Incomplete records, statement of affairs, mark-up, margin, missing purchases/sales, cash and bank summaries

1. At the start of the year, a trader’s assets were $52 000 and liabilities were $16 000. At the end of the year, assets were $71 000 and liabilities were $25 000. During the year, the owner introduced $6000 capital and withdrew $9000 cash. What was the profit for the year?

A $7000
B $10 000
C $13 000
D $19 000

2. A statement of affairs showed the following: premises $80 000, inventory $14 500, trade receivables $11 200, bank $1800, cash $500, trade payables $17 000, accrued rent $900 and bank loan $25 000. What was capital?

A $65 100
B $65 600
C $90 100
D $107 100

3. Opening trade receivables were $18 000. Closing trade receivables were $23 500. Cash received from credit customers was $76 000. Sales returns were $3200, discounts allowed were $1400 and irrecoverable debts written off were $900. What were credit sales?

A $75 000
B $81 000
C $87 000
D $90 000

4. Opening trade payables were $21 000. Closing trade payables were $18 500. Payments to suppliers were $64 000. Purchases returns were $2700 and discounts received were $800. What were credit purchases?

A $57 000
B $60 000
C $63 000
D $70 000

5. A trader sells goods at a mark-up of 25% on cost. Net sales were $150 000. Opening inventory was $22 000 and closing inventory was $18 000. What were net purchases?

A $96 000
B $112 000
C $116 000
D $124 000

6. A trader earns a gross profit margin of 25%. Net sales were $120 000. Opening inventory was $16 000 and closing inventory was $20 000. What were net purchases?

A $86 000
B $90 000
C $94 000
D $104 000

7. Opening capital was $48 000 and closing capital was $62 000. The owner introduced $7000 capital and withdrew cash of $10 000. Goods costing $3000 were also taken for private use but not recorded. What was the profit for the year after correcting drawings?

A $14 000
B $17 000
C $20 000
D $27 000

8. Opening capital was $39 000. Closing capital was $55 000. During the year, additional capital was $8000 and drawings were $11 000. What was profit?

A $13 000
B $16 000
C $19 000
D $35 000

9. A bank summary showed opening bank balance $4200 debit, receipts $36 800 and payments $39 600. What was the closing bank balance?

A $1400 debit
B $1400 credit
C $2800 debit
D $2800 credit

10. Cash in hand at the start was $250. During the year cash sales were $7800, cash received from receivables was $4200, cash paid into bank was $9300, cash expenses were $1400 and cash drawings were $900. What was cash in hand at the end?

A $650
B $900
C $1150
D $1250

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

11. A trader had opening inventory $12 000 and closing inventory $15 000. Credit purchases were $62 000, cash purchases were $8000, purchases returns were $3000 and carriage inwards was $1000. Goods costing $2000 were taken by the owner but not recorded. What was the cost of sales after correction?

A $61 000
B $63 000
C $65 000
D $67 000

12. Sales were made at a margin of 20%. Cost of sales was $72 000. What were net sales?

A $86 400
B $90 000
C $96 000
D $108 000

13. Sales were made at a mark-up of 20%. Cost of sales was $72 000. What were net sales?

A $57 600
B $86 400
C $90 000
D $96 000

14. Net sales were $96 000 and gross profit was 25% of cost. What was cost of sales?

A $72 000
B $76 800
C $80 000
D $120 000

15. Net sales were $96 000 and gross profit was 25% of sales. What was cost of sales?

A $72 000
B $76 800
C $80 000
D $120 000

16. In incomplete records, why is a statement of affairs prepared?

A To calculate gross profit from sales
B To calculate capital from assets and liabilities
C To replace the cash book permanently
D To record all credit purchases

17. A trader’s opening capital was $33 000. Closing assets were $82 000 and closing liabilities were $29 000. During the year, the owner introduced $5000 and withdrew $7000. What was profit?

