivables
D. Credit purchases + Closing inventory
24. A business uses mark-up of 20%. If cost of goods sold is $10,000, what are the sales?
A. $12,000
B. $11,000
C. $10,200
D. $15,000
25. Which equation is correct for calculating capital at year end?
A. Capital at start – Drawings + Profit + Additional capital
B. Assets – Liabilities
C. Cash + Inventory + Receivables
D. Profit – Drawings
26. One key limitation of incomplete records is:
A. Over-dependence on software
B. Cannot identify theft or fraud
C. Too many accounts
D. Excessive disclosure
27. Which account is NOT recreated from incomplete records?
A. Cash account
B. Sales ledger control
C. Purchases account
D. Profit and loss appropriation account
28. Which item would not affect the change in capital?
A. Drawings
B. Capital introduced
C. Purchase of inventory
D. Net profit
29. A full income statement can be prepared from incomplete records if:
A. Receipts and payments are known
B. Only inventory is known
C. Gross profit ratio is given
D. Fixed assets are unknown
30. Statement of affairs is most similar in format to:
A. Trading account
B. Statement of financial position
C. Receipts and payments account
D. Manufacturing account
Answer key and explanations
Topic 5.6 – Incomplete Records
O Level and IGCSE Accounting
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
1. Correct Answer: B
Explanation: Without complete records, profit cannot be determined accurately, making it harder to monitor performance or make decisions.
2. Correct Answer: C
Explanation: A statement of affairs shows total assets and liabilities to calculate capital.
3. Correct Answer: B
Explanation: Capital = Assets – Liabilities.
4. Correct Answer: C
Explanation: Profit = Closing capital – Opening capital + Drawings – Capital introduced.
5. Correct Answer: B
Explanation: All assets and liabilities are recorded to determine accurate opening capital.
6. Correct Answer: A
Explanation: Mark-up is the percentage of cost added to determine selling price.
7. Correct Answer: A
Explanation: Margin is the percentage of selling price that is profit.
8. Correct Answer: B
Explanation: Opening receivables + Credit sales – Closing receivables = Receipts from customers; used to find missing sales if other figures are known.
9. Correct Answer: B
Explanation: Sole traders often do not keep full accounting records due to limited resources.
10. Correct Answer: C
Explanation: A statement of affairs is structurally similar to a statement of financial position (balance sheet).
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
11. Correct Answer: C
Explanation: Mark-up and margin formulas allow estimation of gross profit when other details are unavailable.
12. Correct Answer: A
Explanation: Cost of sales = Sales – Gross profit.
13. Correct Answer: B
Explanation: If gross profit is 25% of cost, then selling price = 120 + (25% of 120) = 150.
14. Correct Answer: C
Explanation: Increase in capital (assuming drawings and capital introduced are accounted for) implies profit.
15. Correct Answer: B
Explanation: Profit = 7,000 – 5,000 + 500 – 1,000 = 1,500.
16. Correct Answer: B
Explanation: Inventory turnover = Cost of sales / Average inventory.
17. Correct Answer: D
Explanation: Sales are not included in a statement of affairs; it shows assets, liabilities, and capital.
18. Correct Answer: B
Explanation: Depreciation is a non-cash item and not used when preparing cash accounts.
19. Correct Answer: B
Explanation: Purchases = Payments to suppliers + Closing payables – Opening payables.
20. Correct Answer: C
Explanation: A fire or similar event that damages physical or digital records may cause incomplete records.
21. Correct Answer: B
Explanation: Drawings reduce capital; they don’t directly impact gross profit.
22. Correct Answer: C
Explanation: An increase in capital with no other changes implies a profit.
23. Correct Answer: B
Explanation: Closing payables = Opening payables + Credit purchases – Payments to suppliers.
24. Correct Answer: A
Explanation: Sales = Cost + 20% = 10,000 + 2,000 = 12,000.
25. Correct Answer: A
Explanation: Closing capital = Opening capital – Drawings + Profit + Capital introduced.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
26. Correct Answer: B
Explanation: Incomplete records make it hard to detect errors, fraud, or misstatements due to lack of controls.
27. Correct Answer: D
Explanation: The profit and loss appropriation account is specific to partnerships, not sole traders.
28. Correct Answer: C
Explanation: Buying inventory does not change capital—it swaps one asset (cash) for another (inventory).
29. Correct Answer: C
Explanation: If gross profit % is given, you can back-calculate sales, cost of sales, and even net profit.
30. Correct Answer: B
Explanation: A statement of affairs lists assets and liabilities and is therefore similar to a statement of financial position.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course