SINGLE ENTRY AND

INCOMPLETE RECORDS
SINGLE ENTRY AND INCOMPLETE RECORDS
2

Learning Objectives
At the end of this topic, you should be able to:
i. Know and explain single entry transactions.
ii. Understand and discuss incomplete accounting entries.
iii. Determine owner’s capital.
iv. Generate revenue and purchases from incomplete records.
v. Compute profit or loss from incomplete records.
vi. Prepare complete financial statements.
 SINGLE ENTRY
3

Single entry has to do with the keeping of

complete records of an organisation but without
following the double entry system of recording
financial transactions.
In a single entry system, trial balance is not
prepared, but there are relevant records and
information that are reliable enough to generate
financial statement comprising of statement of
profit or loss and statement of financial position.
 INCOMPLETE RECORDS
4

Incomplete records arise where records available

in respect of financial transactions are not
adequate to prepare a financial statement.
Most of the time, the information available may
be for assets and liabilities at the beginning
and/or at the end of the financial year, drawings,
additional capital introduced, and other scanty
information.
COMPUTATION OF PROFIT OR LOSS
5

When questions on single entry and incomplete

records are set, two main areas (calculation of
profit and determination of capital) pose a great
challenge to students.
The format for deriving the profit is given in the
next page.
COMPUTATION OF PROFIT OR LOSS
6

N
Closing capital xxx
Less opening capital (xx)
xxx
Less additional capital introduced (xx)
xx
Add drawings during the yearxx
Profit for the year xxx
 DETERMINATION OF CAPITAL
7

Two different capitals can be determined, either

the opening capital or the closing capital.
When calculating opening capital, the opening
balance of assets and liabilities should be used,
while closing balance of assets and liabilities will
be used to generate the closing capital.
Accounting equation in simplified format,
CAPITAL = ASSETS - LIABILITIES
 DETERMINATION OF CAPITAL
8

The statement used to derive the capital is called,

statement of affairs.
The statement of affairs is just like a statement of
financial position, with the exception that
statement of affairs is used to derive the capital
at a particular period.
 Statement of affairs
9

N
Assets
Land & Building xx
Furniture xx
Motor Vehicle xx
Inventory xx
Trade receivables xx
Bank Balance xx
Cash Balance xx
xxx
Less liabilities
Trade payables xx
Loan xx
Accrual xx (xx)
Capital xxx
 Class work
10

Question 10.1
The following is the Statement of Affairs of Narrow Way Enterprises as at 1st
January, 2020.
N N
Trade payables 2,000 Plant & Equipment 3,000
Bills Payable 600 Inventory 1,000
Capital 3,000 Trade receivables 500
Bills Receivable 1,000
Cash 100
5,600 5,600

On 31st December, 2020, the following were the ledger balances: Trade payables
N1,500; Bills Payable N800; Plant & Equipment N2,500; Inventory N500; Trade
receivables N1,000; Bills Receivable N700; Cash N10. His drawings during the
period amounted to N800.
Prepare a statement to show the closing capital and net profit.
 Class work
11

Question 10.2
Question 10.5
Question 10.4