A $12 000
B $17 000
C $22 000
D $32 000

18. Opening assets were $70 000 and opening liabilities were $28 000. Closing assets were $95 000 and closing liabilities were $31 000. Drawings were $9000 and additional capital was $4000. What was profit?

A $9 000
B $18 000
C $27 000
D $35 000

19. A trader keeps no proper sales account. Opening trade receivables were $9000. Closing trade receivables were $12 500. Cash received from customers was $51 000. Bad debts written off were $500 and discounts allowed were $1000. There were no sales returns. What were credit sales?

A $49 000
B $52 000
C $56 000
D $65 000

20. Opening trade payables were $14 000. Closing trade payables were $18 000. Cash paid to suppliers was $47 000. Purchases returns were $2000 and discounts received were $1000. What were credit purchases?

A $44 000
B $48 000
C $54 000
D $68 000

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

21. A trader had net sales of $200 000. Goods were sold at a mark-up of 331/3% on cost. Opening inventory was $26 000 and purchases were $146 000. What was closing inventory?

A $22 000
B $26 000
C $31 000
D $36 000

22. A trader had net sales of $200 000. Gross profit margin was 331/3%. Opening inventory was $26 000 and purchases were $146 000. What was closing inventory?

A $22 000
B $26 000
C $38 667
D $66 667

23. A trader’s records show cash received from customers $84 000. Opening trade receivables were $16 000 and closing trade receivables were $19 000. During the year, sales returns were $5000 and discounts allowed were $2000. What were credit sales?

A $84 000
B $88 000
C $94 000
D $110 000

24. A trader’s bank account showed payments to suppliers of $71 000. Opening trade payables were $26 000 and closing trade payables were $20 000. Purchases returns were $3000 and discounts received were $2000. What were credit purchases?

A $60 000
B $66 000
C $70 000
D $82 000

25. Cash sales were banked immediately. The bank summary showed total bank receipts $93 000. Receipts from credit customers were $65 000. The owner introduced capital by cheque $6000, and a bank loan of $10 000 was received. What were cash sales?

A $12 000
B $18 000
C $22 000
D $28 000

26. Bank payments were $78 000. Payments to credit suppliers were $55 000, wages were $9000, rent was $7000 and insurance was $2500. The owner’s drawings by cheque were the remaining amount. What were bank drawings?

A $3500
B $4500
C $9500
D $23 000

27. In an incomplete records question, a trader’s drawings consist of: cash drawings $4800, goods taken for private use $1300, and private electricity bill paid from business bank $900. What total drawings should be deducted from capital?

A $4800
B $6100
C $5700
D $7000

28. Opening capital was $75 000. Closing capital before adjusting for goods drawings was $84 000. Profit before adjusting goods drawings was $18 000. Cash drawings were $7000. Goods drawings costing $2000 had been included in purchases and not recorded. What was corrected closing capital?

A $82 000
B $84 000
C $86 000
D $88 000

29. A trader’s profit was calculated using closing capital, but an accrued expense of $600 at the year-end was omitted from the closing statement of affairs. What was the effect on calculated profit?

A Profit overstated by $600
B Profit understated by $600
C Profit overstated by $1200
D No effect

30. A prepaid expense of $400 at the year-end was omitted from the closing statement of affairs. What was the effect on calculated profit?

A Profit overstated by $400
B Profit understated by $400
C Profit overstated by $800
D No effect

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

31. Closing inventory was omitted from the closing statement of affairs. What was the effect on capital and profit?

A Closing capital understated and profit understated
B Closing capital overstated and profit overstated
C Closing capital understated and profit overstated
D Closing capital overstated and profit understated

32. Opening inventory was omitted from the opening statement of affairs. What was the effect on profit calculated by comparing capital?

A Profit overstated
B Profit understated
C No effect on profit
D Profit understated only if closing inventory is also omitted

33. A statement of affairs at the start of the year omitted a trade payable of $1000. What was the effect on profit calculated by comparing capital?

A Profit overstated by $1000
B Profit understated by $1000
C No effect on profit
D Profit overstated by $2000

34. A statement of affairs at the end of the year omitted a trade payable of $1000. What was the effect on profit calculated by comparing capital?

A Profit overstated by $1000
B Profit understated by $1000
C No effect on profit
D Profit understated by $2000

35. A statement of affairs at the start of the year omitted a trade receivable of $800. What was the effect on profit calculated by comparing capital?

A Profit overstated by $800
B Profit understated by $800
C No effect on profit
D Profit understated by $1600

36. A statement of affairs at the end of the year omitted a trade receivable of $800. What was the effect on profit calculated by comparing capital?

A Profit overstated by $800
B Profit understated by $800
C No effect on profit
D Profit overstated by $1600

37. A business had opening capital $46 000 and closing capital $58 000. Additional capital was $5000. Drawings were $8000. Goods drawings of $1200 had been omitted from drawings but had already been deducted from purchases. What was profit?

A $13 800
B $15 000
C $16 200
D $20 000

38. Opening capital $70 000. Closing capital $95 000. Profit was $30 000. Additional capital was $8000. What were drawings?

A $5000
B $13 000
C $17 000
D $63 000

39. Opening capital $44 000. Closing capital $52 000. Loss for the year $6000. Drawings $9000. What was additional capital introduced?

A $11 000
B $17 000
C $23 000
D $29 000

40. Opening capital $60 000. Additional capital $7000. Drawings $15 000. Loss $8000. What was closing capital?

A $44 000
B $52 000
C $60 000
D $90 000

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

41. A business has incomplete records. Opening capital was $35 000 and closing capital was $50 000. During the year, the owner introduced a motor vehicle valued at $6000 and withdrew cash $5000. The owner also paid business rent $1200 from private funds. What was profit?

A $12 800
B $13 800
C $15 200
D $21 200

42. Opening inventory $20 000, closing inventory $18 000, net purchases $92 000. The trader applies a mark-up of 40% on cost. What were net sales?

A $126 000
B $129 200
C $131 600
D $154 000

43. Opening inventory $15 000, closing inventory $17 000, net sales $144 000. Gross profit margin is 25%. What were net purchases?

A $91 000
B $93 000
C $106 000
D $110 000

44. Opening inventory $11 000, closing inventory $13 000, net purchases $52 000. Gross profit is 20% of sales. What were net sales?

A $62 500
B $65 000
C $75 000
D $80 000

45. A trader makes a mark-up of 50% on cost. Sales were $180 000 and sales returns were $6000. Opening inventory was $21 000 and purchases were $119 000. What was closing inventory?

A $14 000
B $21 000
C $24 000
D $45 000

46. A trader makes a margin of 50%. Sales were $180 000 and sales returns were $6000. Opening inventory was $21 000 and purchases were $119 000. What was closing inventory?

A $14 000
B $21 000
C $53 000
D $87 000

47. A cash summary showed opening cash $300, cash sales $12 000, cash received from receivables $8000, cash paid to suppliers $2500, cash expenses $3600, cash banked $12 400 and cash drawings $1500. What was closing cash?

A $300
B $600
C $800
D $1200

48. A bank summary showed opening overdraft $2500, banked cash $18 000, cheque receipts from customers $44 000, loan received $10 000, supplier payments $39 000, expenses $16 000, drawings $8000 and purchase of equipment $6000. What was the closing bank balance?

A $500 debit
B $500 credit
C $7500 debit
D $7500 credit

49. A trader has incomplete records. Opening capital was $58 000. Closing capital was $77 000. During the year the owner introduced $9000 and withdrew $12 000. A business expense of $1500 was paid privately by the owner and not recorded. What was corrected profit?

A $20 500
B $22 000
C $23 500
D $25 000

50. Which statement about incomplete records is correct?

A Profit can only be calculated if every ledger account is available.
B Opening and closing capital can be used to calculate profit if drawings and capital introduced are known.
C Mark-up means gross profit as a percentage of sales.
D Margin means gross profit as a percentage of cost.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

1. C
   Opening capital = 52 000 − 16 000 = 36 000
   Closing capital = 71 000 − 25 000 = 46 000
   Profit = 46 000 − 36 000 − 6000 + 9000 = $13 000

2. A
   Assets = 80 000 + 14 500 + 11 200 + 1800 + 500 = 108 000
   Liabilities = 17 000 + 900 + 25 000 = 42 900
   Capital = 108 000 − 42 900 = $65 100

3. C
   Credit sales = closing receivables − opening receivables + cash received + returns + discounts + bad debts
   = 23 500 − 18 000 + 76 000 + 3200 + 1400 + 900
   = $87 000

4. No correct option
   Credit purchases = closing payables − opening payables + payments + returns + discounts
   = 18 500 − 21 000 + 64 000 + 2700 + 800
   = $65 000
   The options do not include $65 000.

5. C
   Mark-up 25% means sales = 125% of cost.
   Cost of sales = 150 000 / 1.25 = 120 000
   120 000 = 22 000 + purchases − 18 000
   Purchases = $116 000

6. C
   Gross profit margin 25% means cost of sales = 75% of sales.
   Cost of sales = 75% × 120 000 = 90 000
   90 000 = 16 000 + purchases − 20 000
   Purchases = $94 000

7. C
   Correct drawings = 10 000 + 3000 = 13 000
   Profit = 62 000 − 48 000 − 7000 + 13 000
   = $20 000

8. C
   Profit = closing capital − opening capital − additional capital + drawings
   = 55 000 − 39 000 − 8000 + 11 000
   = $19 000

9. A
   Closing bank = 4200 + 36 800 − 39 600
   = $1400 debit

10. A
    Closing cash = 250 + 7800 + 4200 − 9300 − 1400 − 900
    = $650

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

11. B
    Cost of sales = opening inventory + credit purchases + cash purchases − purchases returns + carriage inwards − goods drawings − closing inventory
    = 12 000 + 62 000 + 8000 − 3000 + 1000 − 2000 − 15 000
    = $63 000

12. B
    Margin 20% means cost of sales = 80% of sales.
    Sales = 72 000 / 0.80 = $90 000

13. B
    Mark-up 20% means sales = cost × 120%.
    Sales = 72 000 × 1.20 = $86 400

14. B
    Gross profit is 25% of cost, so sales = 125% of cost.
    Cost of sales = 96 000 / 1.25 = $76 800

15. A
    Gross profit is 25% of sales, so cost of sales = 75% of sales.
    Cost of sales = 96 000 × 75% = $72 000

16. B
    A statement of affairs calculates capital by listing assets and liabilities.

17. C
    Closing capital = 82 000 − 29 000 = 53 000
    Profit = 53 000 − 33 000 − 5000 + 7000
    = $22 000

18. C
    Opening capital = 70 000 − 28 000 = 42 000
    Closing capital = 95 000 − 31 000 = 64 000
    Profit = 64 000 − 42 000 − 4000 + 9000
    = $27 000

19. C
    Credit sales = 12 500 − 9000 + 51 000 + 500 + 1000
    = $56 000

20. C
    Credit purchases = 18 000 − 14 000 + 47 000 + 2000 + 1000
    = $54 000

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

21. A
    Mark-up 33 1/3% means sales = 4/3 of cost.
    Cost of sales = 200 000 × 3/4 = 150 000
    Closing inventory = 26 000 + 146 000 − 150 000
    = $22 000

22. C
    Margin 33 1/3% means cost of sales = 66 2/3% of sales.
    Cost of sales = 200 000 × 2/3 = 133 333
    Closing inventory = 26 000 + 146 000 − 133 333
    = $38 667

23. C
    Credit sales = 19 000 − 16 000 + 84 000 + 5000 + 2000
    = $94 000

24. C
    Credit purchases = 20 000 − 26 000 + 71 000 + 3000 + 2000
    = $70 000

25. A
    Cash sales = total bank receipts − customer receipts − capital introduced − loan
    = 93 000 − 65 000 − 6000 − 10 000
    = $12 000

26. B
    Drawings = 78 000 − 55 000 − 9000 − 7000 − 2500
    = $4500

27. D
    Total drawings = cash drawings + goods drawings + private bill paid by business
    = 4800 + 1300 + 900
    = $7000

28. B
    Goods drawings increase profit by $2000 and increase drawings by $2000, so closing capital is unchanged.
    Corrected closing capital = $84 000.
    There is a slight internal inconsistency if opening capital, profit and drawings are reconciled, but the specific adjustment leaves closing capital unchanged.

29. A
    Accrued expense omitted means liabilities are understated and closing capital is overstated. Profit calculated from capital is overstated by $600.

30. B
    Prepaid expense omitted means assets and closing capital are understated. Profit is understated by $400.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

31. A
    Closing inventory omitted means assets and closing capital are understated, so profit is understated.

32. A
    Opening inventory omitted from the opening statement of affairs understates opening capital. A lower opening capital makes profit appear overstated.

33. B
    Opening trade payable omitted overstates opening capital. A higher opening capital makes profit understated.

34. A
    Closing trade payable omitted overstates closing capital. Profit is therefore overstated.

35. A
    Opening trade receivable omitted understates opening capital. Profit is overstated.

36. B
    Closing trade receivable omitted understates closing capital. Profit is understated.

37. C
    Goods drawings were already deducted from purchases, so profit is not changed again, but drawings must include them.
    Profit = 58 000 − 46 000 − 5000 + 8000 + 1200
    = $16 200

38. B
    95 000 = 70 000 + 30 000 + 8000 − drawings
    Drawings = $13 000

39. C
    52 000 = 44 000 + additional capital − 9000 − 6000
    Additional capital = $23 000

40. A
    Closing capital = 60 000 + 7000 − 15 000 − 8000
    = $44 000

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

41. A
    Private rent paid is treated as capital introduced and also as an expense.
    Profit = 50 000 − 35 000 − 6000 − 1200 + 5000
    = $12 800

42. C
    Cost of sales = 20 000 + 92 000 − 18 000 = 94 000
    Mark-up 40% means sales = 94 000 × 1.40
    = $131 600

43. D
    Gross profit margin 25% means cost of sales = 75% of sales.
    Cost of sales = 144 000 × 75% = 108 000
    Net purchases = 108 000 − 15 000 + 17 000
    = $110 000

44. A
    Cost of sales = 11 000 + 52 000 − 13 000 = 50 000
    Gross profit is 20% of sales, so cost is 80% of sales.
    Sales = 50 000 / 0.80 = $62 500

45. C
    Net sales = 180 000 − 6000 = 174 000
    Mark-up 50% means sales = 150% of cost.
    Cost of sales = 174 000 / 1.5 = 116 000
    Closing inventory = 21 000 + 119 000 − 116 000
    = $24 000

46. C
    Margin 50% means gross profit is half of sales, so cost is also half of sales.
    Cost of sales = 174 000 × 50% = 87 000
    Closing inventory = 21 000 + 119 000 − 87 000
    = $53 000

47. A
    Closing cash = 300 + 12 000 + 8000 − 2500 − 3600 − 12 400 − 1500
    = $300

48. A
    Closing bank = opening overdraft + receipts − payments
    = −2500 + 18 000 + 44 000 + 10 000 − 39 000 − 16 000 − 8000 − 6000
    = $500 debit

49. A
    Unrecorded private payment of business expense increases capital introduced but also increases expenses.
    Profit before correction = 77 000 − 58 000 − 9000 + 12 000 = 22 000
    Corrected profit = 22 000 − 1500
    = $20 500

50. B
    Profit can be calculated from opening and closing capital if drawings and additional capital are known. Mark-up is gross profit as a percentage of cost; margin is gross profit as a percentage of sales.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.